Who are the Millennials?
Millennials are the generation born between 1977 and 1995. Gen X is the generation born between 1965-1976; Baby Boomers were born between 1946-1964. Millennials as a group are larger than Boomers. Millennials will account for one third of all retail spending in 5 years. And soon Millennials will be 50% of the workforce. Goldman Sachs recently published a report called “Millennials: Coming of Age in Retail”.
Key findings on Millennials:
- Earning less than previous cohorts
- Hit hard by the recession
- Less likely to get married and to start households
- Much more health conscious
- Entering prime spend years
- Really like athletic brands
- Want to make the most of their leisure time.
- Much more tech savvy/Love social media
- Willing to share opinions and experiences via social media.
- Not brand loyal
Shopping behavior for Millennials is no longer passive. Millennials want to interact with brands, to co-create products and to participate in the brand experience. Millennials want to discover new and dynamic products from a proven name, approved by their peer group. Millennials today are looking for relevance and authenticity. They want to develop relationships with brands that deliver a personalized, customized experience. Brands that don’t understand and respond to these needs will fail.
The New York Times Magazine has a section called “That Should Be a Word”. Recently they made up:
MESPOKE: (me-SPOKE), adj. Tailored exactly to one’s lifestyle. “Dylan was a member of the mespoke generation: From his iPod playlist to his favorite shot of espresso at his neighborhood cafe, he never had to experience anything that wasn’t his explicit choice.”
Millennials seek out brands that feel unique to them (and make them feel unique). These brands have been vetted and approved by their peer set. They aren’t going to be loyal to your brand because they don’t have to be. Millennials have been taught to be curious their entire lives. They are incredibly smart and savvy. They know how to research a brand.
All these traits trump traditional ad campaigns. Millennials are constantly interviewing your brand, and your brand has to prove itself, every day. For Boomers, there were fewer shopping choices, fewer shopping outlets and fewer sources of product information. For Millennials, those elements are infinite. And these elements are all in their pocket, on their mobile devices.
Millennials have never known a world without the Internet. Because of that, Millennials are more connected to each other than any previous generation. They share everything. When they want to know something or get an opinion, they consult their peer group. And Millennials’ groups are much, much larger than the Boomers’ groups are.
Consequently, Millennials are more engaged with products. They want to interact with brands and want to share feedback.
Mobile is preferred method of communication.
Because Millennials are internet trained, there is an expectation for instant gratification. Email is too slow and cumbersome. Text messaging is more immediate and can be used when a phone call is inconvenient. Twitter TWTR +1.94%, Instagram and Pinterest shares your thoughts in real time.
Because Millennials are so digitally engaged, and have shared so much knowledge with their peers, they are much early adopters of new ideas, concepts and products. This will drive the speed of change even faster than what we’ve known. Leveraging early adopters will build brand equity.
Knowledge Based Economy
The concept of branding has changed in that the Millennials is so much more aware of a product’s attributes and issues and therefore consumers are much less brand loyal. If they perceive your competitor’s product to be better or to perform more in line with their needs, they will change in a heartbeat. Consequently, brands must keep their consumers well informed and up to date, not just on what’s in the market now, but what coming next .
Frugal, Not Cheap
Millennials have been hit hard by the Bush recession. Good paying jobs have been hard to find. Many are saddled with massive college debt. This has created a frugal generation. Millennials are always looking for value.
But don’t read frugal as cheap. Millennials may be cautious with their purchases, researching them extensively. But if they decide a more expensive option is the best solution, that’s the decision they will make. Millennials want value for their hard earned money.
Don’t talk, listen (and respond)
Boomer generation marketing was reactive. Brands ran an ad campaign and measured how many consumers responded. Millennials don’t react; they interact. They are a part of the branding process, from sharing a great YouTube ad, to advising friends on purchase experiences, to giving positive and negative feedback directly to a brand. Remember, just because it is easy to hit the “like” or “favorite” button, does not mean those recommendations are given out lightly. (And a “like” is just as easily reversed).
Physical stores have a role
Physical stores are no longer the place where you learn about products. Physical stores are places to try out products, not research; Millennials go to physical stores to see if products fit or if the color is right. Physical stores must adapt to this fundamental change.
Malls are in trouble
Malls are no longer where young people hang out. Now they hang out on their phones. Next time you are in a mall (and I’ll bet it will be a while), go to the food court. The only people who are there are retirees, nursing a cup of coffee. The good, top end malls will survive, but the rest are doomed.
“Omni” or “all” channel is old school thinking. Millennials don’t care about your businesses logistics or Chinese walls. They want what they want, whenever, wherever, and however they want it. If your brand can’t give it to them that way, they will move on. Your brand experience must be completely transparent and seamless, with no hidden quirks. There is only one channel: all of it.
Engage, don’t market. Listen well and respond. Provide value. Find out where your customers are living, digitally, and involve them there. Seek interaction, not reaction. Market with Millennials.