The Millennial generation may not have much reverence for Bob Dylan’s iconic lyrics about how “the times they are a changing,” but their older counterparts would do well to keep those words in mind when thinking about the future of their brands.
Generally speaking, Millennials were born between 1980 and the mid-90s. And just like their parents’ generation before them, they are poised to make a profound impact on the way companies position their products and services.
At nearly 80 million strong, not only are the Millennials the largest generation – outnumbering Baby Boomers and nearly three times the size of Generation X – but they are also the most diverse. According to a Pew Research Center (Pew) study, the demographic makeup of this young generation is 59.8% white, 14.2% black, 18.5% Hispanic, 4.3% Asian, 3.2% other, and, even more telling as a sign of the times, 11% of Millennials have at least one immigrant parent.
Millennials also have buying power – and it’s only increasing as they age. The U.S. Bureau of Labor Statistics estimate Millennials will make up 50% of the workforce by 2030. Now in their 20s and early 30s, this generation is becoming well established in their careers and beginning to move into leadership roles where they are not only in a position to draw higher incomes, but also more willing to spend it. In fact, Boston Consulting Group (BCG), a global management consulting firm, estimates the direct purchasing power of the Millennial generation at $200 billion per year. So, companies that position themselves to appeal to this demographic, have the best opportunity to claim their piece of that pie – however, that may be easier said than done.
Millennial purchasing influences are a whole new game for many companies. Positioning a brand to target the Millennial generation requires rethinking marketing and advertising strategies that have been standard practices for past generations. This generation’s shift into the consumer sweet spot, coupled with their older counterparts on the verge of retirement, may very well prove to be the death knell for already struggling traditional media like newspapers and magazines. In fact, 59% of Millennials cite the internet as their main source for news and information (Pew). A 2010 study by market research consultancy, Intrepid, also found that 48% of Millennials say “word of mouth” was the biggest influence on their purchasing decisions. In fact, 66% say they research a store after a friend “checks in” on social media platforms, like Facebook. And according to BCG, Millennials are also much more likely to research brands through social media than their non-millennial counterparts.
So how do your strategies need to adapt? Keep a few key factors in mind.
Millennials are highly educated.
According to statistics from the Bureau of Labor Statistics, the Millennial high school completion rate is at a two-decade high of 72%, and 68% of that group enroll in college. Less than 50% of Gen X and only 36% of Baby Boomers have at least some college education.
Millennials are highly connected.
A survey of more than 12,000 Millennials in 27 countries conducted by Telefónica, the Eurozone’s largest telecom group, showed this generation is “connected” an average of six hours a day. And research from Pew found that 80% of Millennials sleep with their phones and more than 75% have created a social networking profile (i.e. Facebook, LinkedIn, etc.). And 58% visit those social media sites daily.
Millennials whole-heartedly embrace technology.
An interesting stat that is likely difficult for many Gen Xers and Boomers to grasp – 41% of millennials have no landline in their homes. They instead rely on mobile phones and other devices… many other devices. A study by Kenan-Flagler Business School at UNC found Millennials switch their attention between media platforms an average of 27 times per hour. And they’re not ashamed of it either. In a 2010 Pew poll, Millennials cited “technology use” as the number one characteristic that makes their generation unique.
Millennials are very social minded.
This generation has been very receptive to “cause marketing.” They’re more likely to support products that support a cause that’s meaningful to them, or that they believe will have a positive impact on the world around them. Companies like Toms shoes or Warby Parker glasses are great examples of the “buy one, give one” philosophy that appeals to Millennial consumers.
Millennials expect you to come to them.
These days, access to information about anything, anywhere can reside in the palm of your hand, so businesses essentially have to be “on demand.” A study by BCG found that 50% of Millennials use some kind of mobile device to research products while shopping versus only 21% of non-Millennials. Businesses not making an effort to be an active part of the digital world will likely see more and more of their customers jumping ship.
Bottom line, it really comes down to building meaningful relationships.
To truly engage with the Millennial generation, the experience needs to be personal and targeted. Their educated, tech-savvy, and social nature is a key component to their identity and companies that show a genuine willingness to meet them on their own turf stand the best chance at winning their business. For many companies that means making a complete overhaul to their brand and revising marketing and communications strategies. It’s not an easy shift, but it’s one that older generations of business leaders are finally recognizing on the horizon.