With a population of about 76 million people, the “Millennial” generation is expected to soon overtake Baby Boomers as the largest living generation in the United States. In 2015, Millennial consumers will spend an estimated $2.45 trillion worldwide, according to a recent study conducted by the Center for Marketing Research at the University of Massachusetts — Dartmouth. The sheer size and purchasing power of this demographic are two compelling reasons for your business to tap into this lucrative market segment.
What makes Millennials — people born from 1980 to 2000 — so special? Last year, independent research company Pew Research published a report, Millennials in Adulthood: Detached from Institutions, Networked with Friends, which sheds light on the newest generation of adults. Here are some of the key characteristics of Millennials taken from this report:
- Independent. Millennials are less likely to be affiliated with a specific religion or political party. They’re also likely to disdain fashion trends, gender and ethnic stereotypes, and old-fashioned labels like “patriotic” or “environmentalist.”
- Technology savvy. Millennials are known as “digital natives,” because they didn’t need to adapt to today’s technology such as smart devices, apps and social media; they were born using it. Facebook is the most popular social media platform among Millennials who interact with companies online. Youtube comes second. As far as social media go, Millennials are more likely to like, follow or pin a company on social media than any other generation. They lead the social commerce movement by making frequent purchases on their smartphones and tablets.
- Racially diverse. The Millennial boom was driven by a large influx of Hispanic and Asian immigrants coming into the United States over the last 50 years. The children of these immigrants are now becoming adults, and they’re influencing social and financial trends. Approximately 43 percent of Millennials are non-white today, the highest percentage of any generation.
- Economically challenged. Many Millennials came into the workforce during the recession and face higher unemployment than previous generations did at the same stage of their lives. In January 2014, 13 percent of Millennials ages 18 to 24 were unemployed, and many continue to live in their parents’ homes as adults. As a result of these challenges, Millennials tend to be budget conscious. They’re likely to research their purchases in brick-and-mortar stores and then comparison shop online. They prefer brands that offer consistent discounts. Despite the economic challenges they face, however, Millennials are “the nation’s most stubborn economic optimists.” Many Millennials resolutely believe that America’s best years are yet to come.
- Educated. One-third of older Millennials (ages 27 to 34) have college degrees, making this the best-educated generation in U.S. history. Unfortunately, they also have the highest average student loan debt of any previous generation. Two-thirds of today’s undergraduate degree recipients have outstanding student loans that average about $27,000. Two decades ago, only half of bachelor’s degree recipients graduated with student loans, and the average balance was $15,000.
- Unmarried. Only 26 percent of Millennials are currently married, compared to the 36 percent of generation Xers and 48 percent of Baby Boomers at the same age. A major reason that Millennials postpone marriage is a lack of financial security. Unlike previous generations, marriage rates tend to be higher among Millennials with higher education levels than those without college degrees, presumably because they’re on stronger financial footing.
Lessons for Businesses
It remains to be seen whether or not Millennials will retain these characteristics as they age — or whether some of these traits are a function of timeless youthful optimism and naivete. But at the moment, these trends can help business owners get inside the Millennial mindset today. Here, we’ve translated the findings of the University of Massachusetts study and the Pew Research report into six tangible steps to market your business:
1. Use social media. When the Internet first gained acceptance, companies discovered that they needed to develop a website to remain competitive. Now a similar thing is happening with social media. Companies are finding that they need to facilitate social commerce using smart devices and maintain accounts on various social media platforms, such as Facebook, Twitter, Instagram and Pinterest, to stay competitive.
To attract Millennials, consumer-based companies should try to get Millennials to like, follow or pin them on social media platforms. Not only does this give your company permission to contact that individual throughout the purchasing process (and beyond), but it also spreads the word to his or her social media contacts. Considering that the average Millennial has 250 Facebook friends, this type of word-of-mouth endorsement can significantly boost your brand.
2. Offer coupons and discounts. Appeal to the budget-savvy Millennial by offering low prices, discounts and coupons. A key reason Millennials identified for “liking” a company on Facebook was to take advantage of discounts or coupons. Your marketing campaigns should communicate the value that your products or services provide.
3. Consider sharing options. Practical-minded Millennials often prefer access to ownership. For example, they may opt to watch a movie on Netflix, rather than purchase a DVD. Or they might use Zipcar over buying their own vehicle.
4. Use clever, subtle and authentic messaging. Millennials are bombarded with information from various forms of media, and they tend to have limited attention spans. Thought-provoking, novel ads that don’t try too hard to appear “hip” are your best bet to win over Millennials. They generally don’t respond well to traditional “push” marketing strategies.
5. Always be sensitive about social issues. A sure-fire way to turn off Millennials is to run an ad campaign that promotes negative gender or racial stereotypes. In your promotional materials, be sure to include diverse images, including men and women, as well as a variety of age groups and ethnicities.
6. Hire Millennials. The best way to get inside the Millennial mindset is to simply hire employees in the age group and pick their brains. Use in-house Millennials to test market new ideas, ad campaigns or products. They may have suggestions to fine-tune your offerings or more effectively integrate technology into your business plan.
Have you ever posted a “selfie” on Facebook? Do you even know what a selfie is?
As evidence of the influence that Millennials currently have on social trends, the New Oxford Dictionary has added the word “selfie” to its repertoire. The definition: “A photograph that one has taken of oneself, typically one taken with a smartphone or webcam or uploaded to a social media website.”
More than half of all Millennials have shared a selfie using social media, compared to 24 percent of Gen Xers and 9 percent of Baby Boomers.
Social media can be a powerful promotional tool. The next time you attend a business conference, launch a new product or participate in a charity event, consider snapping a selfie to accompany a post or tweet about the development. It can be an effective and inexpensive way for your company to get the word out.
Power in Numbers
Similar to any religious or ethnic group, Millennials are a group of individuals — and not every person in the group fits the generalizations provided by research studies. However, the studies do provide insight into general Millennial buying habits that business owners can incorporate into their business plans. Proactive companies will continue to monitor how their wants and needs evolve as the Millennials age, build families and expand their relative purchasing power.