If you think centennials are the new millennials, think again.
Centennials, or consumers under the age of 23, are as digitally savvy as their older counterparts. However, the shopping preferences of centennials and millennials vary significantly.
According to a Yes Lifecycle Marketing study, centennials value quality over price, prefer YouTube and Instagram, and crave unique in-store experiences. All of these traits are at odds with the hallmarks of millennials, a generation known for its passion for Facebook and inclination to shop online, particularly on Amazon.com.
A short history lesson provides insight into the divergent buying behaviors of these seemingly similar generations. Centennials are more likely to embrace emerging social channels because they came of age fully immersed in technology. What’s more, centennials are too young to have experienced the impact of the Great Recession, which might explain their lack of concern for cost savings. Millennials, on the other hand, bore the brunt of the damage during and after college.
Additionally, life stage plays into the shopping behaviors associated with each generation. As millennials start families, they value cost savings and convenience more so than their younger cohorts.
It’s important for marketers to understand the preferences of consumers from all generations; it’s especially important to understand centennials, since their spending power is likely to skyrocket in the next few years. Research shows that by 2020, centennials will account for nearly 40 percent of all consumers, and will influence about $4 billion in discretionary spending.
To reach centennials, marketers must understand their needs and develop strategies to communicate with them on their terms.
Quality Over Price
Unlike previous generations, centennials value quality over price. More than half of centennials (57 percent) say quality drives their loyalty to a brand more than any other factor, even price (55 percent). Furthermore, 50 percent of shoppers in this age group say they based their last purchase decision on product quality, compared to a 41 percent of shoppers from older generations.
To resonate with centennials, your messaging should focus on product quality and worth rather than cost savings. However, the catch is that you can’t simply tell them how great your products are. You have to show them. Centennials are inherently skeptical of marketing — 43 percent of them don’t trust long-established brands, and 81 percent say they don’t admire something simply because it has a mass following.
Testimonials and user-generated content are great ways to showcase quality to shoppers of this age group in a more authentic way. Incorporate real customer voices in your email, web and social content to win the trust of this hard-to-please group of consumers. Influencer marketing can also be an extremely useful tool to overcoming these pre-determined biases.
Social Media is King
Shoppers under the age of 23 prefer to interact with brands on social media, more so than their older counterparts. In fact, 81 percent of centennials say social media influences their shopping, compared to 74 percent of millennials, 58 percent of Generation X shoppers and 41 percent of baby boomers.
Instagram and YouTube are the most important social platforms for centennials. Nearly half of centennial shoppers (44 percent) say Instagram influences their purchase decisions, compared to a 14 percent average among older shoppers. Similarly, 32 percent of centennials say the same about YouTube (double the average of older generations). Snapchat ranked third among this age group at 21 percent.
Although social media plays a crucial role in centennials’ shopping habits, you won’t reach them with a blanket social strategy across all platforms. Focus on a combination of channels that are best for your audience, and tailor your strategies for each channel. For example, on YouTube aim to secure partnerships with popular YouTube personalities like fashion vlogger Sophia Esperanza. And on Instagram and Snapchat, focus on short, entertaining videos and images that showcase your brand identity.
In-Store Experiences Matter
While shoppers across all generations find brick-and-mortar stores important, centennials are most likely to search for unique in-store experiences. Despite Amazon’s low prices and wide product selection, 31 percent of centennials avoid the retail giant because they enjoy in-store shopping experiences. Another 4 percent say an exciting in-store experience influenced their most recent purchase, which is more than double the average across all other generations.
One way to draw centennials (and their wallets) to your physical locations is by differentiating your interior space. Aesthetically pleasing interior designs (e.g., murals, unique wallpaper or other decor) can capture the attention of this Instagram-crazed generation, along with brands that resonate and draw them in. Retailers can encourage social-savvy shoppers to tag their stores in their posts to generate word-of-mouth marketing. Determining how technology can enhance the in-store experience will be a key win with centennials.
Retailers can also host local events or offer additional in-store services to excite centennial shoppers. Ulta, for example, provides hair and makeup services in its retail locations. And select Nike stores host yoga, offer in-store product personalization, and allow shoppers to test products on indoor tracks and basketball courts. Urban Outfitters even purchased a pizza chain in an effort to revamp its in-store experience.
Centennials may be mobile enthusiasts like the millennials that came before them, but outside of that they're paving their own way. Centennials are coming of age with significantly different preferences than their older counterparts, and marketers must adapt their strategies accordingly to capture this valuable generation’s attention and wallet. Adapt strategies accordingly and remain open to new social platforms that are likely to emerge targeted to this generation to maximize success.
Erin Gade is a marketing strategist at Yes Lifecycle Marketing, a provider of email and cross-channel marketing solutions.