Millennials are the largest consumer demographic in the United States today, including approximately 77 million individuals. Making up nearly a quarter of the population, it is important to understand millennial consumer behavior and millennial consumer trends. It is vital to understand these behaviors and trends for any business to survive and thrive. Fortunately, once this information is obtained, companies can develop specific millennial marketing plans and strategies to help grow their businesses. By looking at research studies we can observe and note that millennial consumers are very different from previous generations.
Getting to Know More about Millennial Consumer Behavior
Common millennial consumer behaviors result from the time frame in which they were born, coupled with major global events at that time. This unique combination is different from other generations because of how easily accessible information became with the advancement of technology. It is with this constant stream of up to date information, from a large variety of sources, many millennials’ worldviews have been negatively affected. Millennials do not have specific dates of when they were born, but most agree that they were born somewhere between 1980 and 2000. Many people make the assumption that anyone born after 1980 is a millennial, but that is not necessarily the case. Technically, anyone born after 2000 would be part of Generation Z. “Millennial” is not a blanket term for young people and exclusively accounts for the people born in that time frame from 1980 to 2000.
It’s not surprising to know, that the massive increase of new technology and the advancement of the internet has provided Millennials with a unique global viewpoint, quite different than that other generations. As new technology grows essential to the lifestyle of this generation, millennials are more reliant on technology than any of the previous generations. Many would agree that millennials always have their face in their cell phones because of their increased social media use.
Millennials are currently the most educated generation. This increased time spent in the classroom has a direct impact on millennial consumer behavior and heavily impacts millennial consumer trends. As more of the baby boomer workforce retire, more and more of these ambitious and well-educated millennials are taking up managerial positions. These changes allow millennials to step into jobs that provide better financially, opening up opportunities once considered out-of-reach.
The millennial generation includes some of the most well-connected people on the planet. The widespread use of smartphones provides millennials with a mobile platform to shop, communicate, and find information in seconds. Millennial consumer behavior shows that millennials, like older generations, prefer brick and mortar storefronts over online shopping. Shoppers have stated that, “You want to touch it, you want to smell it; you want to pick it up.” This is used in conjunction with online shopping in a term called “Showrooming”. Showrooming is where you examine goods in a retail store and then look for the desired item online to find the best deal, sometimes ordering from the stores own website, which often offers cheaper prices and discounts. These shipping techniques are made even easier with the abundance of smartphone technology, so anyone can search the internet while in the store itself. Millennials have a lot of buying power thanks to these changes; they spend $600 million shopping each year in America and are expected to have a total worldwide spending power of over 3.39 trillion in 2018. With this in mind, companies are hard pressed to make millennial marketing strategies that work.
During their lives, millennials also have seen many unfortunate events occurring in the world; the attacks on 9/11, the Great Recession, the housing market crash, also the war on terror and other global conflicts. Millennials are therefore more pragmatic overall, and sometimes have a pessimistic view of the world. Negative stereotypes state that millennials are spoiled and want praise for the most insignificant accomplishments. This is not the case, as these are just stereotypes from older generations. Many forget that millennials were the children being given these participation awards although they never asked for them and these awards are just one example of the many misconceptions about the millennial generation.
Most millennials are very hard-working and diligent and try to find new and innovative ways to solve problems. Because they were raised to practice group participation, they listen and share ideas better and faster than other generations. Millennials also use these skills to solve problems more easily.
Unfortunately, the combination of the recession and increases in college tuition forced many millennials graduating from high school and college to accept jobs with a lower rate of pay, if they could even find a job at all. This caused many of these millennials to take jobs they were overqualified for and the financial consequences forced many to move back to their childhood homes as a result. The increase in housing and school costs has continued to increase drastically in the last 30 years while the wages have not kept up. These specific economic challenges have had a big impact on millennial consumer behavior and millennial consumer trends.
Why it’s Important to Understand Millennial Consumer Trends
As stated before, the differences between previous generations and millennial consumer behavior stem from the negative views held by many millennials. This view has caused many millennials to place more value on experiences rather than objects, or on things that make them feel better about themselves than just the item itself.
Millennial consumer trends show that half of millennials will spend their money on experiences over material things. A great move for millennial marketing, which many companies are already capitalizing on, is to try experimental marketing strategies. Some such strategies allow millennials to physically interact with brands and other consumers at special sponsored events. Other companies are sponsoring event meetups in cities and even in virtual reality, where millennials are more than happy to pay to try some new and unique experiences.
Surveys show that 60% of millennials prefer to make purchases that they feel are ways to express their personalities. If a brand can speak to a millennial on this level, then it can create a connection with that consumer. Forming a connection will make millennials feel better about making purchases from that brand more easily. Millennial consumer behavior shows that they value their money and products more if and when they meet both an emotional need and also make logistical sense. This differs from the views of baby boomers and Gen Xers, who buy based more on quantifiable needs. Companies like Tom’s Shoes have mastered this with their “buy one, give one” marketing promotions, in which for every pair of shoes purchased they donate a pair of shoes to people in need. Millennials feel it is important to make the consumer feel good about their choices when making their purchases, while also helping others at the same time. All millennial marketing strategies can and should take into account the consumer’s feelings when making a purchase to maximize their effectiveness.
While looking at millennial marketing, companies need to be aware of how millennials are using social media. Millennials are 13% more likely to share purchases on social media then Gen Xers are. This millennial consumer trend works in much the same way as a product review, allowing others to hear opinions and experiences both good and bad. With this in mind, companies need to actively engage with consumers on social media and list to what is being said and address any issues that may be brought up.
Technology changes more and more every day, and we are seeing advancements in computers, cell phones and other smart devices every few months. It is important to realize that these new technologies are going to be used by millennials and are targeted towards them. When devising a millennial marketing strategy, it must be understood that much of this technology will be bringing new trends with them to market. An example of one such trend is that many modern-day devices already use voice assistant technology. It is strongly believed that we will be able to interact with just body language, intonation, touch or just gestures like we do with people in newer smart devices. These new interactive features could be implemented in as little as 3 years. Many smart devices already adopted these features, from smart fridges and microwaves to, smart home security systems. Soon we may be able to have the doors lock and unlock automatically, turn alarm systems off and on using just from a wave of the hand.
According to Forbes, an important millennial marketing point is that millennials prefer ads and social media posts that are relevant to them. It is important for brands and companies to remember that millennials strive for this relevance and personalization in their products. A company needs to incorporate research on how their brand connects with its target market as part of any millennial marketing strategy. To that end, over one-third of millennials will wait to try a product or service until it is used by someone they trust has tried it first. Millennial consumer behavior relies heavily on word of mouth and many ignore corporate recommendations that are not targeting them individually. This makes it an integral in any millennial marketing strategy to incorporate practices that can help build trust amongst its consumers. This can be done by realizing critical millennial consumer behavior, keeping in mind that millennials love trying new and innovative brands. Don’t view a millennial marketing strategy as a way to win customers from your competitors, instead you must think about how to meet a customer’s needs, continue to concentrate on connecting with your customers and giving them a reason to come back. Brand loyalty amongst millennials is relatively low, therefore building trust and making a connection is the best way to make a happy more loyal customer.
It’s proven that millennials expect more from their companies and brands than older generations. They want companies to treat both their employees and their customers well. A 2017 study shows that one third of consumers buy brands based on their social and environmental impact. This belief in a company’s responsibilities to the planet, its employees, and its customers, is a newer expectation that is an important one for millennials. It is important for a company to maintain an open dialog with its customers and employees, while showing a willingness to cater to the needs and desires of them. In order to make the most of millennials generation consumers, millennial marketing strategies need to become more targeted and innovated to match them. The sheer number of customers that a company can lose by ignoring or offending millennials is staggering, so plan accordingly and remember that millennials are the future and aren’t going anywhere for a very long time.