Who is a ‘millennial’?
Millennials are an increasingly talked about demographic in research. Their behaviour as consumers has started to affect, and will continue to affect businesses in different ways, but not just in the marketing department. With big businesses such as RSM and Goldman Sachs talking about them, it is clear that this is something which is a significant talking point. As a millennial myself, it is a subject that I have been keen to write a blog about.
For those who are not familiar with the term, the ‘millennial’ generation refers to people who are currently between the ages of 16 and 35, so those born between 1980 and 2000. They have grown up in an era of rapid technological change, globalisation and economic trouble, giving them their own unique set of behaviours and experiences.
What is important to them?
Young people are reported to have different priorities from previous generations. The number of people that choose to go to University has increased; but with the rise of inflation, fees also continue to increase, recently increasing to £9,250 with the forecast that this will rise over £10,000 in the future. Therefore, graduates are coming out of University with higher student debts.
Once they have graduated, on average young people are also earning lower incomes; it has been in the news that there is an increasing ‘intergenerational divide’ in earning potential, based on the calculation that young people will earn £8,000 less during their 20s than previous generations. Coupled with rising living costs, this means many graduates choose to move back home after graduation or rent shared accommodation to save up to buy a house, as house prices are unaffordable.
As young people are putting off marriage and buying a house and tying themselves into a mortgage, this leaves them with more disposable income to spend on other things. This means they are vital consumers for industries such as technology, fashion, entertainment and travel as they would rather spend their money travelling around the world, buying the latest gadgets and socialising with friends.
Young people are also keen to invest in their wellbeing due to greater knowledge of the importance of living an active, healthy lifestyle. We are now more aware of the health risks associated with overeating and not exercising enough, and so growing up with these advancements in medical knowledge means young people are more willing to exercise more, eat better and smoke less than previous generations. This is helped with health apps readily available on smartphones and also the increasing fashion of owning a fitness device such as the Fitbit. Research conducted by Goldman Sachs found that millennials are more willing to spend money on ‘compelling’ wellness brands, as it has become fashionable to wear active wear. Brands are beginning to respond to this new fashion by diversifying and creating their own lines of sporting wear, such as Cath Kidston and Jack Wills who have both launched a new sportswear range recently.
What does this mean for marketers?
Authenticity is key to prosperity online, as young consumers are well-informed so are quick to latch onto anything negative through online reviews or peer recommendations. The customer’s experience needs to be just as important as price and product when putting together a marketing strategy. If a high level of service is expected, this should be rolled out consistently to every customer touchpoint, resulting in a seamless customer experience. Seamlessness is something which has become almost expected when purchasing online, with the ease of being able to purchase almost anything and having it delivered the next day without a hitch. If someone is able to make a quick and easy purchase, it is likely that they will make another purchase in the future.
For brands to succeed at marketing to young people, an online presence is also important. Young people have grown up as ‘digital natives’, constantly connected online on their phones and browsing using different online platforms. This makes them an ideal target for brands. However, the way in which brands reach out to millennials is important. Young people are unlikely to ‘like’ a page on Facebook if it does not have anything to offer. With less money to spend on average, loyalty schemes and vouchers are more appealing so that they get value for money. They have a wide range of knowledge at their fingertips on their smartphones. Often when making a purchasing decision, they are likely to compare the product or seek reviews online before deciding where to buy it from.
For those who have become online retailers, many brands have started to use their online presence to deliver a personalised experience. This is more popular amongst young consumers as it is appealing to be treated as a valued customer. Integration across channels is therefore important here so that there is consistency. This will enable you to have a ‘single conversation’ with young consumers and hopefully offer a better, faster and more memorable experience. However, this should not be limited to young people, as their parents are also becoming more digitally savvy. Consumer uptake of new communications technologies has compressed over the years; it took 30 years for radio, 15 years for mobile phones and social media just 3 and a half years. Those who do not adapt and evolve with these technologies are likely to be left behind in the fast-flowing current of new technology.
In order to create this personalised experience, it is key for you as a marketer to develop a persona of a young person as your target market. A persona is a fictional representation of needs, goals and behaviours. This will help you to understand young consumers better and will ultimately help you to create the solutions to the potential problems they may face.