Connecting with the Connected Generation
How well do you know the Millennial generation? Try this quick pop quiz:
What’s the best way to keep Millennials happy when they shop?
a.) Have plenty of the must-have items stacked high. b.) Make sure the store is easy to navigate. c.) Play the right music.
How do Millennials feel about brands?
a.) Wearing the right brand positively reflects who they are. b.) Brands take a back seat to style. c.) Great fit trumps a brand name any day.
When it comes to choosing a restaurant, Millennials…
a.) Tend to be confident in their decision-making. b.) Commonly text friends to validate their choice. c.) Rely on Zagat.
It turns out that ease of navigation is the most important attribute to Millennials when they shop a store (though affordable pricing also ranks high on the list). Brands matter to Millennials in a big way — far more so than they do for older generations. Millennials say that wearing the right brand and the highest-quality products positively reflects who they are. And when they’re deciding where to eat on Saturday night, about 40 percent text friends or visit social media sites like Facebook or Twitter to validate their restaurant choice. That’s three times more than non-millenials.
Whether you aced the quiz or struck out, there is plenty of data about Millennials that retailers need to assimilate — and there’s no time to waste.
“Estimates count some 80 million Millennials in America today, making this generation three times larger than Gen X, the cohort that preceded them,” says Jeff Fromm, senior vice president of marketing and innovation for Barkley. “Millennials have an anticipated direct spending power of around $200 billion and an indirect spending power estimated to be $500 billion. And many of them are in their prime spending years, setting up homes and beginning their families.”
Compelling as those figures are for retailers looking to grow their business, Fromm is quick to point out that the journey could get complicated. Millennials’ attitudes are fraught with contradiction and their behavior patterns can be difficult to predict.
For instance, Millennials are twice as likely as other generations to believe they’re missing something if they don’t use Facebook daily, yet they admit to feeling inundated with the quantity of technology and information available to them. And while Millennials care about causes and issues and are more likely to show a preference for retailers who support the ones with which they align, they’ll compromise personal values in exchange for a 25 percent discount.
Barkley, in partnership with The Boston Consulting Group and Service Management Group, recently conducted a large-scale study called “American Millennials: Deciphering the Enigma Generation.” The research, based on more than 5,000 customer surveys — including nearly 4,000 Millennials — is representative of the U.S. population on all key demographic metrics (ethnicity, income, etc.). It will be examined in depth next month at the Share.Like.Buy Marketing + Millennials conference in San Francisco.
While it probably doesn’t come as a surprise that Millennials adopt technology much earlier than older generations, it’s interesting to explore how they use it. The data indicates that they are significantly more likely to have their own blogs or websites and to upload content to the web, rate products and subscribe to news feeds.
What’s more, while all age groups cite 11 to 20 hours as the most common amount of time spent online per week, the younger cohort uses the Internet for entertainment in the form of games, music, TV and movies; older generations are more inclined to rely on the Internet for business.
The study reveals that while Facebook’s appeal seems to be generation-agnostic, Millennials maintain significantly larger networks of friends and are more likely to take part in photo and video sharing, wikis, blogs and micro-blogs.
“Every detail of their engagement with technology spells opportunity for retailers,” Fromm says. “Millennials told us that they are far more likely to favor brands that have Facebook pages and mobile websites [and] they’re more likely to explore and show a preference for brands that participate in social media when it’s time to make a purchase. If that’s not a call to action, I don’t know what is.”
The survey provides retailers with numerous clues to harnessing the tremendous buying power of Millennials. Along with being sure that the store is easy to shop, more than half of female Millennials are partial to fun and “energizing” shopping experiences. Both genders expect sales associates to be fashion savvy; guys, in particular, say it’s important to be able to relate to those on the sales floor. In addition, Millennials gravitate toward shops where the associates are wearing the newest looks and where the “right” music is being piped in over the speakers.
Millennials love “names” and show it by shopping prominent higher-end brands nearly three times more frequently than older generations. Still, more than half of female Millennials say they look for shops that have unique items they won’t see on everyone else. Their penchant for distinctive products stands out; only about one-third of older shoppers feel this way.
Where they choose to shop and how they perceive the experience also provides hints as to how the retail landscape may change in the years ahead. Female Millennials shop discount/off-price clothing stores with the greatest frequency, with specialty retailers like J.Crew and Urban Outfitters running a close second. Male Millennials are more likely to shop Target or another mass retailer first, followed by JCPenney or Kohl’s and then other department stores. Outlet centers and open air malls receive a collective “like” from all Millennials.
It’s interesting to note that female Millennials are twice as likely to shop with friends or significant others and they’re significantly more likely than older generations to see shopping as a pathway to relaxation. They’re also much more likely to consider access to shopping areas to be important in deciding on vacation destinations. Male Millennials appear to be much more comfortable with shopping than their predecessors; 30 percent say they shop for apparel two or three times per month, and 8 percent shop once or more per week.
Ready to work
At Service Management Group, where the retail customer experience is always under a microscope, executives are studying the Millennials research to determine how their perspectives on shopping, technology, marketing and the like are apt to reflect on their attitudes toward employment.
Craig Safir, vice president of marketing for SMG, calls attention to some critical takeaways. “Millennials are very confident in their abilities and want to work on projects of significance. They won’t toil in obscurity,” he says. Therefore, “Employers must rethink the traditional apprentice approach to harness the impact this talented group has to offer.”
In retail circles — where this generation sparked rampant turnover rates — Safir suggests companies think long and hard about creating an environment that “engages and rewards this restless pool of talent.
“Rewards needn’t only be monetary, but can focus on greater work/life balance opportunities,” he says. “This group wants fresh experiences across a wide range of assignments that helps them meet ambitious personal goals. Millennials have high expectations of themselves and their employers.”
Contrary to frequent criticism suggesting that this cohort is less loyal than others, Safir portrays Millennials as “looking for meaningful relationships in every facet of their lives, especially at work.” He proposes that employers look for occasions to fulfill Millennials’ cravings for strong collaboration across functions and tenures to give them the diverse and personal experiences they covet. “Relationships can trump pay,” Safir insists.
There are interesting facts and figures throughout the research about everything from social/mobile/ digital media habits to their attitudes about packaged goods, restaurants, cause marketing and more. Many of the findings challenge previously held viewpoints on this generation’s way of thinking.
Would you have guessed, for example, that Millennials prefer to shop for food at supercenters? The study also reveals that they consider the availability of exotic foods an important factor when selecting a store, and that they consume more fresh and organic foods than older generations. Still, Millennials admit that their healthy eating habits frequently go out the window on weekends.
Millennials choose restaurants because they want a place to gather with friends or family or to socialize with co-workers or classmates. They say they eat at fast-casual restaurants because they don’t have time to prepare meals at home — yet they’re not satisfied with standard eats. This cohort demands variety; exotic, interesting and healthy food offerings served in a fun environment rank high on their wish list.
Millennials report a significantly greater awareness of cause-marketing programs than older generations. Still, the data brings to light a few interesting tidbits related to their outlook on causes. Millennials prefer to participate and even lead events to raise money for causes, but they are much less likely to make a direct financial contribution.