Why the millennial customer matters

As a result, they come armed with more information than the consumers who preceded them, are more likely to research online and more willing to review a business via social media.

Why the millennial customer matters

Now entering the prime of their consumer lives, the millennial customer is far different to the generations who have come before them.

Socially aware, digitally savvy, and entering their earning prime, the millennial consumer is the economic powerhouse of the present, and it would be remiss of any business to underestimate their patronage power. Here’s an insight into what millennials are looking for and why they matter.

Who are the millennials?

Currently aged from 20 – 36, the millennial generation is the last of the 20^th century and the first of the truly digital era. Unlike any before them they have grown up with computers, the internet and mobile technology in their DNA.

This is the generation responsible for Facebook, instantly recognisable on Instagram and conversant in Twitter, with their iPhone fixed firmly in their hands.

As a result, they come armed with more information than the consumers who preceded them, are more likely to research online and more willing to review a business via social media.

They are now also entering the pinnacle of their careers pushing out the Gen Xers as the rising stars of the professional realm. And they’re an exceptionally educated group.

The Nielsen Millennial Report 2017 indicates Millennials now comprise 29% of Australia’s population, have an average personal income of $71,000, and 40% of millennials are young families. Almost a third (31%) hold a bachelor’s degree, and one in five speak a second language although 80% were born here in Australia.

Just under half of the millennial population are in white collar occupations, with 17% being classed as professionals.

“They are success-driven, working overtime and studying to help advance their career. More than half (56%) feel they are time-poor and can’t get everything done,” The Millennial Report notes.

Digitally savvy

Known as the “connected generation”, the millennials are more conversant with technology than any generation preceding them.

They have witnessed the mainstream rollout of the internet, the dawn of the smart phone and the genesis of the iPad.

Privy to the beginnings of social media, and quick to experiment with its new platforms, millennials are a virtually connected bunch.

Over 65% of this generation uses social media to connect with others.

“They’re less concerned with privacy and security in comparison to their parents and have less reservations sharing personal information online. For them, fear of missing out (FOMO) is a real thing, with 36% feeling out of touch if they can’t check their networks. They’re most likely to be on Facebook, Youtube and Instagram and are more connected than any other generation,” the Millennial Report continues.

In the social media stakes, they log on, upload and update via the following channels:

Nine out of 10 millennials have a smartphone and they use it in a variety of ways – checking into social media, taking photographs, streaming TV and researching the products they intend to buy.

That’s not the only connected device they harbour in their homes, either. On average older millennials have eight connected devices in the home, while younger millennials have 11.

Socially aware

With access to information at their fingertips and with some hard knocks already under their belt, millennials are seeking more in return than the generations before them.

They witnessed the global financial crisis first-hand, have had a prime seat in a changing world order and it’s shifted their view of the commercial game.

This generation now sees altruism as an intrinsic part of their spare time, workplace and consumer habits.

The Deloitte Millennial Survey 2017 found 76% of millennials view business as a force for positive change. As a result, they’re more likely to patronise socially-committed business and actively seek to work for them.

The Huffington Post explains: “A study from the Stanford Graduate School of Business revealed that 90% of MBAs from business schools in Europe and North America prefer working for organisations committed to social responsibility. Ethics and integrity, it seems, win out over financial reward.”

And their social awareness creeps into almost every facet of their lives, from the places they choose to work, to the brands they loyally follow and the information they share on social media, as Forbes further illustrates.

“As a whole, millennials tend to be generous with their time, money and influence. They freely use their social media platforms to raise awareness and money for causes important to them.”

Surprisingly loyal

Many a millennial myth has abounded in recent years, but one that stands out is their reputation for being fickle and flighty. On the contrary, millennials are a remarkably loyal group – but you have to engage them first.

Deloitte notes this generation of employees feels their financial prospects and future wellbeing are less certain than generations of the past, and they’re prepared to step up and put in the hard yards as a result. They’re looking for fulltime positions and prepared to stay longer with companies who meet their needs.

Deloitte found 31% anticipate they will stay in their current position beyond five years. Conversely, only 38% indicated they would leave within two years, and only 7% noted they would “leave soon” – a reduction of 10% on 2016.

This loyalty also translates to brands, with Inc reporting a series of studies found millennials were the most loyal generation to date. According to studies they cite, just over half (50.5%) indicate they are extremely loyal or quite loyal to their favorite brands.

More thrifty than first thought

In Australia, millennials make up 4.2 million of the population and they have a combined disposable income of $530 million per year, but if you think they’re wantonly wasting that hard-earned cash, think again.

Nielsen notes: “While almost 25% do believe they are usually the trend setter in their friends’ circle, six in 10 say they’d hold out on buying something until it goes on sale”.

The further explain: Millennials “make fewer shopping trips per year than their older counterparts and spend less – $48 versus $58 per trip for Generation X (37-46).

“Millennials, however, do spend more than other generations in pharmacies and, when they do shop millennials spend more on baby food and less on ice cream in comparison to Generation X and Boomers, demonstrating their likelihood to be young families who are health conscious.”

And this expenditure is just a drop in the ocean of what’s expected to occur over the coming years as millennials move up into better paid positions and become further entrenched as the primary consumers.

“Today millennials are worth 7% of the retail market; however, Nielsen predicts that by 2021 their share will jump to 17%. This means that over the next five years millennials will account for a growth of $6.1 billion within retail, demonstrating the immense buying power this generation will hold in the future.”

Targeting the millennial consumer

The millennial is far from an average consumer, requiring far from an average approach in terms of engagement and marketing.

This generation is more about the ethos behind the brand than it is about the product, and it seeks to ascertain this information in new and varied ways.

More likely to rely on the recommendations of friends than simply buy into marketing, the millennials need to be courted with values rather than just price point or product.

Brand targeting them need to embrace social commitment and tell it as part of their story, and they can’t just share this news in traditional advertising. Social media is a major drawcard in any strategy targeting millennials and it should be information that varied to incorporate brand ambassadors, video, images and blogs.

Meanwhile, brands need to ensure the consumer experience (hyperlink to consumer experience article) lives up to consumer expectations to lock in those essential recommendations amongst peers.

Make no mistake the millennial generation is an emerging and increasing slice of any business pie. Underestimating them, failing to accommodate their needs or ignoring their preferences is an error no company can afford to make.

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