Differences in Consumer Behaviour Between Gen X and Millennial's:

“A good fragrance is really a powerful cocktail of memories and emotion” (Jeffrerey Stepakoff, 2011).

The understanding and selection of fragrances involve complications. It is not simply choosing a fragrance for specific purposes such as party fragrance, job fragrance or casual fragrance for daily life, but also requires the desire of expressing personality or personal emotion. In this study, consumer preferences and consumers behavior toward fragrance products between two generations including Millennials and Generation X is going to be identified and discussed. Accordingly, it is possible to analyze the approached information to consumer behavior through observational learning (as known as operant learning) and examine how perfume brands developing products can transform the acquiring behaviors between Millennials and Generation X.

The fragrances market is designated by an abundant line of products including mass perfumes, prestige perfumes or niche perfumes, however this study focuses only on luxury perfume brands providing premium perfumes.

Perfume Industry Insights

Since the beginning of civilization, perfumes and fragrance have been used widely. The appearance of scent was recorded as far back as the ancient Egyptians and ancient China. Today, consumers have been realizing their demand for wearing perfume every day. According to the scientific aspect, this demand connects to the highest level of Maslow’s Hierarchy of Needs which is Self-Actualisation.

The increasing demand for perfume has been shown by the global industry’s statistics throughout recent years. Figures 1 and 2 illustrate that the global perfume market size worth roughly USD 41 billion in 2018 with a CAGR of 4% from 2014 to 2018 and is expanding at CAGR of 3.8% in the next five years, expected to be value about USD 49 billion in 2023. (Marketline, 2019)

In Euromonitor‘s Global Fragrances report, it is said that the year of 2013 witnessed the domination of premium fragrances with 55% of the total market value and the perfumes for women was the biggest proportion with 63% valued USD 15.6 billion (Euromonitor, 2014)

Although in 2013, the Western EU maintained its dominance in fragrances, Latin America will gain its top position by 2018, together with the Middle East and Africa. They will be the key drivers of growth over 2013-2018, rising to 4 percent and 7 percent CAGRs respectively. However, Latin America will remain highly oriented towards the mass segments, generating 91% of value gains over the period of time from 2013 to 2018 while 40% value rise in premium fragrances will be generated by MEA over the same timeframe. Western Europe and North America will continue to be the leading markets for luxury fragrances, achieving US$ 16.1 billion in 2018, or roughly six in ten of total sales.

Generation X and Millennials

Identifying the distinctive characteristics of Generation X and Millennials is crucial to understand comprehensively before distinguishing the process of perceiving new things of these two groups.

First, about the age range, generation X are generally those born between 1965 and the early 1979, giving them an age of between 40-54 in 2019. Whilst millennials, also known as generation Y, are the demographic cohort following generation X. They would have been born in the early 1980s as starting birth years and the mid-1990s to early 2000s as ending birth years, putting them within a 20-35 range. The identification of the age range for gen X and millennials is required in order to understand the consensus of consumer behaviours for both groups.

The second manner needs to be discussed should be spending power. In comparison with millennials, generation X are a small but mighty demographic cohort. Gen Xers are known to enter the middle age and being at the peak of their career with high earning power but still remain practical budgeters. Millennials are much more likely to spend their spare cash on unique activities and prioritise their experiences, which can be very wide ranging. The key trend here is that millennials typically expect a certain quality of life and pursue it regardless of their reduced means.

Third, turning to technological matter, people from Generation X corhort can use the internet in their daily lives for most tasks, but mainly for practical purposes only. Gen Xers still can be targeted in many ways as they are technology-savvy and use both online media and traditional platforms including email and television. They are industrious and quickly adapt to new technology. On the other hand, millennials have been instrumental in the shift online for many brands. As a demographic, they prefer to shop online on their daily basis and socially rather than conventional methods such as store browsing. Therefore, to clarify any differences, it is this and its effect on consumer behaviour that should be further examined.

On top of that, Generation X have a high degree of brand loyalty as they lean towards repetitive buying behaviours. They can be quite faithful and cautious to their favourite brands if they feel they are genuine and trustworthy. This is not the case for millenials, they are known as brand switchers, millennials perform greater behaviours of brand switching. Such characteristics can be used in the study of consumer behaviour in the luxury perfume industry and the observational learning theory in generation X and millennials.

The theory that has been chosen to examine further consumer behavior in luxury perfume is observational learning.

Observational learning describes the process of learning through watching the outcome of other’s behaviour, retaining the information, and then later replicating the behaviours that were observed. The process of imitation is also referred to as modelling as a great deal of learning happens indirectly. Depending on the positive/negative reinforcement, an observer’s behavior can be affected into future behavioural actions in terms of whether one may engage within a particular activity. In general, the more similarity between the model and learner, the more likely for people to follow the examples. According to Bandura, in order for observational learning to happen, there are four key processes: attention, retention, production and motivation.

How Generation X and Millennials Learn

Within luxury perfume industry, marketing is very important as the transmission of a fragrances’ smell is not always feasible. Therefore, many companies decide to put a lot of efforts on marketing strategies including the use of high-profile celebrities in advertising campaigns to dominate the market (Marketline, 2013). Looking to the Dior's campaign, JOY by Dior – The new fragrance, they have successfully created favorable thoughts to appeal millennials’ market by utilizing influencer. They use the principles of observational learning in order to make their customers notice their products through YouTube, a social platform. It is very important to target millennials as they are mostly social shopper. The choice of Jennifer Lawrence as the face of Joy by Dior to promote the product helps introduce mainly millennials, who are well familiar and have intimate connections with the celebrity. Just looking at the comments section on Dior’s official account, it can be clearly seen the advertisement has somehow motivated their audience to purchase the perfume and the desirable to emulate just because of peer-to-peer influencing and attractiveness that Jennifer Lawrence has portrayed regardless not knowing the scent or the price of the product.

With regard to technological habits, millennials are more likely to pay attention to social media influencers more frequently than Generation X, who are more hesitant to explore beyond more established social media platforms and not so influenced by influencers (Mintel, 2019), which can be demonstrated in the section above. Millennials are more likely to watch YouTube videos for searching shopping purpose rather than traditional platforms of marketing which is more common with Generation X. According to Mintel Reports, 48% gen X who access YouTube is far off the 76% of younger millennials and 68% of older millennials who also access this site regularly (Mintel, 2019). This figure can therefore lead to millennials observing and imitating influencers, enticing them to buy the fragrances. On the other hand, it would not have had the effective expected outcome when applying to gen X and possibly lead to them not completely processing the message.

Turning to the Calvin Klein advertisement posters, they have created visually engaging images on the luxury perfume posters. Calvin Klein has gone different approach to Dior, the effect it has for mass marketing means that more people will observe, relate and understand the advert, suggesting that it is for everyone. As advertisements do not emit fragrance and luxury perfume cannot be sold itself by a text that breaks down the notes and the construction of a formula, it has tried to trigger the need of customer through observation. The ad shows the dominance, masculinity and bold attitude of men, as well as social norm that women should submit to a man. It gives out the direct gaze to audience, creates intimacy and relationship between the reader, making the reader feels involved and provoke the desire inside them. This intentional advertisement is to encourage modern, career-oriented men to buy the fragrance if they want to feel confident and masculine.  Calvin Klein also offer the same advert to target female with sensuality, contrary to male's one but with the similar messages.

This kind of message is suitable to approach gen X as they are familiar through mass marketing advertising such as TV ads, advertorials in magazines and in-store promotional campaigns, who are not regularly use social platform. They experience lower familiarity with the internet means that they consequently have less experience within this industry. Additionally, it shows gen Xers are largely resistant to mass market advertising as they are less knowledgeable, and it causes them to seek out what they know and rely on credibility and brand reputation.

Conclusion

To sum up, by understanding the differences in characteristics between Gen X and Millennials, the consumer behaviours of people in these two group are somehow predictable. When interpreting their behavior by applying Observational Leaning Theory, it is clear that their established characteristics are exposed obviously.