Marketing to Millennials: Understanding the Largest Generation in the United States
The term "Millennial" has picked up speed in the past several years as the moniker for the largest generation in the United States — 1/3 of the population falls within the age range known as Millennials, which encompasses anyone currently between the ages of 18 and 34.* What Millennials want, how they consume and their purchasing habits cannot be likened to those of any other demographic. This is the first generation with access to the internet in their formative years. Younger Millennials did not know a time without cell phones and laptops. So, how do they consume? What attracts them to products and brands, and what keeps them loyal?
As a group with $1.68 trillion in spending power**, it's important to understand what makes Millennials, the most diverse and educated generation, tick. That means delving into who they are as citizens and consumers, as well as exploring the stereotypes that have been attached to them as an overall demographic.
Millennials at a Glance
The term "Millennial" can be divided into two groups – older Millennials, used to describe those in their late-twenties to early-thirties, and younger Millennials, those between the ages of 18 and their mid-twenties.
Both subcategories have seen economic hardship in the U.S. at a young age, with older Millennials making decisions about the future of their education and career during the great recession. The need for economic caution early on in their lives had a lasting impact on the spending habits of older Millennials, making them different than those of, for example, Generation X or Baby Boomers, two generations that grew up during a time of financial stability and growth.
Older Millennials also represent a small but growing customer base. With an age range that reaches up to the early 30s, many older Millennials are currently getting married, having children, and purchasing homes – if they have not done so already.
Younger Millennials represent a future customer base. Their age range indicates a different stage in life, with many entering college or joining the work force for the first time as professionals. They may have experienced the great recession as students, or seen its effect through their parents and families. Although they do not currently represent a large base, their spending power will increase with time.
Understanding the characteristics of the Millennial generation, both older and younger, can ultimately lead to greater success in marketing to them, securing both their loyalty and their spending power.
Millennial Stereotypes: Misconception vs. Reality
Millennials are a generation shrouded in negative stereotypes. It is commonly assumed that they are:
|Millennials do not have money||Millennials spend roughly $600 billion dollars annually|
|Millennials don't care about customer service||Millennials want a seamless customer experience that is digital and conversational|
|Millennials are self-centered and lazy||Millennials fall in a younger age range that carries fewer rules and obligations in comparison with later adulthood|
|Millennials do not affect purchasing power||Millennials have both spending power and influence in the purchasing decisions of their friends and family (often the source of advice for the "latest" technology, etc.)|
The realities of the Millennial generation point to a demographic that is focused on personal interests, careers, and social circles far more than they might be in another decade. But they also demand a more integrated and seamless experience from their brands, demonstrating loyalty to brands that interact with them and care about their opinions. Millennials have massive share power, with 9 out of 10 taking weekly action on behalf of a brand.***
The Bottom Line
Millennials are a young but growing demographic, with enough financial power to make an impact in the market. Their demand for integrated brand experiences combined with cautious spending as a result of the recession creates the need for brands to strike a balance between relevance, transparency and value.
Millennials represent a cultural shift in both values and concepts of adulthood. Those shifts, along with the trends they produce, are important in further understanding how to effectively market to Millennials.
* The Boston Consulting Group
**CEB Iconoculture Consumer Insights
***Edelman Public Relations Study