10 New Findings About the Millennial Consumer

10 New Findings About the Millennial Consumer Today, millennials make up one of the largest living generation. According to Goldman Sachs, there are 92 million millennials (people born between 1980 and 2000) in the United States.It is estimated that this year, millennials will outnumber the baby boomers generation, making them the largest living generation.Aside from being the largest generation, more and more millennials are getting into their prime earning and spending years (estimates show that millennials in the US will have a purchasing power of over $1.4 trillion by 2020), and it is no wonder that majority of the conversations around marketing, product strategy and customer experience are centered on millennials.In addition, millennials are the current trendsetters across various industries, from food to fashion and travel, and they wield a lot of influence over the older generations (baby boomers and generation Xers).Any company that wants to remain in business must fiercely fight for a piece of the millennial pie.However , there is one huge problem.The shopping and buying habits of millennials are totally different from those of past generations.If you want to successfully market to millennials, you need to have a good understanding of their buying processes.Only then can you effectively cater to their needs.In today’s article, we are going to take a look at 10 things that define the millennial consumer. These are: MILLENNIALS ARE NOT INFLUENCED BY ADVERTISINGTraditional advertising does not seem to work on millennials. It’s not that millennials are not buying things â€" they are. What has changed is their buying process.According to a study conducted by the McCarthy Group, more than 80% of millennials do not like or trust traditional advertising. They believe that it is mere spin that is only meant to get them to purchase, even if it is not authentic.Even worse, if you are relying on traditional advertising, your message might not be even be getting to millennials.Millennials have ditched tradi tional media such as TV, radio and newspapers in favor of streaming services like YouTube, video-on-demand platforms such as Netflix, podcasts, and social media.This further makes traditional advertising less effective to millennials. A study conducted by comScore found that the effectiveness of TV ads increases with age, with millennials being the least affected by TV ads. The effectiveness of TV ads with age. Source: RevinateSo, what should companies do instead?When figuring out what to buy or where to buy it, millennials rely on the advice of friends rather than advertisements.They seek the opinions of other people who have used the products before in a digital version of word of mouth.Millennials also don’t mind viewing ads from their favorite digital personalities.This means that businesses that want to effectively reach millennials should focus on alternative means of marketing their products, such as influencer and micro-influencer advertising.MILLENNIALS WOULD RATHER BUY A CAR AND LEASE A HOUSE Source: Goldman SachsFor the baby boomers, buying a home was a major financial milestone.Without a home to call their own, many baby boomers felt that they had not achieved much in their lives. Millennials are turning this perspective on its head.According to a survey carried out by millennial branding in conjunction with Elite Daily, 59% of millennials would rather lease a house than purchase one. At the same time, 71% prefer buying a car to leasing one.Millennials’ aversion to buying homes can be attributed to a number of things. First, millennials are the most educated generation, therefore they are saddled with greater student loan debt than any other generation.Second, they came of age at a time when there was a restricted labor market and increased unemployment, which means they earn less compared to previous generations, even though the cost of living has been steadily increasing.At the same time, the effects of the 2008 financial recession made the qualifications for mortga ges stricter.Saddled with student loan debt in a restricted job market, it is almost impossible for majority of millennials to meet the increasingly stricter qualifications of securing a mortgage.In addition, millennials are getting married and starting families much later in life. According to a poll conducted by Gallup, while millennials still have marriage and family as one of their goals, they do not give it the immediacy of previous generations. They want to figure out what they want out of life first before settling down.All these factors contribute to millennials put off buying a house until much later in life. On the other hand, renting a house is a great and convenient option for them.Renting is affordable, it allows them to live wherever they want and leave as they please (it does not tie them to one place), and most of the effort and costs that come with maintaining a house are left to the landlord.At the same time, millennials are choosing to buy cars because cars are wa y cheaper than houses and makes it possible for them to move around conveniently.MILLENNIALS CONSULT BLOGS BEFORE MAKING A PURCHASEMillennials grew up at a time when there was better access to information than ever before. Instead of relying on advertisements to decide whether a product is worth buying, they use a myriad of ways to research the product and make sure they are getting the best price before buying.They will check out reviews of your products by bloggers to make sure they won’t regret making the purchase.According to a survey by Go Banking Rates, 23% of millennials say that they like researching a product before making the purchase decision.The fact that they are constantly connected to the internet through their smartphones also means that they will go online to research the product and compare prices even when they are standing in the store, something known as showrooming.As a marketer, you can take advantage of this by embracing content marketing. This is where you produce lots of engaging and valuable content about your products and services in a manner that does not come across as advertising.In other words, you should provide lots of free but useful content that shows that you are capable of solving their problems, but without pushing for a hard sell.In addition, you can partner with bloggers within your field to review your products from a user’s perspective.MILLENNIALS VALUE AUTHENTICITY OVER CONTENTMarketing to baby boomers often required infomercial like advertisements, inflated claims about a products features or benefits and wowing them with cool images or videos.However, this doesn’t cut it when it comes to millennials.They are not moved by flashy advertisements or huge promises.They can see right through that. Instead, they want brands to keep everything authentic â€" their messages, customer interactions, everything.And here is the thing about authenticity â€" it cannot be faked. If you try faking it, they will see right throu gh you and abandon your brand.Just how important is authenticity? Well, according to a survey by Stackla, 90% of millennials claimed that brand authenticity is important to them. 30% of the millennials claimed that they had stopped following a brand on social media because they felt the brand was not authentic.The worst part is that once consumers start perceiving your brand as inauthentic, they are not going to trust anything coming from your brand, be that your products or your content.The best way of dealing with this is to embrace user-generated content. Content about your brand that is posted by your followers and customers is perceived to be authentic and genuine because these people have nothing to gain from it. In other words, they have no incentive for lying.Brands should also do away with celebrity influencer marketing, because it also screams inauthenticity. For instance, consider a situation where a smartphone brand hires to renowned musician to market their latest phone .Millennials know that the musician does not give a hoot about that particular smartphone brand. The celebrity probably even use a different phone themselves. Millennials are unlikely to trust such kind of advertising.However, micro-influencer advertising can be effective in this case. This is where the brand approaches someone with a decent following on social media (rather than a celebrity) and who is known for their interest in that niche.For instance, in the above example, the smartphone brand might make their message more authentic by working with popular tech bloggers than a popular musician.FUTURE INHERITANCE WON’T CHANGE MILLENNIALS’ PURCHASING BEHAVIORThe baby boomers generation (parents to millennials) have started retiring and passing over their wealth to their millennial children.In the coming years, a large portion of millennials will receive large sums of money from their parents.A survey by Accenture estimates that about $30 trillion will be transferred to millenn ials in a few years’ time, increasing the purchasing power of millennials even further.Majority of businesses expect that millennials will increase their spending once this massive wealth comes under their control.However, this transfer of wealth might not have a huge impact on the spending habits of millennials.According to the same survey, 57% of millennials claimed that they are unlikely to change their spending habits and buying behavior even after they receive their inheritances.MILLENNIALS WANT BRANDS TO ENGAGE THEM ON SOCIAL PLATFORMSTraditionally, business was a one way interaction.The business determined the products to be sold, the messaging used to sell the products, the ads to be used and so on.Customers played a very passive role in the grand scheme of things.All they did was to receive what came from the business, without much choice when it came to providing feedback to the business.Then came social platforms and all that changed. Social platforms provided customers with a voice to let businesses know what they thought about products, advertisements, and so on.Millennials no longer want to be passive participants in business interactions. They want to be active participants. They want businesses to talk to them, listen to them and form relationships with them.As the first generation to be completely digital native, millennials have gotten accustomed to using social platforms for almost everything â€" from keeping up with the lives of friends, to getting in touch with childhood friends, finding love, buying and selling products, championing for political causes, looking for rental houses, job hunting, you name it.It therefore follows that they would also use social platforms as a platform for engaging with brands.In the past, some businesses might not have paid much attention to social media.As millennials become the largest generation and get into their prime spending years, your brand cannot afford to ignore social media, unless it does not w ant to survive.MILLENNIALS WANT TO CO-CREATE PRODUCTS WITH COMPANIESThis is more of a continuation of the previous point. Traditionally, companies came up with products and brought them to market with the hope that customers would buy the products.This placed the customers in a passive position. They had no choice or say in the products available. If they didn’t like a product, the most they could do is to find an alternative product.Millennials, however, do not want to take the passenger’s seat at the back. They want to take the co-driver’s seat and help with the navigation. They want to be part of the action, rather than spectators.According to a survey carried out by Edelman, over 40% of millennials from all over the world want to be able to influence the products of their favorite brands.It is good to note that co-creation in this sense does not simply mean providing feedback for existing products.It means they want to be able to share new product ideas and ways of making products even better. What’s more, they want the assurance that their input will actually be listened to.In other words, they want to become an integral part of the product development process.Fortunately, the fact that millennials want to be co-creators is a good thing for brands. According to research from Cognizant, brands are more likely to produce high performing products when they directly involve customers in their innovation processes.Not only does this route lead to increased innovation, but the brand is also assured that the new products are tailored to the exact needs and preferences of its customers.MILLENNIALS ARE USING MULTIPLE TECH DEVICESAs digital natives, millennials are comfortable with all kinds of tech devices, and majority actually use two or more tech devices every single day.According to a millennial consumer study by Millennial Branding, almost 90% of millennials use to or three devices every single day.While millennials are likely to have multiple devices , they type of devices and gadgets is also changing. For instance, compared to older generations, millennials are the least likely to own a TV, and even less likely to have a cable subscription.Instead, they prefer consuming their media through computers, tablets and smartphones. Even for those who have TV sets, they mostly use them with on-demand subscription services like Hulu and Netflix, or with video game consoles.This shows that while millennials are consuming more media than previous generations, they are doing it in a completely different way from older generations.Any business that wants to appeal to millennials must meet them where they feel most comfortable â€" on digital platforms.This means marketing to them on digital platforms and providing a digital buying experience.However, the fact that they use multiple tech gadgets means that business cannot rely on only one platform.Millennials want the convenience of interacting with brands on whatever platform makes most sens e to them at the moment, and brands therefore need to provide a seamless experience across multiple platforms.For instance, instead of simply having a website, a brand should have a website that is optimized for both PC and mobile, as well as a mobile app.Millennials are also likely to jump on any new trend that comes up, and therefore brands also need to be able to quickly adapt to and engage millennials on new platforms as they are released.MILLENNIALS ARE LOYAL TO BRANDSIf you ask most people, they will tell you that millennials have the least brand loyalty. However, countless surveys conducted on millennials show otherwise.Actually, more than half of millennials claim that they very loyal to brands that they purchase from currently.With so many brands to choose from, and with all these choices just a click away, you might be wondering how millennials can be so loyal.One of the major factors that is contributing to high levels of brand loyalty among millennials is social proof.So cial proof is a psychological concept that puts forth the argument that the behavior of humans will be influenced to a great deal by the behavior of people around them.This phenomenon was first observed in the real world, but like many other psychological concepts, it has manifested itself in the virtual world as well. Since most millennials rely on social media to research products before buying, they have more information about what people close to them â€" friends, family, relatives, and acquaintances are buying.As a result, they are more likely to buy from the same brands that their close networks are buying from and remain loyal to these brands. This shows how important social media is when it comes to selling to millennials.At the same time, it is good to note that brand loyalty does not come that easy to millennials. Baby boomers remained loyal to brands because their parents bought from the same brands.Millennials, on the other hand, are only loyal to brands if they feel the brands are treating them right. They want to feel that they are valued as a customer, and they want a shopping experience that is tailored to their unique needs and wants.One way for brands to increase the loyalty of millennials is to offer loyalty programs.Unlike the tried and tested loyalty programs where customers who are loyal to the brand receive discounts, loyalty programs meant for millennials should put more focus on experience.For instance, loyal customers could receive perks such as early access to new products, early access to offers and discounts, free shipping, and so on. Such a loyalty program builds an emotional connection between the customer and the brand, which is critical if you want to cultivate loyalty from your millennial customers.MILLENNIALS EXPECT BRANDS TO GIVE BACK TO SOCIETYLike I mentioned earlier, millennials came of age at a time when things are not at their best.They are knee deep in student loans, the job markets are sluggish, the cost of living is steadily rising, and so on. This leaves majority of millennials strapped for cash.They cannot afford to make charity donations to causes they support like their baby boomer parents were able to. At the same time, they still want to feel like they are involved in something that helps make the world a better place.Under such circumstances, millennials are choosing to make the world a better place by patronizing and working for brands that value giving back to society as part of their mission.According to Nielsen’s 2015 Global Corporate Sustainability Report, 66% of those who took part in the survey (all generations) reported that they had no problem paying extra for a brand that was more socially conscious.At the same time, 73% of millennials reported the same thing. However, millennials don’t simply want brands with CSR as part of their mission. They want to patronize brands that actually follow through on this mission.WRAPPING UPMillennials will soon be the biggest living genera tion, the generation with the biggest influence and the generation with the strongest purchasing power.This means that any business that wants to thrive today and in the coming years (until generation Zero take over) needs to market itself to millennials.At the same time, the purchasing behaviors of millennial consumers are very different from those of the generations that came before them.If you want to effectively market to millennials, you have to understand what makes them different from previous generations.After reading this article, I hope you have gained some useful insights to help you understand the millennial consumer and how to market to them.