Who are Millennials and where do they come from?
They have dramatically different consumption habits than their parents or grandparents. They came of age as the smartphone rolled out, and they’ve never known a world without the internet. They are Millennials (aka Gen Y), a generation born between 1981 – 1996 (as determined by the good people at the Pew Research Center).
Gen Y is massive and needs to be reckoned with: it clocks in at over 75 million Americans, amounts to almost a quarter of the total US population and two-fifths of the labor market. At 44% minority, it is also the most diverse generation in US history (Brookings). All the way back in 2012, the Chamber of Commerce Foundation estimated that Millennials spent around $200 billion per year on goods and services (US CoC). So, as a brand, you might ask yourself some questions:
What are the key characteristics of this demographic?
What do they value? What influences their decisions?
How can we tap this immense purchasing power?
Well, as someone who works intimately with Gen Y and the companies answering these questions, I have 3 insights…
A generation that came of age in the Great Recession minds its budget. With ballooning student loan debts, higher cost of living, and stagnant salaries, Millennials want to see and feel the return on their investment. Whether it’s boots with a lifetime warranty (e.g. Red Wings), or fast casual dining (e.g. Chipotle), this is a key to engaging and retaining Millennial consumers.
This is among the reasons why the subscription-based pricing model has done so well in the last five years (Stanford); the lower sticker price it touts and the flexibility it offers is a great fit for the lifestyle and the pockets of the Gen Y consumer.
2. Community & Impact
The true guinea pigs of the social media ecosystem, Millennials bore the brunt of the disruption to social interactions brought on by the social media platform (e.g. Facebook, Snapchat and Instagram). Millennials operate in a society in which screen-borne content is the primary means of interaction (that is to say a flattened society), and they are keenly aware of the fact that what they are seen to be doing (e.g. traveling, working, shopping) is read as a conscious statement of value. Choosing a brand, then, is choosing what to represent.
What Millennials seek out, actively, is community and impact. They want to see their own interests and contributions acknowledged and reflected in the groups with which they associate. Millennials’ choice of retailer is a social signal: it’s a beacon that shows their peers what they care about and who they are. Millennial consumers want to see their ‘best selves’ reflected in their chosen brand so that they can project that best self into their social network and step closer to their aspirations through their purchases.
3. Authenticity of/and Experience
Maybe you’ve seen the meme of Steve Buscemi with a backwards cap and a skateboard slung over his shoulder. Maybe you’ve seen the Wendy’s twitter throw down with some other personified restaurant chain. If you haven’t, go look it up, it’s pretty fun.
The idea of Millennials chasing ‘experience’ has been overblown and deservedly-derided, but it does point towards a kernel of truth. Millennials have immense trust in the lived experience of the people around them. More trust in the recommendations of their friends, family, and social circles than they do in traditional advertising. A study by Kelton Research demonstrated that a whopping 84% of Gen Y uses user-generated content to shape their purchasing decisions (BazaarVoice). At the same time, only 1% reported that traditional advertising increases their trust in the brand. Frankly, I’m surprised the number is that high, especially when you consider how 75% of Millennials see advertising as disruptive, and many adopted ad-blocking software (pagefair). Brands that successfully carved out an identity in the social media landscape have done so by mimicking the language and attitude of their target: they’ve donned the guise of a friend or internet-acquaintance.
Millennials want an authentic connection to those who share their experiences, and you should recognize this and act upon it. Advertising needs to be seen as intimate and authentic, not pushy, sales-y, or bound up in an ulterior motive. If that line is crossed and the effort shows, you risk presenting yourself as pandering, try-hard, and out-of-touch. “How do you do, fellow kids?”
So, how can a brand best position itself in the Millennial world? Recognize the concerns of Gen Y; their budgets and where they get their recommendations. Most importantly, represent the aspirations of your best consumer: be cooler, greener, more resilient, and more optimistic.
The age of the Millennial has arrived. Go get ‘em.