Millennials—that oft-described generation born between 1980 and 2000—now make up a quarter of our global population. And with numbers that outshine even the Baby Boomers, it's clear that this group stands to contribute a significant impact to the U.S. economy. According to one report, Millennial shoppers spend $600 billion per a year in the United States, and marketers are scrambling to get a piece of that pie.
But marketing to Millennials isn't, nor will it ever be, a straight shot. To understand what motivates this generation to click "buy," we have to first understand the collective values that shape their decision making.WHY MILLENNIALS MATTER
Part of grasping what makes Millennials tick is understanding who they really are. For some marketers, this may mean putting to rest certain stereotypes about the Millennial as a consumer.
With an age range from late teens to late 30s, this generation includes spending newbies as well as savvy adults. A comprehensive report from Accenture notes that while Millennials were "originally typecast as financially dependent teens, today’s Millennials include young adults in their 20s and 30s. Many have careers, are raising kids and live in their own homes."
The financial burden of adult responsibilities means that many Millennials are actually quite budget conscious. It’s an important characteristic for marketers to keep in mind, considering the group’s massive collective purchasing power—which Accenture predicts will represent 30 percent of all retail sales by 2020.
THE PURPOSEFUL PURCHASE: WHAT INFLUENCES MILLENNIAL BUYS
Only when businesses begin to consider Millennial consumers as thoughtful and budget-minded can they successfully market to this purchasing powerhouse. However, a good price alone isn’t enough for this generation. As a 2016 Nielsen report put it, Millennials also are a “social, community-driven generation that values the voice of the individual.”
In practical terms, this means that Millennials use a range of tools to inform their purchasing decisions. Here are the top three:
- Budgets. A whopping 80% of Millennials use a budget to dictate discretionary purchases, compared with only 61% of their Boomer counterparts.
- Core values. Millennials are not only concerned about saving some coin. They also want to ensure that their dollars go to companies whose values reflect their own. More than half of Millennial consumers are reportedly willing to pay extra for sustainable products, even when their money is tight, according to an international survey from Nielsen.
- Peer engagement/reviews. Everyone knows that Millennials research products and services before they buy, and often rely on peer review sites like Yelp or their own Facebook threads to inform their decisions.
However, new reports suggest that retailers would be wise to allow these exchanges to remain organic and not meddle too much. “Tribe marketing empowers a brand to behave like an effortless host at a cocktail party,” a recent article in Harvard Business Review said. “She finds attributes of her guests and uses them to allow the guests to connect with one another. Then she steps away.”
HOW CAN RETAILERS BEST RESPOND TO MILLENNIAL CONSUMERS?
Understanding the tools that Millennials use to chart their consumer course can help marketers better approach this heavyweight demographic. Three key strategies when marketing to this generation include:
- Offer options for access, not just ownership. A detailed infographic from Goldman Sachs highlights several millennial purchasing patterns, including the rise in renters over the past 10 years. If your business model allows for it, consider adopting creative marketing strategies that give Millennial consumers leased access to products and services, as opposed to only offering outright ownership.
- Embrace mobile optimization. It’s not just that Millennials “like” using their phones; they demand the efficiency and utility of scheduling services with the click of a button. If your organization hasn’t optimized its website for mobile access, purchases, and scheduling, you’re probably missing out on Millennial buy-in.
As reported in Dealer Marketing Magazine, a 2016 study by AutoLoop found that the average automotive dealer loses up to $380,000 annually in potential sales and automotive services for Millennial customers, much of which could be recovered with a renewed focus on digital access.
- Personalize your approach. It’s clear that businesses who respect the Millennial customer as an individual—and not just a walking dollar sign—find greater success in marketing to them. But how exactly do you achieve this personalization effect? The Accenture report encourages marketers to get "seamless," which they define as "the ability to deliver a consistently personalized, on-brand experience for each individual customer, at every touchpoint—anytime and anywhere."
In other words, work on your messaging at every point of interaction—from your website, to your brick-and-mortar sales team, to your social media platforms—and ensure you present a warm, consistent, engaging identity.
Millennials are becoming the most influential group of consumers in the world. As they enter the workforce and advance into leadership and decision-making roles, the entire general consumer behavior is changing. Brands must begin to adapt to this new age, and start marketing to Millennials through the same disruptive technologies that created these ever-changing consumer habits.
The early permeation of the Millennial social and culture bubble is an investment in a not-so-distant future that will not only help you connect with this brand-loyal demographic, but also force the modernization within your brand’s marketing strategy.
A strong brand that succeeds in making the Millennial consumer feel valued for their business will capture this generation’s unique brand loyalty and provide an anchor in this ever-changing, technology-and-trends-influenced consumer behavior of the Millennial generation.