Millennials have surpassed Generation X as the largest generation in U.S. labor force; one-in-three American workers today are millennials (See graph above from PEW Research Center). As the millennial population continues to increase, it has influenced how marketers are operating and making future decisions. Many of the millennials have obtained higher levels of affluence and are seeking premier and luxury brands. The average Millennial household, which is expected to continue to expand, has an income of around lease $100,000. As marketers take the expansion of this generation into account, marketers are looking at how to provide goods and services that millennials would utilize.
As Millennials continue to obtain higher levels of education, career paths with higher-earnings are likely to follow. Furthermore, as millennials postpone marriage, setting up house, and starting families, this fosters an increase in consumer spending. Younger affluent millennials are in a stage in life when they make first-time luxury purchases, such as a nice car, expensive appliances, and furniture. Based on a recent article posted by Unity Marketing Online, younger affluent consumers, under 45, are more valuable because they spend significantly more on luxuries than more mature affluent individuals, aged 45 to 64 years old.
These affluent Millennials have the means, based on their income, to follow trends that have emerged such as organic, fresh food, luxury cars, and expensive technological gadgets. Moreover, millennials, because they are so connected online, often post their likes and dislikes, further influencing companies to offer Millennials with goods and services they want. Marketers, in designing and marketing to the affluent millennial group, face great challenges because of the individualized needs of Millennials. Furthermore, millennials are very independent, meaning that instead of looking for brands to be with them along every step of the way in a purchasing decision, Millennials want to be the ones that make the decisions, while being supported by the brands.
Several brands have altered their offerings to appeal to the rising affluent millennial generation. For example, American Express, who begun Small Business Saturday in 2010, has continued to encourage shoppers to support small, local businesses every year on November 27th. Because American Express, embraced millennials passion for entrepreneurialism, American Express has gained business from the millennial generation. Uber, a ride-share app platform, has embraced the idea of co-ownership with Millennials. Uber, as a company created to be run by the people that use it and offer accessibility, has accomplished great success in a short period of time. Finally, Birch Box, a subscription service that mails new beauty products to consumers, allows consumers to try products in the comfort of their own home, while having the newest products. Mail order subscription-based companies are seeing continued success with millennial purchasers because of the ability to offer a customizable product that is delivered to the home.
The millennial generation will continue to grow and influence those around them. As many millennials are still at the beginning of the careers, their affluence is expected to influence the way brands and marketers create products and services. The most important aspect for marketers to understand is that Millennials do not want the same things as their parents or grandparents. Millennials want luxury on their own terms and delivered to them on a more personalized basis. Brands must match the aspirations and drive for meaning that the millennial generation reflects.
From a marketing management perspective, here are some questions to consider:
- Investigate other ways marketers can appeal to affluent millennials. What should marketers keep in mind when creating a new product or service?
- Why do you think millennials seek luxury brands and products?
- How do you think companies can align their future goals with millennials needs and desires?
Marketing Management 