Part 1: Millennials: A Generation of Big Spenders
Let’s talk numbers. According to Gallup, 51% of millennials are spending more today than they did a year ago – which means that this generation is a key consumer segment into the future and beyond. In fact, millennials currently have about $200 billion in direct purchasing power and account for $500 billion more in indirect spending through influencing their parents. The statistics (thanks to the Chamber of Commerce) are no joke – these spend-setters are on the path to outspend the baby boomers by 2017. To top it off, the U.S. Census Bureau estimates that millennials will reach 78 million by 2030, accounting for roughly 75% of the workforce in the United States. The possibilities are endless when it comes to the impact of digital advertising and the enormous opportunity for marketers.
Born in the golden age of digital technology, millennials have embraced technology as a means to make life easier and more efficient. Their biggest companion? Smartphones. An astounding 87% of millennials claim that their smartphone never leaves their side, including the 83% who sleep with their phone. On top of that, according to Bank of America, 90% of millennials rate their smartphone as “somewhat” or “very” important, but only 91% value their toothbrush as a daily importance and 87% think deodorant is essential. In view of that, digital advertising has a great influence in how millennials perceive a brand and the brand’s value, which means advertisers and marketers need to continually employ new ways of engaging millennial consumers across smartphone, tablet and social media platforms in order to fully captivate and retain this generation.
So when we think about this attitude toward technology and brands, what should marketers be focusing on as it relates to marketing to millennials? Here are three critical areas for consideration:
- Cross-channel experience: Millennials are notorious for being always connected – and in all ways. According to a global study conducted by SDL, 90% of consumers said they expect the customer experience to be seamless across all channels and devices. Millennials are at the forefront of this concept. This generation is constantly engaging on a multitude of devices and through a variety of channels. Mobile, social, and video advertising have a large influence in how millennials perceive a brand and a brand’s value. In fact, 61% feel that brands which advertise on these platforms are more desirable and relevant to them, while 58% of millennials agreed that tailored advertising helps them find products and services more quickly. Competitive advantage: From traditional to digital, create a seamless shopping experience across all platforms and channels in order to fully enrapture the millennial consumer.
- Multi-cultural impact: Millennials are the most ethnically diverse generation in the United States and have strong expectations of brands to deliver messaging that truly resonates with them and their culture. Among the 74.3 million millennials in the United States, 43% are minorities skewing heavily toward Hispanics and Asians. This group indexes higher in categories such as CPG, food/beverage and personal electronics, which means marketers in these product categories face an even greater need to employ cultural marketing strategies. More significantly, Hispanic Living revealed that Asian and African American millennials not only watch more video content than Caucasian millennials, they also have a higher contribution rate. Competitive advantage: Capture the massive buying power of the millennial segment by redefining your marketing strategy to incorporate culturally relevant messages and experiences.
- Made to order messaging: Millennials demand interaction with brands, specifically as a means for personal, timely, and straightforward communication about their concerns and experiences. They just want their voices to be heard – and for these brands to listen. Likewise, this group puts a premium on authentic, handmade, locally produced goods that offer a visually pleasing brand identity and strong graphic representation. In fact, Ace Metrix found that 75% of the performance – the impact of an ad’s message – was a result of the creative quality. The overall personalization of the product and interaction with the consumer really resonates with this audience. Competitive advantage: Develop relevant, tailored, and unique digital advertising in order to attract and retain millennials – a consumer segment that places such a significant emphasis on visuals.
How can advertisers and marketers capitalize on this audience segment beyond just today? Brands will need to continuously adjust to the millennial mindset and connect with them on an emotional, psychological, and physical level as they move through major life stages. Adaptability and flexibility will be pivotal in finding and maintaining millennial consumers in years to come.
For more information on this generation, check out this presentation on the changing media consumption habits of millennials. Prepared by Ryan Manchee, senior director of digital innovations, it was one of the highest rated Centro presentations at CES this year. You can also find additional interesting insights here:
- PART 2: FIRST SPEND-SETTERS, NOW STRESS-SETTERS? MILLENNIALS ARE OFFICIALLY AMERICA’S MOST STRESSED GENERATION
- PART 3: SPEND-SETTERS, STRESS-SETTERS, AND NOW JET-SETTERS? MILLENNIALS ARE MAKING WAVES IN TRAVEL THIS YEAR
- PART 4: MILLENNIALS AREN’T JUST #KUWTK. THEY’RE #KUTWTN, TOO!