Next year, they will become the country’s largest and most powerful consumer bloc and over time will become the most economically and culturally impactful generation in U.S. history, outspending even Boomers over their life span.
They are expected to account for an estimated $1.3 trillion in overall direct annual spending, according to PLMA consumer research.
And they are only in their 30s!
Who are they? They are the Millennials.
Born between 1980-2000, they already carry very heavy wallets, which this year alone are projected to account for between $600 million and $1 trillion in sales. In decades to come their economic impact will increase dramatically as the generation becomes completely of age and reaches peak buying power. “Millennials will account for nearly one-third of total U.S. spending by 2020. Even through the economic tumult of the past five years, their spending has grown by three percent a year,” according to McKinsey & Co. Pew Research, calling them “The Next America.”
With all this at stake, it’s not too soon for exhibitors to get to know and understand this group, also known as GenY, and start preparing by sourcing products that will drive Millenials through their retail partners’ doors. Shared with their retailers, the information will enable both to develop plans and programs together that are geared toward the Millennials’ profile.
The Shopping Millennial
Perhaps because they are so young – born between 1980 and 2000 – and so tied to technology, there are some conflicting reports about this generation such as, they don’t like shopping in brick-and-mortar stores.
Not true, according to a recent Merchant Warehouse and Retail Pro International survey, as reported in Home Accents Today magazine. In fact, more than 90 percent of the Millennials in the survey said they prefer to buy in-store rather than online. The majority of Millennials prefer shopping brick-and-mortar, partly because doing so provides instant gratification, (another of the group’s personality traits), but also because it provides an opportunity for them to test the items themselves. Additionally:
- That same survey found that those who are at the younger end of the group – 18 to 29 years old – mostly shop in-store for apparel (73 percent), footwear (76 percent) and home goods (62 percent).
- When it comes to high-ticket items, however, this same group prefers to buy electronics online (approximately 84 percent), but elects to buy furniture (almost 81 percent) in a store.
Considering today’s consumer culture, Millennials are more explosive than boomers; and for retailers, they outpunch Generation-X as the X-Factor to shopping savviness, according to Julie Rickey, a Jones Lang LaSalle director.
Since no one cares to leave their fair share of an enormous pie on the table, following is an even deeper look into the Millennial personality, much of which is based on PLMA Consumer Research.
- Protecting the environment is “very important” to the Millennial as are other social matters like manufacturing working conditions, global warming, human rights. Since these factors are held in such high regard, exhibitors need to source products that meet this Millennial standard. This generation, for example, will be more apt to go over-budget on a gift made of recyled material by an artist, than settle on one made in a sweat shop in some nameless country. Since this group is increasing its presence in the market, exhibitors need to convey this changing retail dynamic to their retailers so they, in turn, can prepare to add to their product mix.
- A remarkably high number of Millennials are first generation Americans. At the older end of this generation, 14 percent said that one or both parents are immigrants to the U.S. and in the younger group (18-25) the figure rises to 23 percent. One-quarter of all say two or more languages are spoken in the household. Exhibitors would be wise to encourage their retailers to be sensitive to cultural changes in their store’s radius and provide products that speak to those changes.
- Although they do buy brands, brand “loyalty” is not a major pull for Millennials. However, brand-building is more the Millennial style. This generation can share information and promote a brand with lightning-like speed through the vast array of social media networks in which they have associations.
- The adoption of technology in the daily lives of this generation is remarkable. In store, 67 percent of smartphone owners use their phones to compare prices while shopping. More than half also use a phone to find coupons, access their shopping list and find recipes.
Indeed, to say technology is a significant factor in how this generation communicates is an understatement. “They certainly use their comfort with technology to their advantage and it’s often to compare prices, learn about the latest trends and capture the best deal possible before they walk into a physical retail space,” according to Rickey. Clearly, digital tools that engage these shoppers and enhance their in-store experience are a good investment.
Get Tech, Get Social
In an article for Entrepreneur magazine, Jamie Gailewicz writes, “More than any other generation, Millennials rely on each other, sharing opinions with friends to make more informed decisions.” They have technology at their fingertips with a smartphone and a number of platforms on which they communicate: Facebook, Instagram, Twitter, Pinterest, FourSquare, LinkedIn, to name but a few.
Social media has transformed how this generation shares its thoughts and extends its influence over others. Stars, likes, and comments on a social media platform have given them power to share their opinions and pass judgment on the things they approve and disapprove, she adds.
Social media is probably one of the best places to meet up with a Millennial. In fact, it may be the only place: if a product or company is not out there in the cybersphere, on some social network platform, a Millennial is unlikely to find it at all.
It’s also a place where exhibitor and retailer can collaborate on reaching out to the generation, offering links to each other, cross promoting, offering special deals that appear nowhere else and coupons, coupons, coupons.
In one survey, 50 percent of respondents said they’d be willing to go to a retailer location to use a coupon if it offered at least a 20 percent discount.
There is a sensitivity toward savings in this group, which entered the work force in the midst of the Great Recession.
Posting coupons and targeted promotions on social media sites is a win/win for exhibitor and retailer alike. Research shows that 38 percent of Millennials are influenced by online savings-related campaigns, compared with 28 percent of all shoppers.
Compared with the population in general, Millennials are 262 percent more likely to be influenced by mobile apps or by blogs and social networking sites (262 percent!).
Help Your Retailers Attract Millennial Consumers
With so much to be gained in new opportunity and additional revenue by attracting Millennial consumers, it’s a win-win for exhibitors to help educate their retailers about this burgeoning consumer demographic.
- Be the educators. Vendors can create podcasts for their retailers explaining who Millennials are and how they shop. Have the podcasts available on company websites and have them running in showrooms and booths during markets. Or package the podcasts on CDs and distribute them.
- Be the source. Source products that appeal to Millennials and promote them to retailers with special displays at markets and shows.
- Work it! During major markets like NY Now, conduct mini-workshops for retailers featuring two or three Millennial consumers who will explain the whys of their shopping points of view. Arrange for the Millennials to be available for questioning by the retail audience.
- Get Savvy With the Language! Learn the key words that attract Millennials; words like green, fair trade, socially responsible, and work them into your website marketing so that search engines will lead Millennials to your company when they query for products. Have links to your retailers who sell the products. Online is “where it’s at” for Millennials.
- Play the Field. Get online and create playing fields in the arenas where Millennials meet: somewhere out in cyberspace, on some social media platform, or on an ‘app’ on their smartphone.
When all is said and done, exhibitors will want to meet the needs and wants of this next generation of super shoppers for the growth opportunity it offers them and their retail partners.