Millennials, also known as Gen Y, currently make up the largest share of the labor force, which means they will soon be wielding the largest share of purchasing power.
And while this generation is no longer the new kid on the block, many companies are still failing to adapt their marketing approach to fit the mentality and behavior of millennials consumers.
In this guide, we'll break down how to market to millennials by helping you understand what makes them different than previous generations. We'll cover their core characteristics and defining features, dive into their spending habits and the motivations behind them, and show you some great examples of companies that have gotten it right.
Let's get started.
Why You Should Be Marketing To Millennials
Pew research has predicted that in 2019, Gen Y will overtake baby boomers as America's largest generation, with an estimated 73 million compared with the boomers' 72 million. The millennial generation is expected to continue to grow (thanks to immigration) until its peak in 2036, reaching an estimated 76.2 million.
In short, it's pretty much a guarantee that if they aren't already, Millennials will very soon make up the bulk of your target audience, no matter what industry you're in.
Additionally, millennials are expected to make up half the American workforce by next year, and by 2025, they will overwhelm the global workforce, making up as much as 75 percent of workers worldwide.
Despite the financial woes associated with this generation (which we'll get into later), millennial buying power is immense.
The Boston Consulting Group states that millennials are responsible for an estimated $1.3 trillion in spending, of which, $430 million is direct discretionary spending.
Representing a massive portion of the workforce, and earning and spending in huge numbers collectively, brands have every reason to be investing into this market.
Can We Finally Decide What Actually Defines A Millennial?
The term ‘millennial' gets thrown around a lot, but there's surprisingly little consensus on what exactly defines this group.
The US Census Bureau defines this group as those born between 1982 and 2000, whereas Pew Research has arguably done more research into the matter than anyone, and after a decade of examining various studies and works, they have determined that millennials are those born between 1981 and 1996. This means that the oldest are turning 38 in 2019, and the youngest are celebrating their 23rd birthdays.
While Pew admits that generational cut-off points are not an "exact science," they also state that decisions are not arbitrary, either. There are, in fact, certain characteristics and political, social, and economic factors that bookend this generation.
Breaking Down Millennial Characteristics
To first understand Millenials as a group, it's important to look at the environment they grew up in.
For example, a millennial is probably old enough to know what a floppy disk is - but not to have actually used one. They probably have some memory of Y2K - but were not old enough to worry about it themselves.
More importantly, the defining news event of millennials' youth was that of 9/11. Even for children born overseas, this was a day remembered by millennial kids around the world.
Millennials and the Global Financial Crisis
This group was coming of age in the working world as the 2008 Global Financial Crisis truly set in, making for an incredibly tough start to working life for many who completed degrees and began their job search at this time.
On one hand, this bumpy start to working careers has made it tough for millennials to get a foot on the ladder at all. On the other, it has meant that millennials are often extremely hard working, as they have had to work longer hours, with lower wages compared to generations before them (taking inflation into account).
Millennials and diversity
Interestingly, the US Census Bureau also highlights that millennials are more diverse than any preceding generation, with 44.2 percent being part of a minority race or ethnic group.
It should therefore come as no surprise that millennials are, as a group, more accepting of diversity and other cultures.
As for the personality traits, beliefs, and habits of millennials, there is a mixed bag of commonly held beliefs around this group.
The media and previous generations often paint millennials as self-entitled, lazy, technology addicted, and clueless about how to manage money. (Think of the trope around not being able to afford houses because they're too busy brunching on avocado on toast).
On the positive side, some millennial stereotypes suggest that this generation care for the environment, are tolerant and accepting of others, are technology savvy, independent, creative thinking, well-educated, and ambitious.
Why Are Millennials The Way They Are?
So why are millennials (apparently) so interested in the environment? Tech savvy? Poor with money?
When you consider the environment in which millennials have grown up, it's not hard to understand why they act as they do.
For example, Student Loan Hero studied the incomes and costs facing millennials compared with past generations, and found that Gen Y does indeed have it worse. Millennials buying their first home are paying 39 per cent more than baby boomers did in the 1980s, and paying an average monthly rental bill of $1,358 compared with less than $500 paid by the silent generation.
In the space of their lifetime, the cost of college tuition has risen 213 per cent. Yet even though wages have been steadily increasing, they are not enough to meet the costs this generation is facing.
So are millennials poor with money, or are they dealing with financial challenges not experienced by prior generations?
Similarly, you might consider the headlines surrounding the environment that millennials are now used to:
- Nature on the eve of destruction - the UN extinction report
- Will climate change cause humans to go extinct?
- Rising sea levels could swamp major cities and displace almost 200 million people
It's little wonder that millennials (and younger generations) are demanding action, given that they'll be around long enough to have to face these scary realities.
The more you understand about the millennial generation - the reasons behind why they are so invested in environmental action, why they are struggling to buy homes, and so on, the better you will be able to understand what drives them in all their actions. This knowledge will colour any Gen Y marketing strategy you create.
Why Marketing To Millennials Is So Challenging
Marketing to millennials comes with a dizzying raft of hurdles that brands must overcome before they can tap into this generation.
For one thing, millennials simply don't go out shopping as much as other generations. One Nielsen survey out of Canada found that millennials took 43 fewer trips to stores per year than the average household (almost one less per week).
Furthermore, Gen Y shoppers are not particularly brand loyal. A Morning Consult survey found that just 19 percent of millennials in the US described their shopping habits as loyal to specific brands, while just under half would consider alternatives even if they do have a brand preference, and almost a third don't pay attention to brands at all.
Millennials are also trend buckers. They are not happy with the societal status quo, and are working to change it. They prefer not to work the traditional 9-5 job, with 77 percent stating that flexible working hours would make them more productive, according to a survey by Bentley University.
One 2016 study by BNP Paribas focused on entrepreneurs, and found that those under the age of 35 (largely millennials) had started, on average, 7.7 companies each, compared with 3.5 among the entrepreneurial members of the boomer generation. These trend-bucking figures show that those in Gen Y want to work for themselves and make their own decisions, which could be key for anyone in the B2B marketing field.
And of course, what would a discussion of millennial marketing be without the inclusion of influencers?
In a now-famous survey by The McCarthy Group, 84 percent of millennials indicated that they don't trust traditional advertising, and instead place high value on recommendations from peers or personal relationships.
While 51 percent of all Americans trust user-generated content more than information found on a company website, as much as 84 percent of millennials state that user-generated content has at least some influence on what they buy, according to a report by Bazaar Voice.
The same report highlighted the facts that millennials are three times as likely to turn to social platforms to learn about others' opinions on which products to purchase.
So here's the challenge: You can't simply tell your Gen Y audience that your product is great - they'd prefer to hear it from someone else.
4 Things To Keep In Mind When Marketing To Millennials
With many challenges ahead, the only real way forward for marketers is to use information we do know about millennials to inform branding and marketing activities. Here are five key things to keep in mind:
1. Make your brand mobile friendly
While we know millennials are shopping in person less often, there is clear evidence that they prefer to shop with their smartphones or tablets. Around 46 per cent of younger millennials and 67 percent of older millennials indicated they preferred mobile devices for shopping. To put that in context, the average was 42 per cent across all age groups.
As a result, savvy marketers should optimize all online shopping portals for mobile, and make use of mobile-friendly advertising techniques, like social or Google ads.
2. Stand for something
When Cone Communications surveyed Gen Y shoppers, they found that nine out of 10 would switch brands if it meant switching to a company engaged in corporate social responsibility. They would also be more likely to purchase a product with some social or environmental benefit, and pay more for a product that did.
For brands, this means it's important to engage in corporate social responsibility, and to ensure millennial audiences are aware of their company causes.
Just look at tentree, one of the fastest growing apparel brands in North America, which plants 10 trees for every product purchased. After just five years on the market, tentree celebrated planting 15 million trees, and hopes to reach a billion trees by 2030. This tenet of their brand is what they're known for, and it's helped them stay in good favor with their target audience.
3. Steer clear of traditional marketing tactics
A major piece of key information is that millennials are averse to traditional marketing. In 2016, Anatomy Media found that as many as two out of three millennials had installed an ad blocker on their laptop or mobile device, or often, across both devices.
Similarly, Millenials are used to services like Netflix, which has forgone the traditional commercial break every three seconds (which is still how cable TV operates). Netflix currently has 139 million paying subscribers, and is just one amongst a sea of streaming services such as Hulu, Crave, and Amazon.
In knowing that older and once-reliable advertising routes are shunned by millennials, marketers must look elsewhere for promising ways to get their messaging through. This, paired with the fact that Gen Y prefers user-generated content, are major drivers for the explosion of social media and influencer marketing amongst this audience.
4. Don't rely on brand loyalty
We know millennials are not typically brand loyal, so it's not safe for brands to rest on their laurels and let a well-known company name do all the hard work. Products and services must be able to stand on their own as good value for money in order to attract attention from Gen Y.
Even with a smorgasbord of fact-based marketing campaigns, the fact remains that marketing is never an exact science, and it may well take some trial and error to find your niche.
Know Thy Enemy (AKA Thy Competitors)
If your carefully thought-out strategy isn't working as you'd hoped, a simple method you can try is to study your enemy. Or at least, your biggest competitors.
Take notes on what they are doing differently. Ask yourself questions such as:
- Are they running traditional ads?
- Are they investing in social media advertising, or influencers?
- On which social platforms are they active?
- What tone do they use to address millennials?
- Do they support a cause?
- How does their website look on mobile?
- Do they have a customer review section?
- What is their price point?
- Is their product or packaging sustainable?
- Does their marketing seek to entertain? Inform? Connect?
You'll quickly create a grocery list of ways in which you and your competitors are on par, and ways you are different. That's not to say you should emulate your competition in all things, but it may offer insights and ideas for tweaks you can make to your strategy.
Examples Of How Not To Market To Millennials
There are countless companies that have tried, and failed spectacularly, at marketing to millennials.
We all remember Pepsi's famous failure to align itself as a supporter of social causes with its ad featuring Kylie Jenner and a can of soda as a solution to a major, and complicated social situation. The backlash was huge, and for once, the internet united in its derision of the advertisement, eventually leading to Pepsi pulling the spot from the air and making a public apology.
Another example from 2017 is Burger King's incredible disaster of a campaign that attempted to incorporate audience's love of technology. They did this by running a television advert in which someone said, "Ok Google, what is the Whopper burger?"
The idea was to activate nearby devices and get them to read out a Wikipedia page highlighting the Whopper's attributes, such as being "America's favorite burger," and "100 percent beef."
However, not only did users feel like their devices were being hijacked for marketing purposes, savvy users quickly updated the Wikipedia page to say less-than-positive things about the burger, such as including cyanide on the ingredients list.
It appears that Burger King didn't consider how invasive this stunt would be, or how easy it is for anyone to edit a Wikipedia page.
These two quick examples show that even if you do show your support for causes, and if you do incorporate the latest technology into your campaigns, there are absolutely wrong ways of doing so. When dealing with millennials (or any audiences), it is always best to consider how a campaign might be received, rather than purely focus on ticking millennial boxes.
Understanding = Success
Ultimately, the more you understand your audience, the better equipped you are to sell to them and make them happy with your brand.
Similarly, understanding how a successful business works will help you identify the gaps in your own business and turn it into a success.
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