The Complete Guide to Generation Alpha, The Children of Millennials
Chevy Corvette, Downy fabric softener, Life cereal… what brand these days hasn’t identified- and blamed- millennials as the demographic causing the decline of their annual sales? Companies have been hearing for years now that resonating with the millennial generation is vital for strategic growth: they are comprised of more than 83 million consumers, have $200 billion in annual buying power and will spend $10 trillion over their lifetimes… all in the U.S. alone. As the largest generation in the workforce they simultaneously command influence over entire industries (auto, health, food and beverage) and other demographics (generation X and baby boomers) alike.
Still, though so many analysts have quantified the importance of the millennial generation, few have examined the effect of their diverse offspring, generation Alpha. Born since the year 2010 (and until the year 2025), generation Alpha are the children of millennials. This new generation hasn’t even established credit, and yet they’re impacting the spending behaviors of their millennial parents (who also happen to be entering their prime spending years).
More than 22 million millennial parents live in the U.S., with about 9,000 generation Alpha babies born to them each day. According to social researcher Mark McCrindle, 2.5 million members of Generation Alpha are born every week around the world. Research Director Dan Schawbel at Future Workplace cites that as of July 2014 there were nearly 21 million children under the age of four years old in the U.S. alone. The eldest members of this generation started kindergarten this year but in 2050 (when they turn 40) the Generation Alpha population is predicted to reach 35 million. When all the members of this generation have been born, they will number almost two billion.
Obviously, children have influenced their parent’s spending behaviors for decades. It has been reported children under 12 and teens influence parental purchases totaling between $130 to 670 billion a year. However it appears that never before has there been such a passionate, intense and borderline obsessive relationship between two generations as the one between millennials and generation Alpha.
As children, only about six-in-ten millennials were raised by both parents, so naturally as parents millennials place parenthood and marriage far above career and financial success. They place high value on good parenting and are somewhat more likely than other generations to say being a parent is extremely important to their identity. Fully six-in-ten parents whose oldest (or only) child is a member of generation Alpha say being a parent is rewarding all of the time. And only four-in-ten millennials can admit they consider themselves a parent who sometimes praises their generation Alpha child too much.
For many millennials, their generation Alpha offspring will be their only gift to our world. Literally. One-child families have gained ground; today 18% of women at the end of their childbearing years have an only child, up from 10% in 1976. Coincidentally because they’re more likely to be only children, members of Generation Alpha have a greater chance of growing up selfish and expecting instant gratification. This should sound familiar, as millennials are often categorized as having the same characteristics.
Typically, the brands blaming millennials for causing the decline of their annual sales are those who historically don’t divert from traditional (outdated) strategies. 84% of millennials tune out traditional strategies. Yet as engaged parents, they do pay close attention to their children. There are organizations leveraging that passionate, intense and borderline obsessive relationship, and using it to their advantage. Since 21010 investors have plunged over $2 billion into startups addressing the US K-12 edtech market, and fast-food industry aside between $11 and $13 billion annually is spent by companies advertising to children in America. Plus when they do shop these children aren’t just buying toys for themselves; generation Alpha is spending around $18 billion a year of their (“earned”) money on purchases for themselves, siblings, parents, friends and other family members.
And remember, the oldest member of the generation is only five years old.
A few companies are leading the way with best in class examples of marketing to this new generation, subsequently appealing to their millennial parents. For them, winning with millennials is an innovative if-then statement:
If generation Alpha possesses similar behaviors, attitudes and beliefs to that of their parents, then to win with a certain segment of millennial consumers (millennial parents), we must target generation Alpha.
Google understands the latest generations (generation Z, generation Alpha) prefer communication via images and voice control over typing and texting. In their TV commercial for Google Home, Google featured a diverse millennial father and generation Alpha daughter reading about a blue whale. While the father read the story his daughter interrupts with questions- he then turns to Google Home for the answers.
Snapchat is widely popular among the latest generations; 28% of Americans under 18 years old are Snapchat users, nearly double the amount of those ages 25-34 (15%). Younger generations are more open to augmented reality, which is why the app briefly offered Snapkidz (Snapchat minus the ability to add friends or share messages) and now features geofilters at Disney Parks. As a result, usage among the parents of generation Alpha increases every year.
A survey commissioned by the Mars brand led to the insight: young children enjoy cooking. Similarly, 96% of parents in the U.S. feel it is important their children know how to cook or bake but only 33% cook with their children weekly. As a result, Mars launched the Ben’s Beginners program under their Uncle Ben’s brand, which included TV spots, family cooking contests and even millennial celebrity mom appearances to inspire parents to cook with their children.
Members of generation Alpha are the one element in their parents’ stressed-out, multi-tasking lives that captivate their attention, so their recommendations and requests are also trusted. Not only is generation Alpha more likely to grow up overindulged, but they are also the most materially endowed and technologically literate generation to date. Case in point: according to Amazon.com, four days before Christmas the “most wished for” tablet accessory most often added to all wish lists and registries was the BUDDIBOX iPad Case, a kid-safe product marketed to generation Alpha. And one startup has produced an app which consistently ranks as one of the most downloaded and highest grossing apps since 2015- ABCmouse. Age of Learning (ABCmouse's parent company) is now valued at $1 billion; over one million families subscribe to their educational platform exclusively targeting generation Alpha.
They are social influencers (like Instagram’s three-year-old fashionista Laerta) and have even turned older members of generation Z into social influencers. For example, though their audience is comprised of mostly children, seven- and 10-year-old YouTube baking experts Charli and Ashlee (respectively) of Charli’s Crafty Kitchen garner an average of 29 million views each month and generate an average of $127,777 in ad revenue per month. This is not surprising, because even at just five years old generation Alpha is inundated with digital ads. 81% of parents with children this age say they watch videos or play games on an electronic device on a daily basis.
Simply put, remember:
Just because you don’t sell toys, doesn’t mean you should count these kids out.