Millennials are the world’s most powerful consumers: Now, what do they want?
The world’s two billion millennials have come of age.
They are no longer merely the largest demographic in the world – they are also the largest consumer group. Morgan Stanley refers to them as “the most important age range for economic activity.” Brands can’t afford to ignore them.
But who are “millennials” exactly? What do they value? And what experiential and in-store marketing strategies can brands employ to appeal to this vast consumer group?
Who are millennials?
Broadly speaking, most research centres and think tanks see millennials as anyone born between 1981 and 1996. Not that it’s quite that simple. The Wall Street Journal, for instance, have them pegged between 1980 and 2000. President of the Pew Research Center, Michael Dimock, rightly said, “cutoff points aren’t an exact science.” But precise dates are not the only bone of contention when it comes to defining the generation.
As a demographic, they’re an extremely broad subset, to the point that many have questioned the validity of the term entirely. Depending on your definition, the oldest millennials could be pushing 40, while the youngest are still in their teens. So much changed in this period, from socio-economics to technology, that the age gap between top and bottom seems even wider.
Without doubt, it’s a problematic phrase. No marketer worth their salt would look at someone in their early 20s through the same lens as someone in their mid-30s – such vague boundaries don’t make for effective segmentation and personalisation. That hasn’t stopped people using the term – far from it. The press, in particular, has become addicted to the term – where it seems to have morphed into a catch-all phrase meaning, basically, ‘young people’. And more often than not, the term has snidey, negative connotations – they’re blamed for the death of everything from napkins to sex (and much more besides).
Despite the obvious flaws, however, ‘millennial’ is a helpful term to consider a generation of people, not bound by the usual demographic detail, but more by a set of beliefs and life experience. They’ve grown up surrounded by technology, for example. They’re internet savvy, entrepreneurial; they care about environmentalism. They’ve been hugely impacted by the boom and bust of global finance. They’re renting, not buying; they’re lumbered with debt. They’re settling down at an older age, having fewer children.
These trends are, to reiterate, broad strokes. Where we think the term comes in more useful is thinking about the millennial mindset – a group of consumers that are increasingly experiencing similar socio-economic conditions. The wealth gap between the rich and poor widening, the middle class shrinking, wages stagnating, volatile politics, rising awareness, and concern with social issues – this all feeds into a new mindset that transcends age and into something bigger.
Millennials and the retail experience
So, what about the retail sector? The death of the high street has been widely reported, and while it’s true that many large retailers have run into problems – not least House of Fraser, BHS, and M&S – in some ways this feeds into the dwindling middle ground that’s become a feature of modern society. All those brands – and you can add to that Toys ‘R’ Us, Mothercare, Maplin and plenty of others – sit firmly in the centre.
In March 2018, Deloitte pointed to this disparity in what they called ‘The great retail bifurcation’. Their 12-month study revealed a renaissance in retail, not the apocalypse many have suggested. And while the report is US-focused, it’s difficult to argue that the trends are much different from the rest of the Western world.
The facts are stark.
Brands at the lower end of the spectrum compete on price – it’s where your Walmarts, Targets, Lidls and Asdas sit – all of whom are raking in profit. At the higher end are the brands which play on luxury. In food suppliers, that could be someone like Fortnum and Mason who recorded a fifth consecutive year of double-digit growth in 2017. Despite the disparity in cost, brands at both ends are embracing similar consumer trends. Provenance and environmental credentials are two.
Lidl’s environmental policy says: “We believe that the efficiency and leanness of the discounter model naturally helps to drive sustainability, bringing greater control to our consolidated supply chains and driving the efficient use of resource”.
Kering – the international luxury group that owns Gucci, Yves Saint Laurent, Balenciaga and Alexander McQueen (among others) states that “we will CARE about our impact on the planet, on climate change, on natural resources; COLLABORATE for the good of our employees, suppliers, clients; CREATE pioneering ideas to safeguard our rich heritage, and empower future generations”.
The two brands, despite obvious differences, are difficult to tell apart when it comes to environmentalism. Why? Well, ‘millennials’ believe that global warming is the world’s biggest problem, they say sustainability is a shopping priority, and they buy products they believe are eco-friendly.
Simply, the demands of consumers are being met by brands. And don’t forget, millennials aren’t merely the largest consumer group, they’re also taking over the workforce, too. Brands focus on sustainability not just as a result of external pressures, but internal ones, too.
One caveat about environmental thinking: belief is one thing; behaviour is another. Yossi Sheffi, the Director of MIT’s Center for Transportation and Logistics and author of Balancing Green: When to Embrace Sustainability in a Business (and When Not To), found that while people say they want brands with sustainable chops, we don’t tend to put our money where our mouths are. Sheffi writes: “Although a number of surveys show that most consumers say they want sustainable products, sales data show that only a small percentage are actually willing to pay more to buy sustainable products.”
However, attitudes are changing. And the millennial mindset is the catalyst. Baby boomers, for instance, are investing far more heavily in Environmental, Social and Governance (ESG) investments, more people of all ages are volunteering than ever, brands, as we’ve seen, are placing sustainability at their hearts.
Perhaps one of the most interesting millennial trends is that of the local, artisan, craft and independent stores. The high street has diverged, and out of that has sprung, according to The Telegraph, a group of thriving independent retailers.
So how are these brands making a go of it in such a tough climate? Personalised experiences are one area the article highlights, and certainly something large brands have similarly focused on with their marketing efforts.
Accenture surveyed 6,000 consumers, 1,707 of whom were millennials. Their studies showed that new consumers want a cohesive brand experience between online and offline. Contrary to popular belief, this didn’t mean eschewing brick-and-mortar stores entirely, more that the experience had to be complementary. One respondent claims that “[Y]ou want to see it; you want to touch it; you want to smell it; you want to pick it up”.
RetailMeNot CMO Marissa Tarleton agrees, and recommends that retailers capitalise on their stores as a “benefit,” incorporating personalised experiences. She adds that brands need to ramp up their mobile marketing efforts “quickly”.
The second element of success The Telegraph pointed to was community engagement. These independent stores have been particularly proactive in their local areas, and big brands, too, have been similarly proactive, albeit harnessing a much wider community. From Coca-Cola’s public policy on engagement to XBox Ambassadors to Sephora’s Beauty Insider Community, brands are latching on to the power of the group.
The final, and most interesting, point (for us at least), is in-store spectacles. Emma Woodward, quoted in The Telegraph piece, is the co-founder of Aspire Style. The first store opened in Warwick over 10 years ago, and the brand now has shops in Oxford, Solihull, Stratford and Coventry. How are her stores thriving? “Providing an element of entertainment and in-store theatre is key”, she says. “We have daytime events that include free refreshments, games and prizes and link to specific things, such as the Royal Wedding”. The store also puts on regular after-hours events, such as fashion shows and live music.
Brands and retailers are increasingly breaking out of the mould of being a transactional space. Experiential marketing is nothing new, of course, but it’s one effective way to break out of the middle ground for top end retailers, independents, lower end stores, and everywhere in between.
How can you bring experiential marketing to millennials?
You can read our 10 key principles for experiential marketing the right way in full, but it’s worth pulling out some of the key points here as they are specifically designed with this savvy consumer in mind.
- Customer first
You might like the experience you have in mind – but does your customer? A firm grasp of the end user – the retailers and consumers – is essential.
- Ideas over technology
Tech is a tool, nothing more. VR, AR, AI, apps and games – they can all be engaging, but not without a creative concept or idea. Wow them with ideas, not with gadgets.
- Engagement is everything
Is your marketing passive or active? Experiential marketing has to be active. You’re not just giving out product or information for the customer to receive. You’re inviting the consumer into your branded world for a part of their day.
- Aftercare isn’t an afterthought
Experiential campaigns lead to an uplift in immediate sales results. But they offer the opportunity to create something longer-lasting. ROI isn’t simply what happens on the day. Experiences can stay with people, building brand equity in the long term.
- Smiles are currency
Do you delight? Does the visitor come away from the experience beaming? They need to. Smiles are a powerful trigger: the physical movement of the face triggers a psychological reaction, and the customer feels happier, lighter, and more engaged with the day.
- Think about impact first: the reach will follow.
Word of mouth referrals are the best form of advertising. 84% of consumers trust recommendations from influencers, friends, family members and peer networks – so make something that people want to recommend.
Brands need to break out the mould of labelling millennials and start thinking about a new consumer with a new way of looking at the world. This purported age group are not that different to everyone else, but in many ways they represent the state of things to come. For consumers, sustainability, provenance, authenticity, community, a sense of fun and experiences that cut through the incessant chatter of the modern digital world are the things that stick in the mind.
The way to break through is with creative thought, impeccable execution and empathy with the people you want to engage.
To find out how we helped other brands cut through, check out some of our case studies here.