Strategic branding is based on insights about the audience you want to reach. To create a meaningful brand, you first need to understand what is meaningful to your target. For Obama and the Republican Presidential candidates, The Occupy Wall Street movement reveals a lot about what the Millennial market is thinking.
Why Millennials Matter
The Millennial vote will be pivotal to winning the election in 2012, just as they were in 2008. In 2008, Millennials made up 17% of the electorate. Collectively, they accounted for a significant part of Barack Obama’s national popular vote.
In 2012, even more Millennials will be of legal voting age. Millennials are projected to make up nearly one fourth of the electorate next November. Many of these young voters will be casting ballots for the first time, and are likely to be more ‘independent’ than partisan. Nevertheless, Pew figures from November 2011 show Obama with a 26 point lead over Mitch Romney among 18-29 year olds in a hypothetical match-up. A lot will depend on how many Millennials actually show up to vote as well as what both candidates do to capture their attention in the next 12 months.
Millennial Mood Shift
In the recession-dominated four years since the last Presidential election, Gen Y has gone from being optimistic and ‘hopeful’ to discouraged and angry. The shift seemed to have happened quite suddenly, triggered by the realization that trillions of stimulus dollars, gigantic industry takeovers and costly bank bailouts were insufficient to create jobs and give young adults a toehold in the economy.
Why ‘sudden’? Even as little as a year ago, I would never have predicted anything like the Occupy Wall Street movement. In fact, when Jon Stewart and Stephen Colbert launched their “Rally to Restore Sanity/Fear” in Washington DC last October, I wondered whether it would resonate with a generation notable for its lack of protest and desire to work within the system to create change:
“… the truth is, this generation does care. They are caring by not participating, by disassociating. Stewart also understands this; he gets their approach. They are conservative liberals. They want to change the system without marching down Main Street. Without lowering themselves to the same tactics, name calling and bickering they detest. It’s hard to have a voice when you are disgusted by the tone of the conversation. So instead of joining, they are quiet rebels who challenge the status quo by the way they live, not how they protest. …. The “Rally to Restore Sanity” was a TV staged event they attended, not a grass roots rally they created. Just like Demand TV or ITunes, it was offered up and they clicked “attend.”
When you’re hurting, inequity is an easy concept to grasp — just ask any four year old. In 2011, evidence of unfairness was easy to find. The concept that lit the spark was growing lopsidedness in wealth distribution. The target of resentment was easy to find, as well – Wall Street. The way money is made by corporate fat cats and Wall Street bankers became the focus of Millennial discontent, not those who set the rules in Washington. This is good for Obama, and bad for Republicans who are more associated with the 1% than the 99%.
What It Will Take to Win With Millennials
Winning with Millennials will require either championing the idea of inequality, or refocusing the dialog. Obama seems to understand this with his recent populist stance and anti-business actions, like the decision to block the Keystone Pipeline and the AT&T/T-Mobile merger. The Wall Street Journal writes, “The deal landed just as the Obama administration was rolling into its rel-election campaign, which, amid a depresssed economy, will be about vilifying big business and playing to economic pessimism.” (“How AT&T Miscalculated”, WSJ, 12.21.2011)
Yet there is evidence that refocusing the dialog may be a better way to win the hearts of Millennials. Most people accept that wealth is inequally distributed and say that even in an ideal world, the top 20% should in fact control about a third of the wealth. Millennials especially have been raised to believe that hard work and talent are what matters to success. What they struggle with is inequal distribution of opportunity. In other words, it’s okay if someone has more than I do, as long as I have a shot at being part of the 20% myself.
Shifting the conversation to distribution of opportunity rather than wealth would resonate with Millennials, who contrary to myth, are not looking for a handout. Democratic pollster, Douglas Schoen, reported in October that the more radical ideas of those Occupying Wall Street are in fact out of step with the mainstream of Millennial thinking, which is more focused on a level playing field than redistributing wealth: “People are frustrated by an economy that does not reward hard work and responsibility.” (“Polling the Occupy Wall Street Crowd,” WSJ, 10.18.11)
Paul Conway, leader of the non-profit organization, Generation Opportunity, agrees with this assessment. He says the Occupy Wall Street protesters are out of step with most young voters:
“Despite this loud minority, though, most young voters believe lowering business taxes creates jobs, and that businesses are able to grow with less government interference…President Obama’s 2008 electoral victory was attributed in part to his support from first-time voters. But his public expressions of sympathy with the Occupy Wall Street movement, and his disdain for public spending cuts, could alienate a large number of young voters this time around.”
Listening to young voters and getting the real message of Occupy Wall Street right could make the difference between winning and losing in 2012.
Michelle Nunn, CEO of the Points of Light Institute, concurs that the Occupy Wall Street group does not represent mainline Millennials who continue to be more interested in changing business from the inside out than via protest.
“The Occupy Wall Street movement is largely fueled by a relatively small set of young people who view the protests as a fight for their future. The vast majority, however, are getting up and going to work every day — or wishing they could. These individuals are part of a less dramatic but, perhaps, equally powerful movement of Millennials shaping the future of business.” (“Millennials to Business: Social Responsibility Isn’t Optional, Wash Post, 12.20.11)
Creating a Meaningful Presidential Brand
We should be thankful to the Occupy Wall Street movement for making us recognize Millennials as a political force, even if they do not represent the majority of Millennials. If I were advising the President or one of the Republican Presidential campaigns, I would tell them to get busy. They need to engage with motivated young adults, who’s only request is that they get a fair shake and know a fair shake won’t come from Wall Street but from the politicians that set the rules — for how jobs are created and wealth is made, not how wealth is redistributed. With Millennials becoming the most influential generation to vote in 2012 and beyond, I am hoping that this dialog starts soon.
Millennials define themselves more by their interests and passions than their careers or even technology. The desire to connect with brands that share their passions is a key motivation, both online and offline.
Consequently, identifying and understanding Millennial passions is an important first step in designing effective marketing programs.
Last week the Kansas City-based agency, Barkley, shared new research that shows Millennials have a greater range of activities they are passionate about than those over 35. Significantly, Milennials are more likely to define success in personal terms and to put greater importance on it than older generations. “Seventy-nine percent* define success as “doing what you are passionate about“. Today’s youth are not influenced by money or the image of success. In fact, even in their online communities, only 6% feel that “having lots of friends on Facebook” is an influential quality. The vast majority believe “Being True To Yourself” is inherently more influential in life (62%).” *
Millennials want to be defined by their passions, not their careers.
Last week I moderated a panel at the conference Barkley sponsored to reflect on the findings of their research and its implications for marketers, “Share.Like.Buy” in San Francisco. The panel was titled “Tapping Millennial Passions,” and the panelists were noted Millennial researchers: Barbara Bylenga, CEO, Outlaw Consulting, Alex Smith of Mintel, and Tracy Panko, CEO, Spiral16.
The session focused on how Millennial passions are expressed and how they differ from those other generations. The panelists also discussed the potentially disruptive implications of these differences for marketing products and services across a number of categories.
Alex Smith began by noting that while Millennials’ passions may be similar in some ways to those of older cohorts – the environment, causes, music – the way they express and pursue those passions is very different. They have more tools to express their passions, which are used to curate their personal identities and gain attention. Their overall goal is to express themselves in a way that is true to who they really are.
Barbara Bylenga added that Millennials are especially passionate about things that impact others: the planet, the environment, social justice, poverty. They see their passions as a way to define themselves as ‘changemakers’. What other generations might consider an ‘interest’, Millennials see as central to who they are. They define success in terms of their ability to turn these interests into accomplishments or even a career. Hence their passions are especially motivating.
Use a lifestage lense to predict and plan for Millennial impact
Bylenga says lifestage is a good lense for thinking about how Millennials will change categories. The latest Census data confirms Millennials are putting off childrearing, staying single longer. Currently they are in the ‘explorer’ lifestage, but as they mature, many are entering the ‘spinner’ stage, forming households and settling down, and in some cases readjusting but not necessarily abandoning their passions. They still want to make a difference, but will realize (rationalize?) that making a differences lies in the cumulative effect of small decisions, little actions, not necessarily a big career accomplishment. Every little decision is going to take on added significance. Marketers can leverage this insight by helping them feel like their consumer choices are helping make a difference.
Bylenga went on to say Millennials will increasingly see it as a stepping stone to independence, with many aspiring to be entrepreneurs rather than bind themselves to a sure paycheck. (In fact, this prediction may be already coming true. There was a 250% increase in the past two years in the number of Millennials who choose freelance work over a job.)
Characteristics of brands that generate passion among Millennials
When asked the characteristics of brands that generate the greatest amount of passion among Millennials, panelists repeated mentioned the importance of authenticity. According to Barkely’s research, Livestrong is the number four most recognized charity among this age group, a position it achieved by being authentic according to research by Spiral16, said CEO, Tracy Panko.
Despite dramatic and controversial events surrounding Livestrong founder Lance Armstrong, the Spiral16 data shows that Livestrong has continued to successfully engage their community and turn them into passionate evangelists. Besides amassing a huge following on Twitter, Livestrong has also spread its influence and message across other social media platforms with a clear and concise message. Eight out of the Top 10 most influential web pages in the study are components of the Livestrong organization, while the remaining two pages were created by passionate Livestrong fans. (The RSS feed for the Livestrong blog ranked even higher — number two — than blog URL itself.)
Panko points out that this kind of community and presence is impressive. As much as brands would like to, they cannot just control online attitudes at will. A digital presence this dominating, nonprofit or not, can only be built up from years of consistent hard work and clear strategizing. She also cited Patagonia as another brand with a strong authentic brand with special appeal to Millennials. Patagonia’s willingness to willingness to show the less desirable parts of their brand suggests an honesty that allows them to win with consumers. Other brands cited for their authenticity were Trader Joe’s and In ‘N Out Burger.
This morning I watched a 1970′s NASA video that envisioned a 10,000-person space city more than a mile in diameter called ‘Taurus’. I expected a good laugh, but what I found instead was a nearly plausible story of how a space city could be built and sustained. Food would be grown using abundant sunlight and optimal conditions (no storms or floods) in just 100 acres of farmland. Supplies for building would come from the moon, as it is closer than earth, the difference in gravity and abundance of ‘good material’. The images of life in the space city, were surprising modern, not retro or ‘sci-fi’. Yet for all its plausibility, the prediction that Taurus would be achieved by the year 2000 is laughably off target.
Everything Is Obvious* Once You Know the Answer
Envisioning any future event, even the weather, is fraught with traps. In his book, Everything Is Obvious *Once You Know the Answer”, Duncan Watts tells of a management scientist name Steven Schnaars who tried to…
“…. quantify the accuracy of technology-trend predictions by combing through a large collection of books, magazines, and industry reports, and recording hundreds of predicitons that had been made during the 1970s. He concluded that roughly 80 percent of all predictions were wrong, whether they were made by experts or not.”
Watts’ book is dedicated to helping his readers understand why predictions are so difficult. He concludes that the difficulty with prediction is knowing what we should be predicting. Generally we get it wrong because it’s hard to tell what is most relevant. In the chapter titled, “The Dream of Prediction”, he writes:
“When I was young, many people believed that the future would be filled with flying cars, orbiting space cities, and endless free time. Instead, we drive internal combustion cars on crumbling, congested freeways; endure endless cuts in airplane service, and work more hours than ever. Meanwhile, Web search, mobile phones, and online shopping — the technologies that have, in fact, affected our lives — came and more or less out of nowhere.”
The key to prediction is understanding what is relevant. It turns out that knowing what is right or wrong is less important than knowing what matters.
Many outcomes seem obvious in retrospect. The difficulty with prediction is in knowing what predictions really matter. So many things ‘could’ happen that identifying the important outcomes from the irrelevant is nearly impossible. How would anyone know that terrorists would use boxcutters to hijack a plane, that a 1990′s start up called Google would make it’s investors a fortune?
Knowing what matters is the fundamental insight behind Taleb’s idea of ‘Black Swans’ – rare events that carry great import when they do happen. There are many unusual events, but not all are very important. According to Watts, it is this fundamental distinction of ‘importance’ that makes future prediction so difficult. In his words, “The apparent obviousness of past events tempt us into thinking that we ought to be able to anticipate which events will be important in the future.’
As marketers, we are routinely asked to predict the future. Our skill in making those predictions does not lie in the ability to say what unlikely events will happen in the future. Rather it relies on our ability to discern what matters to consumers. Knowing what matters helps us make better predictions because it is a market’s likely response to events that is significant, not the event itself. Many events themselves are fairly obvious and even likely.
Yet predicting the the future precisely is difficult because relevance can be even more difficult to predict than events themselves. After all, it was fairly obvious (in retrospect anyway) that Apple would have introduced another device. But it’s relevance and transformative effect are much more difficult to predict.
The future of Millennial trends and predictions
Making predictions about Millennials is not that difficult. They will grow older, have more income, start families, pay down their debt, take vacations, buy life insurance and worry about sending their children to college. The question is not whether these events will happen, but what will be relevant to them as they make decisions and respond to the inevitable ‘black swan’ events of their lifetimes.
.
On June 29, Ad Age published an article with the provocative title, “Stat of the Day: 68% of Millennials Ask Friends Before Deciding on a Restaurant“. The article was widely tweeted – 179 times from the Ad Age site alone. But the overall tone was kind of snarky, like Millennials can’t make up their minds.
“Millennials, the 80 million people now aged 16 to 34, have buying and brand preferences that in many cases diverge sharply from their parents. But, millennials need help from friends and family in making just about any decision, including which restaurant to eat at. They’ll use technology (social and mobile) to gather opinions. Sixty-eight percent won’t make a major decision without running it by their network first. How do you begin to understand the shopping habits of a generation that has never had to make up its own mind about anything? You start with lots of surveys.”
Millennial, Kelly Ericson, left a long comment, saying surveys don’t “really explain why our “buying and brand preferences…diverge sharply” from our parents.” Then she helpfully and insightfully provided her own explanation:
“It’s true, when I want to go to a restaurant I run it by Yelp, not necessarily my fellow friends as the ar”ticle states– but obviously wouldn’t rule out their opinion if I got it. I Yelp because it’s convenient, gives me exactly what I want to know, immediately. I go through the reviews that aid me in my decision and choose. Then Yelp tells me how to get there, click the address, and it shoots me out of the app right into Maps on my iPhone.
As for shopping, sure I would shop at Target and Walmart, because it’s well priced and I can get some other shopping done while I’m at it. We Millennials are busy (and broke). So hello, the trend here is fast and affordable. We wouldn’t shop there if we didn’t feel like we had to. Yes, we have an iPhone, a Macbook, and maybe a nice Marc Jacobs bag, but don’t let it fool you, that’s why we have to save where we can.
Though we “apparently don’t like to go to the store alone” let’s just be clear, we are not looking for companionship, we’re looking for guidance. And yes, I still call my mom. Run my decisions by her before making them– but not before I’ve also gone through the rest of the familial gamut. You see, we’re seeking answers from the more experienced, because we can’t afford to make mistakes, after all we’re trying to buy a house some day.
We’re not some great big mystery, we’re just an obvious sign of the times. If you really want to “begin to understand” us Millennials, why don’t you try having a conversation with us?“
Kelly is exactly right. Millennials are not a big mystery. And understanding the why’s and motivations behind their behavior requires more than surveys.
As a market researcher we do a lot of surveys, but we also take time to follow up qualitatively. We also maintain a Millennial “Super Consumer” panel to give our clients an opportunity to get deeper than radio buttons and answer these kinds of ‘why’ questions.
Surveys provide the facts, but listening provides the answers.
When it comes to defining personal identity, few brand choices matter more than what you choose to wear. When students tell me they aren’t into brands, I merely smile and point to the Notre Dame, Nike, and Adidas logos on their hats, shirts and shoes. For Millennials, apparel brands are an important means of curating identity.
For marketers, the challenge is to understand what makes a brand cool enough to wear?
The Coolest Brands
There are many systems designed to tell us which brands have the most equity, are the most valuable or represent the greatest value to consumers. But until today I was unaware of a serious study of which brands are the most cool. Spanish branding agency, Allegro234, recently released results of its 2010 Coolest & Gaps Branding Survey. The study, now in its third consecutive year surveyed 4,200 people in 28 countries.
One of the things that makes it so original is its emphasis on write-in responses. Rather than pre-ordain the coolest brands, they rely on nominations. Each respondent proposes one brand that represents ‘the coolest experience’. Remarkably, of the 114 global brands nominated, 20 represent 60% of the responses. The top 40 proposed brands are 75%. This high degree of consensus suggests we know all cool when we see it.
The study went beyond proposing cool brands and also asked participants to rate their nominated brands on ten dimensions of the brand experience. These dimensions included ‘Brand’, ‘Communication’, ‘Place’, ‘Availability’, ‘Related Services’, ‘Tailormade’, ‘Interactivity’, ‘Respect for the Environment’, and ‘Social Responsiblity’.
Of these ten factors, by far the most important was ‘Brand’ – the vision that the brand promises.
The Coolest Apparel Brands
The entire report is well-worth reading, but for this blog I will focus just on the apparel brands. Not surprisingly, apparel brands represent a large proportion of the top 60 coolest brands. They include:
Diesel (6), H&M (9), Gap (12), Nike (14), Levi’s (17), Adidas (19), Swatch (22), North Face (23), Hugo Boss (26), Stella McCarthy (31), D&G (32), Patagonia (40), Top Shop (42), Pony (45), Zara (49), and Burberry (51).
Allegro234 observes that cool apparel brands fall into four broad categories. Tellingly, none of these categories has much to do with ‘luxury’:
Masstige: Ex: Stella McCartney, Hugo Boss, D&G, LaMartina, Disiguel
Mass: Ex: Target, Gap, H&M, Top Shop, Zara
Performance Sports: Ex: Nike, Patagonia, North Face
Urban Sports: Ex: Adidas, Pony
One of the most fascinating lessons here is that ‘luxury is no longer a guarantee of coolness’. The report goes as far as to conclude that ‘luxury brands with some exceptions, are no longer considered cool’ and that a cool experience is now what matters most in the definition of cool’.
“A cool experience helps peoples’ referential status and moves away from the traditional idea of luxury. Something luxurious is not necessarily cool. This gives greater weight to trends over more rational shopping processes and the flow of the experience is more important than possessing he product in order to live it.” 2010 Coolest Brands Survey, p 13.
I have long said that luxury is not relevant to Millennials. In my experience, young adults have a different metric for determining value, and that metric rarely involves status or prestige. While it’s true that Millennials enjoy premium brands, their affinity has more to do with the experience of ownership than the fact of ownership. A Coach or LV bag for a young professional woman, represents the first step on the path to a professional image or career. It has practical connotations, an accessory that aids confidence in an interview and suggests you are discerning and willing to ‘invest’ in something of value.
Other related lessons: Mass brands can be just as cool as exclusive brands. Performance brands can be just as cool as fashion brands. In other words, it’s no longer essential to be ‘hip’ to be ‘cool’.
Do Millennials Relate Differently to Brands?
The research on cool brands was not limited to Millennials, but coolness represent a more modern view of brand value than more traditional markers. In particular, by underscoring the importance of ‘brand’ in the sense of ‘credible promise or vision’, the Allegro study is better aligned with how Millennials choose brands.
New frameworks are needed and have started to appear, that emphasize attributes such as Identity, Performance and Social Responsibility (Future Brands). I like to think of these as Competence, Caring and Belief. More research is needed before we can conclude that Millennials relate differently to brands, but I am convinced they do.
I came to dance, dance, dance, dance
I hit the floor
‘Cause that’s my, plans, plans, plans, plans
I’m wearing all my favorite
Brands, brands, brands, brands
Give me space for both my hands, hands, hands, hands
You, you
Cause it goes on and on and on
And it goes on and on and on
Millennials are suspicious of marketers, skeptical of claims and ignoring ads, but their affinity for brands is undiminished. Gen Y understands that brands are cultural symbols that convey meaning. Brand choice, especially in image driven categories like mobile phones, shoes, entertainment, and clothing brands matters even more to teens and young adults, than to older consumers.
Brand Talk
Keller Fay’s 2010 Talk Track study asked participants use a diary to keep track of their brand conversations between July 2009 and June 2010. The study sample ranged from ages 13 to 69, and included a break out sample of 4,900 teens (ages 13 to 17).
They found that, overall, teens engage in a significantly higher level of word of mouth about all brand categories than the public as a whole. Furthermore, teens are twice as likely as everyone else to hold brand conversations online, although online still accounts for a minority of brand conversations even among teens (13% for teens vs. 7% for general public). (‘ Online’ included email, texting/IM and social networking).
The sheer volume of DAILY conversations about brands is impressive.
- 69% of teens have one or more conversations per day that include food/dining brands, versus 54% of the total public.
- 67%/39% about technology;
- 63%/42% about sports/recreation/hobbies;
- 63%/39% about telecommunications;
- 59%/38% about retail/apparel
- 58%/46% about beverages
- 45%/35% about automotive
- 45%/26% about personal care/beauty
Marketers, Brand Stories and Facebook
This week, Facebook announced a new program called ‘Sponsored Stories‘ designed to generate revenue from these conversations.
When a friend mentions a brand or has any brand interaction such as “Page Likes, App interactions, Place check-ins and Page posts”, that mention will now show up in a separate ‘sponsored stories’ area to the right of the feed. This is to make sure that mention isn’t missed. Here’s a short two-minute video from Facebook explaining how it works.
Make no mistake, Brand Stories are ’advertisements’, but they are likely to receive little or no pushback from Millennials, for they don’t seem like ads. Millennials want to know what brands their friends ‘like’. As the video points out, “anything they would have seen as a sponsored story is something they would already have seen in their newsfeed.” Now, it’s just more likely those interactions will be noticed.
Brandification?
As Millennial Josip Petrusa points out in his blog this week, Sponsored Stories is just a continuation of the ‘Brandification of Your Social Presence”.
“Both Edelman’s “8095” and L2’s “Gen-Y Affluents” reports have verified that Millennials are considerably brand-centric. They love the brand. They love brands. They share brands. They talk brands. They live brands. They speak brands. And they have invested considerable ideological value into them. They have come to represent who they are. When you make this correlation you begin to see the very beginnings of branded social profiles. Brands will no longer come to represent the products that encompass them but the user who empowers them. The user who humanizes them.”
The stories go on and on and on
From my perspective, what Petrusa calls ‘branded social profiles” is the continuation of a trend toward the humanization of brands and the branding of people, places and institutions that has been developing for years. The trend has simply accelerated with the advent of social media.
James Twitchell wrote a provocative book as early 2004, titled “Branded Nation: The Marketing of Megachurch, College, Inc., and Museumworld“ . Twitchell points out the importance of stories to branding in clear terms: ’Often the only thing that separates this ratty rug from that priceless tapestry is a story’.
In the age of social media, ’brand’ stories are no longer confined to the ‘marketplace’ but are now part of culture, both high and low. The difference is that now we are more self-conscious about creating those stories. Here’s Twitchell again:
“And really, isn’t all life about marketing, in a sense? You market yourself to your friends, to your employer, your constituents, and they to you. Your children market themselves to their sport team (pick me! pickme!), schools market themselves (a degree from us is a ticket to success), and even churches market themselves (services at 9 and 11) and their products (forgiveness now, salvation later). Maybe it’s just the illusion of not marketing that we need to dispense with.” (p. 3)
Consumer spending is up, but I highly doubt Millennials are driving the trend. Many people are surprised when I describe Millenials as ‘frugal’, but the Gen Y’ers I know agree wholeheartedly.
As a generation, these children of the free-spending Boomers are tightwads who love a bargain.
There are probably many reasons for their collective thriftiness. Here’s a possible list of reasons why Millennials are such pennypinchers.
1. They hate waste. Efficiency is a core Millennial, value – they don’t like to waste time, money or any other resource.
2. Indecisiveness. Millennials often prefer to make no decision than the wrong decision. I think it has to do with fear of closing doors on possible opportunities more than indecisiveness, per se.
3. Cash-strapped. Many are students, unemployed, or underemployed; Increasingly, they are up to their eyeballs in college loan debt. Penny pinching is a rational response.
4. Fear of being cash strapped. Even those who are employed aren’t sure when they might need a rainy day fund.
5. Self-perceptions: Even if they aren’t cash strapped, they like to think of themselves as smart shoppers.
6. Debt averse: They don’t want to borrow any more unless they absolutely have to – including a car, a house, an education.
7. Eye on the future: Many want to use money to make money. They have a long term view.
8. Non-materialistic: This usually gets an incredulous laugh. But it’s true that they value experiences over things. They aspire to travel light in the world.
9. Saving is a game: It can be fun to see how far you can stretch a dime or a dollar.
10. Saving yields social currency: Knowing about how to get the best deals makes you a valuable resource to others.
How can marketers get Gen Y to open their wallets, purses, and smart cards?
1. Have a heart. Link the purchase to something they care about, such as a worthy cause, a passion or interest. Starbucks Project Red is a good example.
2. Offer deals not discounts. Is there a difference. You bet. To a Millennial, a deal is something you have to work for. You earn it or its exclusive. Anybody can have a discount, but a deal is special. This insider-ness is behind the appeal of QR codes, Groupon, and Foursquare offers.
3. Demonstrate why it’s smarter in the long run. Deals and incentives that expire, long-term benefits and savings over time are all time tested ways to incent a purchase now.
Photo by D Sharon Pruitt
Guest post by Sam Davidson
Now that Black Friday and Cyber Monday have come and gone, the mad dash to Christmas Eve is on. Stores will continue to offer promotions and discounts in order to lure shoppers inside to purchase gifts for loved ones and themselves.
One coveted demographic (all year round) is the Millennial shopper. In this video of ComScore’s Gian Fulgoli, it appears that the overall spike in online shopping this year will be a “generational thing.” After all, it’s easy to shop online when you’ve been doing it since you were old enough to count money.”
How can companies convince Generation Y shop at their store (either in person or online)? Here are three emerging trends to watch over the next few weeks:
Be good
The first generation to graduate high school and college with community service requirements, Millennials know how to volunteer. They also look to extend those passions and values to their purchases, choosing products and services that make a difference. They buy TOMS shoes en masse and now other companies are targeting Millennials as the social-aware shopper.
Be digital
Digital natives, Millennails know how to find deals on the Web. They also know how to check in, buy up Groupons, and send gift cards online. While retail outlets expect a 2% growth, online spending should grow by as much as 11%. Combine this forecast with the fact that most Millennials wait to shop and I think we all know where and how they’ll be buying presents.
Be personal
Millennials are killing the holiday card. When you can text or email your sentiments, why fool with stamps and envelopes? Likewise, because of today’s digital tools, more stores and companies are offering discounts and deals tailored to the younger set, whether it’s when they check in or when they share a deal with their personal network. This article from YPulse highlights some of the innovative marketing being done by Coke, Gap, and American Eagle, among others. It even looks like some companies are being good and digital in order to be personal.
Come January, we’ll be able to see how this holiday season was for Millennials. The hard reality is that the Millennial unemployment rate is hovering around 15%. Facts like this could make irrelevant the three suggestions above if not coupled with attractive deals and coupons. Thus, sometimes, the Millennial shopper is no different than any other generation: Everyone’s looking to save a buck.
Sam Davidson is a writer, entrepreneur, and dreamer who believes that the world needs more passionate people. To help people find and live their passion, he has written 50 Things Your Life Doesn’t Need. He is the co-founder of Cool People Care and Proof Branding, and lives in Nashville with his wife and daughter. Sam is a member of Brand Amplitude’s Gen Y Super Consumer panel.
Yet another study appeared today showing Millennials are less interested in driving around in a car than they used to be. Sixty-seven percent of 25- to 34 year-olds say they’d drive less if other options were available.
This study may be a little self-serving (it’s sponsored by ZipCar, click here for the SlideShare presentation), but the evidence was already pretty overwhelming that cars are well-down on the Millennial shopping list. Last spring, Ad Age ran an article titled, “Is The Digital Revolution Driving a Decline in Car Culture?” They reported only 31% of 16-year-olds and 49% of 17-year-olds had licenses, with the decline accelerating rapidly since 1998. Share of miles driven by 20-30 years dropped to 13.7% in 2009 from 20.8% 10 years earlier.
What’s driving the decline in driving?
A whole constellation of factors appears to be at work here: concern about the environment, the poor economy and high unemployment, a shift in priorities toward experiences over stuff, and the availability of better options, such as ZipCar and public transportation.
Beyond these more ‘systemic’ factors however, is a nagging sense that perhaps the automotive industry itself has yet to make cars and the car buying process appealing to Millennials. Last summer the Examiner reported on a study by Wakefield research that found “Millennials Say Buying a Car More Painful than the Dentist“. The study revealed Millennials think cars are unappealing and the purchase process is worse. Here’s what they had to say about buying a car:
More than half of Millennials classify negotiations with a car salesman as more painful than going to the dentist. That common conception certainly isn’t going to help the auto industry. It needs some proverbial laughing gas to make the process a more enjoyable one. Millennials know just the thing. Internet. Eighty-four percent of Millennials agree that having convenient Internet access in the dealership during the car-buying process would make the whole experience seem more “fair and transparent.” More than anything, that means Millennials want to have easy access to research while they’re at the dealership. They’re likely trying already–from their phones.
A study by Microsoft on Millennials and the shopping process revealed similar results. They found Millennials want to connect with car companies through IM (56%), company blogs (74%) and mobile alerts (52%) about new car releases and price drops. Fifty-two percent said they would use self-service kiosks or mobile devices at the dealership rather than talk to a real person.
Pain in the purchase process aside, there is evidence that the industry is not addressing Millennials’ needs: high tech, high mileage, low maintenance cars.
- Technology: Wakefield research also found that 27 percent of Millennials said they would compare today’s cars to a 1980s desktop computer or typewriter. “The more integrated the technology in the car, the easier it fits in their lives”.
- Mileage: Gas mileage is one of the most important factors Millennials consider, according to the Deloitte Automotive 2009 Gen Y Survey. The “Attitudes Toward ‘Green’ Efforts survey, conducted by five Michigan State University grad students, found that Millennials are willing to pay up to $8,000 for a car with an increased 15 miles per gallon.
- Low Maintenance: Cars are expensive to maintain. According to DOT data, it costs $8,000 a year to operate a car based on the average 15,000 annual miles driven. NPD reports that automotive parts stores in geographic areas where Millennials cluster report 11% higher sales of filters, spark plugs, tools and hard parts, and concluded that many are becoming automotive ‘do-it-yourselfers’. After all, if they can fix their computer, why not their car? As this Gen Y’er explains in a short video, “I won’t buy a new car anytime soon” so “I do as much as I can on my own” and when necessary call a friend for help.
All this spells opportunity for car manufacturers. Why not create a car that is designed from the beginning to make D-I-Y an affordable and realistic option? If Millennials are willing to pay more for low mileage, why not follow the lead of Ford, Kia and Scion and offer more fuel efficient cars? If they are used to having fully-featured computers, why would they settle for a stripped down car?
There are some who will object and say the trend is one of delay not denial. It’s possible that as Millennials age, have children and move to the suburbs, their needs will change. Maybe. But, I believe they will continue to look for a different way to satisfy those needs.
If auto marketers aren’t successful in reversing the trend, the ramifications of loss of interest and dependency in cars by Millennials goes beyond the car industry itself. There are implications for housing, urban planning, the auto insurance industry, retailing, and makers of alternative transportion. Perhaps it’s time to invest in bicycles?
The Millennial Ideal? Free wifi and pet accomodation
Guest post by Marty Predd
As a Millennial who loves to travel, I’m always looking for great hotels in great cities that won’t break the bank. Reasonable request, right? It’s not always easy.
Hours are spent on hotels’ own websites and third party sites like Expedia, Kayak, and TripAdvisor trying to suss out just which property is truly worthy the star rating being advertised. By “4 star”, do they mean…”once was four star, but hasn’t been renovated in 15 years and smells like Grandma’s basement”? Or is this actually a newish property in a desirable location with cool restaurant or bar on site you might actually want to patronize, and rooms that might actually be nicer (cleaner, cooler furniture) than what you’ve got at home?
So how DO you know? Within the same “level” (i.e., all 4 star hotels) star ratings are borderline meaningless. Reviews from previous guests can provide some clarity, but these, too, I’ve found are highly subjective. Judd from Iowa attending the yearly Corn Farmers Conference at the Indianapolis Hyatt probably has a way different set of expectations than I do. Same goes for John the business traveler whose company pays rack rate for his room. If you’re not paying yourself, chances are you’re likely to be less critical and more forgiving.
What about brand?
If you have a great stay at a wonderful Hilton in downtown Charlotte, can you expect similar quality and service at the Hilton San Francisco?
Sadly, across all the major brands (Marriott, Hilton, Starwood, Hyatt etc.) I’ve found the answer to be consistently no. I know because I’ve been burned more than once by assuming brand actually meant something. Case and point: I’ve stayed at a really great Sheraton in downtown Seattle with an expansive, glowing lobby, state of the art fitness center on the top floor with awesome skyline views from all the cardio equipment, and an immaculate room. Impressed, I later chose the Sheraton Philadelphia Society Hill, a “4-star” property I discovered was badly run-down, with worn carpeting, rusty workout equipment, and the kind of bathrooms that make you wonder whether the shower will make you cleaner or dirtier. On other occasions, I’ve stayed at a beautiful Westin in Sydney, only to be sorely disappointed with a dated, dirty Westin in Atlanta Buckhead for $200/night.
Why does brand seem to tell us so little about hotels, when in so many other categories – from technology (i.e., Apple) to big box retail (i.e., Target) to cars (i.e., Audi) to food (i.e., Trader Joe’s) to apparel (i.e., North Face) – it communicates so much? As perhaps the most “mobile” generation ever, and one that identifies strongly with brands that have proven their mettle, Millennials seem to represent a glaring opportunity for the category.
I’ve signed up for numerous hotel loyalty programs, but it’s been really hard to get excited about any of them because the brands seem to offer such inconsistent experiences from property to property. What exactly are you asking me to be loyal to? Properties that share a name or sign but quite possibly very little else?
Is anyone getting it right?
In my own travels, I have discovered at least one brand that appears to be already seizing the opportunity: Kimpton Hotels.
I’ve stayed at probably at least eight different Kimpton properties in the last 3 years and they have all (really!) provided:
- Quirky, fun design: Each property features its own quirky design scheme, with bright colors, funky patterns, local art and unique furnishings you wish you had at home (no cliche lamps with bult-in power outlets here).
- Friendly, unpretentious staff: These properties are consistently 4-star quality, but they dispense with the attitudes you often get at nicer hotels. From bellhops to the valets to the front desk staff, I’ve always had attentive, professional service that somehow manages to still feel human and fun. They seem to love what they do, and it shows.
- Guest-centric policies: One great example is that dogs are allowed at all of their properties with no additional charge. They have a chalkboard in the lobby that welcomes their “canine” visitors, and they provide treats and dog bowls with every visit. They make you feel welcomed, it doesn’t add $45 to the cost of your stay, and you’re not confined to the dander-coated “pet room” at the end of the hall on Floor 2.
- Commitment to good food and drink: All Kimpton hotels have restaurants that you’d actually want to dine at, with featured chefs that are respected in their cities. You’re not paying $15 for a cheeseburger unless it’s a gourmet burger actually worth the price. They also host complimentary nightly social hours featuring local wines and beers.
- A loyalty program that makes you want to remain loyal! Just for signing up (no minimum stays required), you get free wifi and a $10 “raid the minibar” coupon with every stay. Imagine that! A minibar you’re not scared to open, and Internet that’s not $24.95 per night. It’s almost like they want you to enjoy your stay and come back!
I feel a bit like a paid Kimpton spokesperson writing all of this, but isn’t that what a good brand is supposed to do? Make its customers want to talk positively about it? Kimpton is admittedly much smaller than the bigger brands in the category, but they provide evidence that a hotel brand CAN mean something that Millennials (or anyone) would want to identify with.
Going forward, we can only hope the Hiltons, Starwoods, and Marriotts of the world are taking notes.
Marty Predd, 29, is a Senior Research Associate, with Brand Amplitude, LLC, a consumer research firm specializing in Millennials and decision-making. He lives in Portland, OR and travels internationally and domestically for both business and fun. In the past 3 years, Marty has visited Peru, Japan, Iceland, Ireland, and Australia. He frequently receives airline upgrades from Delta.
