April 2/9, 2018: Volume 33, Issue 21
By Steven Feldman
Whatever and wherever you read, it’s hard to escape the word “millennial.” Retailers across all industries are continuing to increase their focus on selling to this generation, ages 23-37, who are rising in the ranks at work, getting married and having kids. They are playing a significant role in shaping our nation’s economic landscape. While baby boomers still control the lion’s share of disposable income and remain the flooring industry’s best customer today, it would be unwise to turn a blind eye on your most important customer of tomorrow.
When you hear the word millennial, it may call to mind some stereotypes: self-absorbed, foolish with money, not long-term planners or still dependent on their parents. But these stereotypes really don’t hold up, according to a recent Bank of America study titled, Better Money Habits Millennial Report.
As it turns out, millennials are actually just as good, or better, than other generations when it comes to managing money, and they are getting their financial houses in order. Millennials are more likely to set savings goals, and a majority meet them. One in six has at least $100,000 saved in checking and savings accounts, IRAs, 401(k)s and other retirement or investment accounts. Millennials with $15,000 or more in savings jumped to nearly 50% this year in the Bank of America study. Most millennials feel financially secure, yet one in four often worry about money.
At home, millennial parents are very aware of the costs of raising children. Older generations say finances weren’t really a factor in their decision to have kids; millennial parents say the opposite. What’s more, nearly a quarter of older millennials are already saving for their children’s education—quite a feat given that so many may still be paying off their own student loans.
Millennials were somewhere between middle school and just starting their careers during the economic collapse in 2007. And that has had some profound impacts on the way they save. Two-thirds of affluent millennials say they plan to rely on their savings accounts when they retire. Meanwhile, seven in 10 Gen-Xers have been relying on 401(k)s, and the majority of boomers chose to rely on Social Security and pensions.
So, with millennials representing a rising share of the U.S. consumer base, how do you reach them? First, in marketing to millennials, remember they have less disposable income than past generations. They’ve learned how to live well on less, and that makes their shopping habits much different from their predecessors.
The millennial generation knows how to take advantage of technology to get the best quality for the best price. They’re adept at finding discounts, using coupons and getting free shipping.
Branding is important to millennials, but price sometimes overshadows it. Millennials consider options carefully before they’re willing to spend their money. They’re not likely to buy into flashy, self-promotional ads.
Millennials are an entrepreneurial population that takes delight in supporting local businesses. They’ve also been brought up learning about things like global warming and preserving natural resources. Businesses that actively support and promote a greener economy will get millennials’ attention.
Millennials won’t be caught without multiple mobile devices, so marketers need to ensure their ads are “responsive,” meaning they display clearly on all mobile devices. Digital marketers will find greater power in social media because most millennials pull it up before they brush their teeth in the morning.
Again, while the baby boomer is still your most important customer, it’s critical to understand the ins and outs of this generation if you plan on sticking around for the next couple of decades. When you learn what makes a new generation tick, it’s far easier to evolve your marketing strategy to ignite a spark that gets them to click.