3 Millennial Myths Retailers Ought to Ignore
For retailers these days battling it out for the attention and wallets of customers online and in-store, millennials are the only game in town. And no wonder. According to the U.S. Census Bureau, the generation born around the turn of the century and defined in the public consciousness by smartphones, social media and selfies, overtook baby boomers in numbers last year.
So, millennials are important, but are they really all that and a bag of chips?
LoyaltyOne Global Solutions dove deeper to learn more about the opportunities this generation holds for retailers in its recent report, Debunking the Millennial Myth: Data Over Demographics. In a recent segmentation of U.S. shoppers, Global Solutions explored the shopper personas that emerge when demographic differences like age and gender are excluded and the focus becomes solely on behavioral data.
We uncovered that, beyond age, millennials are far from one group at all, but a multiplicity of groups with many shopping preferences and attitudes. In fact, when we crunched the numbers, three key myths emerged:
1. Millennials Are Marketers Most Valuable Demographic
While their purchasing power is on the rise, millennials bring in less than a quarter of all income earned, while baby boomers still account for nearly half. And although 2 percent of these up-and-comers have incomes of $100,000 or more, 10 percent of boomers do. In other words, the more lucrative opportunities for retailers still lie with baby boomers and the often-forgotten Generation X.
2. Millennials Have Different Needs and Expectations
Some 71 percent of millennials rely more on their smartphones to shop and research before making a purchase, while only 23 percent of baby boomers do. Half of millennials find the option to shop online very important, while only about one-quarter of boomers feel that way. While modes of communication might vary, both generations appreciate similar experiences when it comes to shopping, seeking out information and convenience.
3. Millennials Are a Cohesive Group
Viewing millennials as like-minded individuals risks missing real differences — in age and life stage. For instance, only 18 percent of younger millennials are employed full time, while 66 percent of older millennials are, impacting the allocation of disposable income, frugality and tech savviness. In other words, they're not all created equal.
What This All Means for Retailers?
So then, how do you reach and build relationships and loyalty with millennials moving forward, while being careful not to ignore others who still have more shopping power? Here are a few suggestions:
- Crack open that old Marketing 101 textbook and reacquaint yourself with how to use data analysis to segment and target consumers as individuals rather than as a group. Plus, look to social media for engagement insights and go even further by appending attitudinal data to get a sharper picture.
- Younger generations like to share with brands, but they get disappointed when the sharing falls on deaf ears. Therefore, after you evaluate and segment your customers, look at the negative space and draft a data capture plan to fill in what's missing. Doing so will help you better meet the expectations of your customers.
- Lastly, re-examine your own customer experience with a lens focused on where you're falling short. Remember, if you have enough cache built with a customer, they'll forgive a long checkout line or a less-than-friendly employee. However, consistent bad service, poorly stocked shelves or dirty restrooms will drive a negative impression you may not be able to overcome, no matter the generation.
Bottom line, the future of retailers’ engagement with millennials shouldn't focus on age, but on a deeper understanding of how they live and shop, as well as on whether you're truly meeting their needs.
Melissa Fruend is a partner at LoyaltyOne Global Solutions, a provider of loyalty programs.