How has Gift-Giving Evolved? - Baby Boomers, Millennials, VS the Gen Z's
P eople do not share the same ideas, habits, or rituals for gift-giving. The way in which people engage in gift-giving changes from person to person, and it depends on various factors such as culture, socioeconomic situation, gender, ethnicity, and generation. Among these factors, how individuals from different generation groups approach the area of gift-giving has become a matter of interest for both researchers and businesses. For example, your grandparents might be more familiar with buying gifts in the physical stores than your siblings, who may prefer to buy online. Thanks to the internet and globalization, the world has changed, and with it, the ways in which people think about gifts have changed too. Considering that research on gift-giving is relatively new, it is fair to say that we know much more about it now than a few years back. Thanks to websites like GiftAFeeling, where people from all backgrounds and age groups can get a clearer understanding of the psychology that lies behind gift-giving quite easily. In the last few years, e-commerce has become part and parcel of life. Almost everyone today may have a computer or at least a smartphone and could quickly search for a website they like and order anything they want from the comfort of their homes. Of course, it was not always like this, but it stands true in most cases. Thus, shopping habits for finding and giving gifts might differ significantly from generation to generation, and they will probably change in the upcoming years. Now let's look at how gift-giving differs within the most recent generations, starting with a small introduction on what a generation is and how they differ from each other.
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Baby Boomers. Generation X, Millennials, and Generation Z
What is a generation?
A generation is an identifiable group of people who share birth years, ages, and critical life events at critical junctures (Corsten, 1999; Kupperschmidt, 2000). There is a sense of sameness, social identity, and reciprocal existence within each group; it was observed that the music, media, defining moments, and cultural norms of the times in which people grow up become closely connected (Lovely, 2012). New generations are supposed to arise every 18 to 24 years. However, some researchers disagree on the idea that there are limits to determining where one generation begins and the other finishes. The most recent generations age gaps are as follows:
1. Baby Boomers
People born between 1946 and 1964 (71.6 million in the U.S.) currently between the ages of 57 and 75.The baby boomer generation accounts for a sizable fraction of the global population, particularly in developed countries. As of 2019, it accounts for 21.19 percent of the United States of America population. Baby boomers have had, and continue to have, a tremendous economic influence as the largest generational group in U.S. history.
2. Gen X
People born between 1965 and 1979/80 and are now between 41 and 56 (65.2 million people in the U.S.). This generation is one of the most educated in history, with a keen understanding of technology, media, skepticism, and pragmatism.
3. Gen Y
Often known as Millennials, are people who were born between 1981 and 1994/6 (72.1 million in the U.S.). They are currently between the ages of 25 and 40. Generation Y (Gen Y) is the most significant generation in American history in terms of numbers. They are a generation with more friends and a better level of closeness with their friends. This trait causes them to engage in a lot of gift-giving activities.
3. Gen Z
The newest generation consisting of people born between 1997 and 2012 is called Gen Z. They are currently between the ages of 9 and 24 (68 million in the U.S.). This is the first generation to have grown up with the internet for granted, never having lived a world without email, instant access to information, or cell phones. Let's now look at the buying habits of these generations with regard to online shopping.
Generations and Online Shopping
Online shopping is one of the most common internet activities, with around 80% of the population of the United States making purchases online (MasterCard, 2012). There are several reasons why people choose to buy their products and services online. Online shopping is easy, accessible, time-saving, and convenient. Imagine you are on your smartphone scrolling through your Instagram, and suddenly an advertisement of the perfect Christmas present for your special person pops up. You are likely, to follow the advertisement to some website if it interests you, and within a few minutes, you are ready to buy their offerings!
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People go through this process very easily, especially in this period where people are threatened by quarantining at home. However, research shows us that there are some differences in how the generations described above approach online shopping. For example, Gen Z is currently the generation that mostly enjoys shopping online. But they still are very cautious with their money compared to others. They are looking for higher-quality commodities and tend to keep up with cultural trends. Millennials, on the other side, are well-educated in many areas. Thanks to their easy access to enormous amounts of information and education. They may place a high value on technical information. They typically make purchasing decisions after conducting a prior study on the subject. Compared to their predecessors, i.e. baby boomers, this makes them more conscious of marketing strategies, and hence, more distrustful of marketing (Tsui and Hughes, 2001). Millennials are reported to make decisions more quickly and without much thinking than previous generations. Also, according to academics, Gen X's purchasing habits are highly sophisticated. Traditional search and decision-making procedures are still used by Gen X when making purchases. They might be more inclined to ignore targeted advertising and reject many segmentations or marketing methods. While shopping online, Gen X prefers to do some research - they read more reviews and go to more opinion websites than any other generation before them (Peralta, 2015). Finally, Baby Boomers continue to get influenced mainly by traditional marketing efforts and sales methods, such as telemarketing and face-to-face communication.
Differences in Gift-Giving across Generations
According to a new study from Loop Commerce, people of the millennial generation are more likely to be giving the most memorable gifts (Binns, 2019). According to the survey findings, millennials are the most considerate generation when shopping for others. Furthermore, they found out that 42% of millennials bought gifts for pleasure, compared to 26% of baby boomers and 36% of Generation X respondents. Millennials are also more concerned about delivering fitting gifts than previous generations.
More than half of millennial gift purchasers, 52%, are concerned that their gift would be disliked, compared to 38% of baby boomers and 46% of Gen X respondents (Binns, 2019). From the data presented above, we can say that Baby Boomers and Gen Xers tend to be much more motivated by obligation when it comes to gift-giving than millennials. This sense of obligation can negatively influence the motivation behind gift-giving, damaging the receiver's experience. On the other hand, millennials get positively influenced by their desires to make the receiver happy. Therefore, they will invest more time and resources in the process of finding and giving gifts. This is why personalized gift-giving is far more common among millennials than previous generations. Personalization is the process of tailoring products or services to each individual. The giver can share aspects of themselves with the receiver while also giving them something unique that no one else has. A study conducted by IBM with the participation of the National Retail Federation (Cullen, 2019), discovered that personalization is also vital in the gift-giving process of Gen Z. They found that 47% of Gen Z customers are interested in designing or customizing an item for a gift.
NFT and the future of Gift-Giving
We have seen how the concept of buying changes starting from Baby Boomers to Generation Z, but what about the next generation? Maybe it is still early to talk about it, but can NFT impact the future of gifting? First of all, if you don't know anything about the topic of NFTs, don't worry - I will try to make it as simple as possible for you. A Non-Fungible Token, or NFT, is a certificate of authenticity for a virtual object. The object can be everything, a piece of art, a song, or even virtual pets! The one-of-a-kind digital file is saved on a blockchain network, with any changes in ownership being validated by a global network and publicly recorded. That implies the chain of custody is permanently marked in the file, making it nearly impossible to replace it with a fake (Sam Dean, 2021). Think that in the February of 2021, the famous artist Grimes made 5.8 million dollars selling her NFTs in a couple of minutes. "WarNymph" was the title of a collection of ten digital assets created in partnership with her brother. NFT's are pretty new, and we don't know yet what their future will be. But what if buying and selling NFT's becomes a matter of everyday life for children born in the next generation? This would have an impact on gift-giving as well. Of course, the idea of gifting something that is not tangible might sound crazy to some of you. Still, perhaps this could be representing the next step of gift-giving as Gen Z seems to continue taking more interest in NFTs and digital gifts, and we just don't know yet for certainty.
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