Understanding Generation Y and Their Use of Social Media: A Review and Research Agenda

Ruth N. Bolton, Arizona State University
Parasuraman, University of Miami
Ankie Hoefnagels, Radboud University
Sertan Kabadayi, Fordham University
Thorsten Gruber, University of Manchester
Yuliya Komarova Loureiro, Fordham University
Nanne Migchels, Radboud University
David Solnet, University of Queensland

Generation Y or the Millennial Generation exerts a peculiar fascination on both managers and academics. In what has become common parlance, members of Generation Y are called Digital Natives, rather than Digital Immigrants (Prensky, 2001). They are the first generation to have spent their entire lives in the digital environment; information technology profoundly affects how they live and work (S. Bennett, Maton et al., 2008; Wesner & Miller, 2008). Generation Y actively contributes, shares, searches for and consumes content – plus works and plays – on social media platforms. Service managers and researchers are especially interested in Generation Y’s social media usage because it may be a harbinger of how people will behave in the future.

The purpose of this paper is to review what we know – and don’t know – about Generation Y’s use of social media and to assess the implications for individuals, firms and society. Service organizations, managers, researchers and public policy makers are interested in Generation Y’s use of social media because it affects people’s behavior in many domains – with positive and negative outcomes for customers, firms and their employees, and society. Generation Y’s social media use affects consumers’ identity formation, their expectations regarding service, formation of habits, their engagement with brands and firms, participation in value co-creation, brand loyalty, purchase behavior, lifetime value and (ultimately) the value of the firm. It thereby influences organizational decisions about service customization and productivity, such as how resources are allocated between labor and automation. It also profoundly influences the design and implementation of interactive services – including location-based, retail and self-service technology (Berry, Bolton et al., 2010) – as well as customer relationship management practices. Moreover, Generation Y’s use of social media has important ramifications for how firms hire and manage employees. Last, social norms and behavior may be changing due to Generation Y’s use of social media – affecting civic engagement, attitudes toward privacy, nutrition, health care practices and public safety in the general population.

This paper begins by distinguishing Generation Y from other cohorts in terms of systematic differences in values, preferences and behavior that are stable over time (as opposed to maturational or other differences). Next, we describe Generation Y’s social media use. Then, the paper describes how Generation Y’s use of social media influences outcomes for individuals, firms and society. It concludes with a discussion of research implications.

 

This research paper appeared in the Journal of Service Management, 24 (3), 245 – 267.