By Grace M. Humbles
As baby boomers look toward retirement, the largest population demographic in the country – millennials – is quickly becoming an economic juggernaut that businesses are actively working to attract. The generation born between 1977 and 1995 is over 86 million strong and is projected to spend nearly 200 billion dollars this year. By 2025 (in just 11 years), millennials, also known as generation Y, will make up the bulk of the workforce. Over the course of their lifetimes, they will spend $10 trillion. For perspective, that is 33 times the gross domestic product or GDP for the state of Tennessee. Understanding the millennial consumer may seem like an insurmountable task, a competency achieved only by hip young people with Snapchat and Instagram accounts. In reality, this generation has simply built upon the ideas and influences of boomers, and is coming into its own as thoughtful young men and women prepared to engage with intelligent, authentic brands. Here’s what you may want to know about this intelligent, technically-savvy, diverse, caring group of new consumers.
Portrait of a Millennial
Defining Characteristics & Attributes
A Diverse Generation. Millennials are the most culturally diverse generation in the history of the United States. Along with a growing cultural diversity, their views on social issues are more liberal than any other generation, particularly when it comes to marital and parenting situations. As consumers, this generation will likely find themselves drawn to companies that are sympathetic and aligned with their values.
A Combo of Values. While more liberal socially, millennials’ values in life, to a large extent, mirror the things valued by older generations. Family matters most, while fame and fortune are much less important. When asked to rate how important a series of life goals are to them personally, being a good parent ranked at the top. Desire to make a difference in the world. More than any other generation, millennials believe that collective action can make a difference. They believe that working for a cause is an integral part of life and are drawn to supporting big issues with their time, money, and purchases, instead of one-off charitable contributions. Companies wanting to engage with millennials will be smart to take up a cause important to this consumer group.
Craving Authenticity. Growing up with cable TV and the Internet has exposed this generation to an onslaught of advertising and marketing messages. The ever-present inundation of advertising has resulted in a savvy, often cynical generation who is quick to see through deceptive or manipulative claims. Th is desire for authenticity is a need that can, and must, be met by companies interested in marketing to the millennial consumer.
Well-Researched Consumers. Along with an eye for deception and manipulation, millennials have cultivated their natural inclination to personally investigate products both in-store and prior to shopping. With so much information available online, this generation compares prices, learns more
about brands, reads reviews and ratings, and consults with friends before making purchases. If in a store, they will often use their smart phones to double-check prices and other information. Companies need to know their competition as well as these new consumers.
Trust their Friends. When it comes to purchasing decisions, millennials trust their friends. Nearly 70% say that peer recommendations are important. Additionally, this group values consumer opinions found on a company’s website or social media. Companies targeting millennials need to understand that they are marketing to a community and not individual consumers. A lost consumer due to poor products or services could easily result in the loss of their community of peers and friends. Conversely, a happy millennial consumer will result in a community of potential new customers or consumers.
Convenience is Key. Being exposed to fast-paced technology and innovation during their formative years has shaped millennials’ expectations for convenience. This generation expects reliable, meaningful, and quick answers to questions, problems, and requests. A survey conducted by The Economist Intelligence Unit
asked millennials to rate different factors on their importance in purchasing decisions. As many as 71% of millennials marked “convenience” as a factor they felt was “more important” than others, with “accessibility” falling closely behind at 65%. With the world at their fingertips, millennials expect to easily and conveniently access products and services.
Susceptible to the “Ikea Effect.” Millennials also crave the ability to cocreate. Interested in choice and customization, the “Ikea effect” is alive and well in this body of consumers. A concept made popular by prominent business academics professor Michael I. Norton of Harvard University, Daniel Mochon of Yale University, and Dan Ariely of Duke University, the “Ikea effect” refers to a consumer’s propensity to place a
high value on products they partially create. When a consumer is a part of the inception of a product or its assembly, they argue, that consumer is more likely to enjoy and highly esteem the value of the product (as is usually the case with Ikea furniture).
The Technological Generation. Facebook. Instagram. Yelp. Texting. Almost half of all millennials do not own a land line at all. Instead, you guessed it, they use their cell phones – often smartphones – to communicate in a growing number of ways. This generation is likely to use their phones for more than just calls – they bank, make mobile payments, get directions, and search for information all on their cell phones. In addition to the growing prevalence of smartphone use, a high use of the Internet and social media platforms is nearly ubiquitous among millennials. The use of mobile devices, the Internet, and specifically social platforms will clearly play a vital role in attracting millennials.
How to Compete in the Millennial Marketplace
The research on millennial consumer patterns can be daunting, but strategies for reaching this unique demographic are simple, and straightforward.
Meet Them Where They Are. This young generation is on the cusp of adulthood – a time full of change and growth. Important transitions to a first career, a first home
purchase, and to marriage and children, make this an incredible time in their lives. When crafting messages targeted toward millennials, recognition of these transitions creates an immediate connection between their lives and your brand. Creating welcome packs, websites, or materials geared toward new graduates, homeowners, or parents will give millennials a sense that you understand their place in life and are ready to meet them where they are.
Reach out to their Communities. With research indicating that peer influence is such a high factor in millennial decision making, it’s crucial to reach beyond the individual consumer and into the community as a whole. Social media can play a critical role in this endeavor. Chipotle’s twitter account rose to near-instant fame among young people for its humor and quick service. Twitter, Facebook, and Instagram accounts give millennial consumers a place to get to know your business in the context of their larger social network. Additionally, these accounts will improve your search engine optimization online.
Be Transparent. When communicating with this generation, it is vital to be authentic and transparent. Do what you say you are going to do. Own up to mistakes, have a sense of humor, and do not try to woo this consumer group with gimmicks. Millennials don’t want to interact with a faceless brand; they want to enter into a dialogue with a brand they can believe in.
Stay on the Cutting Edge. As smartphones, computers, and new technologies grow and develop, opportunities abound for reaching the millennial generation. As an incredibly tech-savvy and in-the-know generation, these consumers want to use the latest devices to learn more about your product and services on your website, social media, and other to-be discovered sources of information.
Make it Easy. Provide the information needed to choose your products and services in the simplest, easiest, and most accessible manners. Make your website easy to navigate and full of useful content that provides the answers to any questions they may have about your products or services. Utilize social media platforms or live-chat services to directly and quickly handle any customer service issues or questions. Remember that the first place millennials will most likely learn of your company, product, or service is on the web. Online presence is an essential part of connecting
your brand with this generation. Take up a cause. Millennials want to do business with companies and brands that share their passions. Take up a cause that is important to them and which you sincerely care for as well, and you will create a badge that this consumer group will want to wear and further endear your product or service to them.
Create an Opportunity for Customization. Offer the millennial consumer options: colors, flavors, sizes, times for delivery – you name it. Millennials want options and they want to have the opportunity to create the perfect product or service for their wants or needs.
Don’t Forget the Past. It’s tempting to think that with the rapid growth and change in the millennial lifestyle, that this generation is indifferent to the ways of the past. To the contrary, millennials embody many of the values of previous generations and are often drawn to throwback styles and packaging. Vintage clothes and products have a special place in the heart of a nostalgic millennial.
Become King of Customer Service. With Google just a click away, millennials have become accustomed to finding quick answers to any problem. From researching “how to bake a cake” to “how to get out of debt,” this generation is adept at finding solutions efficiently and quickly. Offering quick and thoughtful customer service on all platforms – social media, email, telephone, and in-person – is the key to a millennial’s heart. Help them solve their problems, and you’ll cultivate a relationship for life.
This is an exciting time to own a business, run an organization, or market to upcoming consumers. As millennials come into their own, settle into careers, and have families, they will become the face of the everyday American consumer.