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A chart visually depicts key information on Millennials, such as the generation’s purchasing power ($1.68 trillion) market size (75.7 million), average household income ($60,000), consumer debt, and average use of monthly income.

Millennials will consist of about 75% of the workforce by 2020 and are demanding the attention of marketers worldwide. Source: Forbes Magazine

The Millennial generation is a fascinating one, not only due to its sheer size and power (its consists of almost 80 million people, surpassing even Baby Boomers, with an estimated purchasing power of $1.68 trillion), but also due to its distinction from previous generations. In part attributable to the unfavorable economic outlook that members of this generation faced upon reaching adulthood, many have adopted a less traditional approach to life that includes a “unique sense of self” and “surprisingly optimistic outlook on life” according to a Forbes Magazine article. For this article, Millennials are defined as 19-36 year olds.

Katie Elfering, a CEB Iconoculture consumer strategist and expert on Millennials, shared her insights on the topic with Forbes.

Elfering explains that traditional drivers of older generations’ purchasing habits such as getting married, buying a home, and starting a family don’t so easily apply to this generation, causing Millennials to delay these options (according to the California Association of Realtors, the average first-time homebuyer is 31 years old) and consider a variety of other alternatives. She states that Millennials are often misjudged or misunderstood because, as a result of seeing so many paths and opportunities in the world, they are “assumed to be in a state of perpetual stunted adulthood,” when in reality, “a lot of these aspects of adulthood aren’t as available as they were in the past and, more importantly, because they know they have a lot of alternative options for what adulthood looks like.”

About half of older Millennials are married and half have kids, although not necessarily the same half. For Millennials who have formed families, these families may not be as nuclear as seen as TV. An article in Advertising Age discusses the changing roles and increased spending power of Millennials dads, which are more likely than older dads to share responsibility for everyday parenting tasks. According to Mintel, 80% of Millennial dads claim primary or shared grocery shopping responsibility, compared to 45% of all dads, according to Y&R’s BrandAsset Valuator data. Brands can therefore benefit from considering dads in their packaging, signage, demonstrations, and technology. Also, Millennial dads are more concerned with quality than savings and are willing to spend more to feel good about what they are bringing home for their families. Value has less of an influence on purchase to Millennial dads than it does for dads in general. BrandSpark International found that while only 11% of moms claim that using coupons at the check-out counter makes them look or feel cheap, using coupons make 34% of dads feel this way. Finally, Millennial dads place a higher value on entertainment and leisure within their family, and the more that brands can do to foster this family time, the more brand-loyal a Millennial dad will be.

Acknowledging this, Elfering believes that companies should stop waiting for this generation to evolve any more than it already has and embrace it in its current state by following the three guidelines, below:

  1. Speak to the values the drive Millennials: happiness, passion, diversity, sharing, and discovery. Notice that these tend to be more individualistic rather than collectivist values and relate back to new experiences. In contrast, older generations have more heavily valued justice, integrity, practicality, and duty. In mid April, Starwood Hotels and Resorts Worldwide debuted its Tribute portfolio, its first brand launch in nine years, to win over Millennials. The company plans to open 100 hotels (some will be converted from existing buildings and some will be built from the ground up) by 2020, beginning in North America and Europe. In keeping with the Millennial mindset, each will be independently owned and will retain its individual look and feel, yet will have access to Starwood’s loyalty program, technology, infrastructure, global sales force, branding, and marketing expertise. Tribute’s tagline is “stay independent” and its marketing was initiated when social media “influencers” visited a Tribute hotel in South Beach to take and share pictures of Twitter, Instagram, and other social media platforms.
  2. Understand their realistic lifestyles and experiences and find ways to employ their reality. Innovative and engaging brands like Uber and Red Bull, with its event marketing, speak well to Millennials.
  3. Ensure they feel informed and involved as opposed to advertised to. Millennials want to know how a company’s product or service can be a useful tool in their daily lives or how it can solve a problem that they have. Tide Pods is a good example of a product that addresses the needs of this target market well. They are “no-fuss,” quick, and energy efficient.

From a marketing management perspective, here are some questions to consider:

  • Select a company that sells relatively traditional products. What type of marketing campaign can it launch to appeal to Millennials? I.e., is there a way to make the product more innovative, engaging, or experiential?
  • What else can Starwood do with its new Tribute brand to make the hotels appeal to Millennials?
  • Can you think of a company that has particularly “missed the boat” when it comes to marketing to Millennials? What has this company done wrong, or what can it improve upon to better address this market?