Millennial Update: Effectively Targeting This Important Group
Posted: March 25, 2014
The U.S. Census Bureau estimates that Millennials over age 25 will make up roughly 19% of the U.S. population by 2020. It is at that age that income and setting up households typically start to grow in a big way. By contrast, the baby boomer group will fall to below 20% of the population in the next 8 years.
It is essential that retailers understand these younger consumers who grew up in the digital age, whose lives have been shaped by technology, and are savvy e-commerce and social media users. They are transforming how consumers live and shop. They are trendsetters and quick adopters and also have a great impact on older generations’ shopping habits, according to Renato Scaff, executive partner of Accenture’s retail practice.
Boston Consulting Group’s (BCG) new analysis indicates that Millennials are far more likely than their older counterparts to identify with brands and act as advocates for them and that their engagement with brands will “transform” marketing.
BCG’s study also indicates that Millennials’ buying decisions are more influenced by people than Baby Boomers’ and that Millennials tend to assign less importance to traditional advertising. They’re more reliant on User Generated Content: word-of-mouth recommendations and reviews. In fact, consumer reviews are more trusted than “expert” reviews.
Another interesting point often overlooked, is that Millennials are the most racially and ethnically diverse generation ever.
While the great number of Baby Boomers were the result of a high birth rate, Millennial growth has been the result of immigration. 14% of Millennials are first generation and have strong ties to their ethic backgrounds. 20% of all youth in America are Latino – many of whom are bilingual. Millennials are much more receptive of other cultures and lifestyles. 71% of Millennials appreciate the influence of other cultures on the American way of life vs. 62% of Boomers. The 2014 Super Bowl ad by Coca-Cola was spot-on when their ad featuring “America the Beautiful” sung in different languages, was aired.
Cost matters and showrooming has become a way of life for this demographic. Retail loyalty is isn’t something Millennials seem to pursue, but they Do seek engagement with a brand – be it a product, a service or a retailer – and they also want to share these experiences with friends and colleagues. Main street stores need to capitalize on their in-store experience. Kate Spade, Samsung/Galaxy and Adidas have recognized the trends and are offering pop-up retail experiences, which feature smaller formats and changes of location to keep things fresh, and consumers engaged and involved.
Retailers need to be responsive and flexible and there are things they can be doing to attract these younger consumers:
Most Millennials claim that receiving Discounts before shopping would encourage them to go back to a specific retailer for future shopping events.
Recent surveys indicate that 43% of Millennials would frequent a store if it had a Rewards Program.
Maintaining inventory ranks high in the Millennial mind. Almost 90% would not return to a store if inventory they confirmed Was there was Not available upon their visit. So, synching online and offline data is critical to capturing sales from this demographic.
A store’s website needs to be fast and functional. If a retail website crashes, 84% of survey respondents said they would not continue to shop there.
Retailers need to consider pre-store, in-store and post-store strategy, so think long-term, not short. The in-store experience should aim at cultural diversity. Store formats need to be engaging and fun - establishing a relationship is imperative long after these young shoppers leave the store. What was once a transactional experience needs to become a continually nurtured retailer-shopper relationship.TAGS: retail, retail trends, retailers,