Infographic: Calling all millennials
April 1, 2014
by Monica Watrous
NEW YORK – Food manufacturers and marketers better befriend the oversharing, overstimulated, smartphone-obsessed generation that is millennials. According to Nielsen, this 77 million-strong consumer group represents a $200 billion opportunity, and they will hold even more spending power in the coming years.
“Investing in millennials is absolutely the thing to do,” said Beth Brady, president, Segmentation and Local Market Solutions for Nielsen. “They are a huge group of consumers, and they are just going to amass more wealth over the next 10, 20 or so years, so understanding them now and investing now is a very good thing, but it may be a little different than how you would have invested in previous generations.”
Brady made her comments during a March 25 webinar presented by Nielsen entitled “Millennials: Breaking the myths of this no strings attached generation.” She, along with Michael Mancini, vice-president, Thought Leadership for Nielsen, discussed purchasing habits and behaviors driving the dynamic demographic of 19- to 36-year-olds, as well as marketing and product development strategies to engage them.
But the insights come with a caveat.
“Alas, there is no one-size-fits-all strategy for the millennial marketers today because millennials are not all the same,” Mancini said. “While they may be tied together virtually via their Facebook page or historically by the miracle of birth, millennials are as varied as America is itself.”
Winning retail strategies: Millennial consumers crave interaction and celebrate individualism. Retailers should offer personalized deals, create products and offerings that celebrate millennials’ desire to be distinct, and engage in a two-way dialogue, Nielsen said.
This expressive and experiential generation also is more likely to buy handmade or hyperlocal.
“’Made in America’ is no longer enough of a draw the way it was with older generations,” Brady said.
Shopping behaviors: Millennials make fewer shopping trips per week than older generations but spend more per trip (an average of $54, compared with $46 for baby boomers). And despite living paycheck to paycheck, the group may shop impulsively for trendy new products.
“They shop all different stores,” Brady said. “They actually overindex in warehouse clubs and mass merch as well.”
Plugged in: With 72 percent regularly using Facebook, millennials are especially savvy in social media and mobile platforms.
“They are comfortable with tech and trust social media,” Brady said. “In fact, social media is the new consumer report.”
Still, e-commerce remains a fairly small fraction of total retail sales, and millennial consumers are more likely to shop in-store for daily needs while scouting sales on-line for event tickets, clothing and music.
Driven by discounts: Deals account for 31 percent of millennials’ shopping dollars, and the top 20 mobile apps they use are either retail- or discount-focused, led by Amazon Mobile and Groupon.
“Millennials may want the latest and greatest products, but given their smaller paychecks, they need to be savvy and thrifty,” Brady said. “In addition to being smart about their spending, millennials also desire authenticity in their purchases.”
Brand loyalty: Millennials seek brands that share similar values and represent good causes. With three-fourths of millennial consumers donating to non-profits in the past year, the demographic values philanthropy and is more likely to splurge on an item from a socially responsible or environmentally friendly company.
“Millennials do seem to appreciate brands,” Mancini said. “We saw a couple of quotes in there saying, ‘Make me aware of your brand so when I’m ready to go buy, it’s at top of mind, but don’t bombard if I’m not ready to buy.’ Yes, a challenge for the marketer, but… they like brands that are authentic and not just because it’s the most fashionable thing, necessarily.”
Marketing to millennials: Offbeat, sarcastic humor, highly arresting visuals and relatable characters win with this crowd, while passive messages, muted colors and soft music fail to resonate.
“While the older brain has a difficult time processing too much motion and clutter, the younger brain does not,” Brady said. “In fact, they prefer motion, interaction, animation and dynamic communication.”
Even better if a superstar is hocking the product, she added.
“Millennials are more likely to be influenced by artist or celebrity endorsements than older consumers and respond more favorable to advertising that features celebrities,” Brady said. “They are particularly receptive to endorsements by music artists they like.”
Dining behaviors: Twenty percent dine out at least once a week, choosing such chains as McDonald’s, Applebee’s and Chipotle Mexican Grill, according to Nielsen’s research. But when eating out with friends, they typically prefer ethnic or specialty restaurants for a new experience.