Millennials have quickly become the most prized generation for marketing and advertising agencies, but can be challenging to understand. With over 79 million Americans between the ages of 16 and 34, Millennials now make up more than a quarter of the population. They will outsize their Baby Boomer parents as the nation’s largest living generation in 2015 with 79.2 million at their peak. As the lowest age bracket of the generation hits adulthood while the oldest are settling down to buy homes and raise families, all eyes are on their consumer behaviors.
Millennials: All eyes are on their consumer behavior (Photo by Ryan McGuire)
With a slew of reasons, including two recessions, Millennial-led houses spend less than average US households. They tend to be cautious consumers who shop for deals, but as the economy recovers, their expenditures will slowly grow and they hold huge collective buying power. They make up 21% of consumer discretionary purchases, translating to over a trillion dollars while also greatly influencing older generations (like mom and dad who many still rely on financially).
Millennials: tech-savvy, socially driven, cooperative, adventurous, and passionate.
Various factors set them apart from older generations (check out this elaborate chart) and everyone seems to have an opinion on which ones are most discerning. Forbes has an easy breakdown of five traits: tech-savvy, socially driven, cooperative, adventurous, and passionate. And they expect you to be as well. Developing this ideology into your business plan instead of expecting them to conform to the generation gap will align a formidable position to harness their short attention spans.
Millennials were the first to come of age with cable TV, Internet, and cell phones. By 2017, they will make up the largest online audience. They will also have more buying power than any other generation that has come before it. Yet, of 121 businesses that were surveyed in a study done by BusinessWire, “Approximately half of respondents (were) unaware that Millennials are expected to outspend Baby Boomers annually within five years.” Check out some of the dozens of companies trying to make it work here, here, and here.
Millennials make up the largest use of smartphones across all groups (Photo by Ryan McGuire)
Millennials are notorious for their use of their phones, for better or worse. A whopping 86% of Millennials own smart phones and they make up the largest use of smartphones across all groups, spending upward to 14.5 hours per week on them. Not only are they looking at their phones all day for text messages and Facebook, but they’re making guided decisions about purchases on them as well. Overall use of mobile devices for e-commerce increased from 20% to over 50% in three years and will continue to grow, especially as the younger end of the generation ages.
Millennials are already directing companies to focus on interactive technologies and fluid user experiences. If you’ve ever been annoyed with the young guy busy texting on his cellphone, you know their communication has changed. They prefer using self-service solutions to find answers and generally won’t use live chat, emails, and definitely not the phone. They’re also 2.5 times more likely to adopt new technology than older generations which means companies need to constantly reassess their methods. Not only are Millennials more likely to use mobile devices to research and purchase products, they’re much more likely to use social media for peer affirmation, answers to questions, and will likely broadcast their experience afterwards.
Millennials interact with each other constantly and when they’re looking to buy something, they go to friends and even strangers for suggestions. Two-thirds of Millennials were likely to make a purchase based on content shared by one of their peers on social networks. Millennials are greatly influenced by word-of-mouth (WOM) and companies should focus on campaigns that create content worth sharing like online product teasers, exclusive offers, and community service news.
Relationships & Trust Through Social Media
Building relationships and trust through social media is a great way to approach Millennials. Give them something to talk about and make sure it resonates constructively. Remember, everything can be captured in a screenshot or in an audio clip, uploaded in a second, and sent viral to thousands of users. Not only must you engage Millennials but also staying engaged is critical. Response to comments and complaints quickly and proficiently can make or break a company’s reputation in a day.
Millennials really do have a fear of missing out (FOMO) and are constantly connected (Photo by Ryan McGuire)
Millennials really do have a fear of missing out (FOMO) and are constantly connected. Facebook continues to be the primary social channel used, although its use among younger Millennials shows a decline as other apps accelerate. Studies show that 88% of Millennials use Facebook to get news and 55% use Facebook to share information, with Twitter close behind. Other apps used to discover content like YouTube, Google+, and Pinterest are steadily growing. Instagram and Snapchat aren’t as relevant for sharing information as for keeping up with friends’ daily activities but still consume large amounts of Millennial time. Hypertargeted content like Pandora and Spotify are quickly taking over their music channels. Millennials make up 50% of no-TV households and instead watch content on YouTube, Hulu, and Netflix from their smartphones and laptops.
So what does this mean for marketing? Many studies indicate that they aren’t influenced by advertising, or at least not as much as their older counterparts. Millennials were the first to grow up with tailored web ads and entire cable television channels devoted to them. They’ve been subjected to targeted advertising their entire lives and social media has accelerated the personalization of ads. Traditional advertising just doesn’t work anymore and they’re likely to filter it out unless they want to see it.
However, Millennials identify with brands more personally and emotionally than older generations. And as a result of being constantly engaged, Millennials like being involved. Companies that include their consumers in their branding, outreach, decisions, and so forth are much more likely to capture fleeting attentions and retain long-term loyalty. Gain their trust and build a relationship by engaging them, offer incentives to bring them closer, and keep them involved by offering a personal connection.
Be authentic, be conscientious, be weird, be unique. (Photo by Ryan McGuire)
How To Harness Millennial Purchasing Power
Many variables can affect a successful connection with Millennials but it’s important to remember that as your consumers change, so must the relationship. They’re adaptable creatures, weathering rapid technological changes while riding out unstable economic times. Connected and thrifty, they’re looking for online coupons and free giveaways through effortless mobile sites. They have instant access to search engines and social media sites so if you can’t offer it, they’ll find someone else who will. They’re more group-oriented, more diverse, and have different family structures from previous generations and respond favorably to imaging that reflects that. Be authentic, be conscientious, be weird, be unique. Not only will you stand out from the hoards of other brands grappling for attention, you’ll look progressive and hip.
And remember, YOLO! By the time we finally get the Millennials figured out, we’ll have to reconvene and deliberate the mysteries of Gen Z.