Of all the scary financial news in the past few weeks, the scariest for marketers are the dire 4th quarter retail sales predictions. Yesterday the WSJ ran an article, “Neiman Marcus Sees Bleak Holiday: Luxury-goods Retailer Reports a Doubling of Its Quarterly Loss and Warns the Wealthy Are Cutting Back“. If that’s not scary, I don’t know what is, especially since, until recently, luxury goods were retailing’s bright spot. Only last week (9.15.08) the WSJ had a story titled “Fashion in a Faltering Economy“. Here’s an excerpt I found especially amusing:
Neiman Marcus fashion director Ken Downing praised the edgy “’80s moment” he saw on several runways, a trend long absent from stores and one he felt would look fresh to shoppers. At Bloomingdale’s, fashion director Stephanie Solomon expected “rich hippie” looks to appeal in spring.
Excuse, me? I don’t recall the 80′s ever having an “edgy moment”; “rich hippie” sounds like an oxymoron if there ever was one; but I digress.
With all the doom and gloom, it may be interesting to see what is known about Millennial’s fashion shopping habits. First of all, they don’t shop in department stores, for a score of reasons, among the most prominent being that is where their moms shop. Millennials much prefer smaller, more boutique like shopping venues, even if they happen to be chains that act like boutiques such as Abercrombie, American Eagle, or Limited. The photo above shows my friend, Melissa and one of her friends having a birthday shopping spree on Melrose, far from Nordstroms, Macy’s and JC Penney. According to BIGresearch, Melissa is pretty typical: 31% of 18-24 year olds say they shop most often for clothing at a specialty retailer, compared to just 16% of those 25 and older. This month, Fortune picked 3 specialty apparel retailers as their ‘five retail winners’:
American Apparel: The Los Angeles based apparel chain sells basics with a twist: Its advertisements tout both the company’s high quality, hipster-friendly tees and its fair-wage policies. Such meticulous branding has not only distinguished the retailer from Wal-Mart, but has also enabled American Apparel to boost profits 42% this quarter to $6.8 million and same-store sales by 23%.
American Outfitters: Urban Outfitters, which also owns clothing retailers Anthropologie and Free People, increased revenues by 30% this quarter to $454 million and boosted same-store sales by 13%.
Aeropostale: Aéropostale reported a 43% increase in profits in 2Q, and an overall sales increase of 21%, to $377.1 million. Even more shockingly, the New York based chain saw same-store sale growth of 13% this July, compared with a decrease of 12% in July of last year.
Not all specialty retailers are doing as well as these three; Abercrombie & Fitch and Urban Outfitters have both suffered small losses, which Fortune speculates as having to do with higher prices/lower value.
When Millennials do venture into the world of mass merchandising, Target is far and away their favorite. We have discussed the reasons for Target’s status as Millennial darling in previous blog posts, so won’t rehash here, other than to point out that BIGresearch data provides confirmation: twice as many 18-24 year olds say they shop Target most often for clothes than those 25 or older.
Macy’s is thinking of revamping its famous Cellar of housewares in its flagship Manhattan store to appeal to younger shoppers: “By giving teens a separate entrance and their own place to hang out – similar to creating a rec room in the basement – Macy’s is hoping kids will feel less self conscious about shopping where their parents shop.” (Fortune, 9.24.08, “Macy’s searches for the fountain of youth“). This might work, if like Target, American Apparel and Urban Outfitters, they emphasize value as well as ambiance. Millennials have money but they don’t think of themselves as affluent. Sniffing out the bargains AND the fashion is more than half the fun.
There’s universal agreement that the youth vote is critical to the outcome of the 2008 election, but how engaged are Millennials? Engagement is a tricky thing to measure, but just released data (9.23.08) from Pew Research sheds some light. First, the table shows a strong trend among 18-24 year olds for going ‘newsless’; 34% say they watch no news on a daily basis, up from 25% in 1998. (Presumably news on the Comedy Channel doesn’t count as ‘news’, although I’m not sure.) While over 9 out of 10 18-29 year olds say they intend to vote, only 7 out of 10 say they ‘definitely plan to vote’ and less than two thirds say they voted in their precinct last time they had a chance, and only 4 out of 10 say they ‘always’ vote. These figures are even lower for ‘cell phone only’ respondents.
Given these figures, it’s clear why the candidates are focusing on social media to engage young voters. Obama is doing far better than McCain, but the gap is closing. According to Hitwise, Obama gets about 56% of the total candidate web site traffic. As of Sept. 9, Obama boasted 510,799 MySpace friends, compared with McCain’s 87,652 friends, a more than 5-to-1 lead in number of friends, but down from a 7-to-1 advantage in August according to Live Research. Obama also has a sizeable leads on Facebook with 1,726,453 supporters to McCain’s 309,591. Obama’s Web site has twice as many videos posted to his official YouTube channel and far more YouTube channel subscribers, by an 11-to-1 margin. But what is surprising to me, is that these figures aren’t higher, given the penetration of these media among young people.
The Stanford Daily, in an article yesterday titled “Just How Political Is This Place?”, quotes Evan Purcell ’09 as saying “it’s diffcult to stay informed; politics isn’t a big social presence here.” My daughter at Notre Dame reported the same lack of interest when I asked how students were responding to the Palin pick. “Mom, we’re in a bubble.” While I am sure some campuses, like George Washington University in DC, are more passionate about politics, neither candidate should overestimate the ‘engagement’ of today’s young voters in the election — at least for now.
As a parent who spent way too many hours last year with the Princeton Review of Colleges Guidebook, the idea behind Unigo.com is compelling. Why rely on statistics, the college web site, a campus tour and a few anecdotes, when you can hear everything direct from the students themselves? That’s the idea behind Unigo.com which launches this month just in time to help the class of 2013 pick a college. The idea combines many concepts familiar and dear to Millennial’s 1) No one is as smart as all of us 2) All the information, all the time 3) unfiltered and unedited 4) free. What’s not to like?
Here’s how the New York Times (9.19.08) describes Unigo’s utility to a prospective student:
“Every student who joins Unigo has a user profile, and while that profile might not feature his or her real name, the idea is that by garnering a few pieces of personal information — your major, your hometown, your race, sex and political leanings — a database is created that makes it possible for newcomers to search the site by all kinds of hyperspecific criteria. You can see how many other people from your own high school are looking at a particular college. You can contact the author of a review with follow-up questions. “You can say, ‘I only want to see reviews of Harvard by African-American students,’ and have a choice of 20,” Goldman projected, “or by English majors, and have a choice of 50. So you can not only see a more comprehensive version of the school than you can anywhere else, but you can also see the school through the eyes of someone who’s just like you.”
The Beta site is still a little dysfunctional, but the promise, is enormous. The idea of video testimonials is compelling, you can hear the ‘virtual’ tour on an official web site, then hear the unofficial tour on Unigo. With my ties to Notre Dame, I will be especially interested in seeing this video described in the NYT article: “Two girls at Notre Dame, one an official campus tour guide, visit several spots around campus: at each one, the tour guide gives you the approved spiel, and then her friend tells you what the spiel leaves out.”
And all week long your River City
Youth’ll be frittern’ away,
I say your young men’ll be frittern’!
Frittern away their noontime, suppertime, choretime too!
– Professor Harold Hill, aka, The Music Man
Substitute “Twittern’” for “frittern’” and you’ll see “either you’re closing your eyes to a situation you do now wish to acknowledge or you are not aware” of the impact of the 24/7 media world Millennials inhabit. Ever wonder why Millennials always seem so tired? It’s because they are nocturnal, surrounded by what the New York Times last week described as ‘ambient social awareness’(“Brave New World of Social Intimacy” 9.5.08). Facebook, MySpace, YouTube are ways to extend the social conversation beyond the hours when most face-to-face social conversations take place. The party continues — online.
I admit I have dabbled in this world. I have strangers following me on Twitter and I am following strangers. I use LinkedIn and Facebook. But I feel like a stranger in a strange land; it is not my natural habitat and I see them as time stealers, not productivity enhancers. That is one of the main differences between my generation and Millennials. Millennials, and those who share the digital mindset, find the blurring of online and offline realities completely natural–and productive.
Marketers are starting to catch on. Last week, I noted several hefty articles on ways to leverage Twitter as a business building tool. My favorite is by Steve Mulder, (“Five Marketing Tips for Attacking Twitter“, Mediapost, 9.1.08). He explains why this is important:
Numbers are hard to come by, but TechCrunch reports that Twitter has more than 1 million users (200,000 of which are active every week), and about 3 million messages are posted every day. These are still relatively small numbers, but the activity comes from an early-adopter segment that can be hard to reach using traditional marketing channels.
Mulder points out that brands that use Twitter as a way to extend a brand’s personality have an edge over those who are just pushing information. He points to Zappos as a good example.
Will I ever get it? I am not sure. But I plan to try. Now it’s time to get some sleep!
Taco Bell announced this week it is extending its “Feed the Beat” Indie Rock Band promotion for its late night “Fourth Meal” for a third year. My thoughts on why this is a smart promotion were mentioned in Ad Age today. Why do I think it’s smart? Well, it’s reasonable to assume after two years, they must have a pretty good idea that the promo works. How could it not? This seems to hit multiple Millennial sweet spots all at once:
1. Simple and Undemanding. The rules are simple: register for $500 worth of late night coupons and a chance to a chance to be promoted by a record producer next spring, no strings whatsoever.
2. Immediate gratification. Winners will be announced in October.
3. Social. Bands have fans. Fans like to eat, too. Winners will be selected via online vote, which will encourage the bands to activate their networks.
4. Indie Rock Bands. Music is a top passion for Millennials, as blogger Charlie Moran points out in the Ad Age article.
5. Late Night. Millennials live 24/7 lives, as the time stamping on most papers they turn into me for class attests. A “Fourth Meal” makes sense to them. As I mentioned to Emily York, the Ad Age reporter who contacted me, “it’s particularly savvy because members of that generation have round-the-clock opportunities we didn’t dream of at their age.”
Taco Bell’s marketing investment in this promotion is modest: 100 bands X $500 in late night coupons ($50K), URL for registration and voting, placement on sauce packets, PR. The return is potentially great, if only in registered band member names and voters! The PR potential is big and very well-targeted. It all seems to point to a potentially huge ROI, as well as some terrific potential for brand-differentiation. I predict we’ll see this promotion extended a fourth year.
Want to reach Millennials? Don’t assume you can only find them online. According to MRI (Fall 2007), 18-24 year olds are more likely than older adults to be in the top 40% of Radio listeners and Magazine readers. (See chart)
Many magazines are more than twice as likely to be read by 18-24 year olds than by adults in other age groups. Cosmopolitan enjoys penetration of 21% among this age group (and most likely even higher penetration of among just women). Magazines other than Cosmopolitan with penetration among both genders of over 10% include: Maxim, ESPN the magazine, Seventeen, Vibe, Rolling Stone, Glamour, US Weekly, Babies and Bridal (in that order). Other magazines indexing over 200 (2x higher than average) include Sports Illustrated, Game Informer, Entertainment Weekly, Vogue, Cosmo Girl, American Baby, Allure, In Touch Weekly, Men’s Fitness, Game Pro, Teen Vogue, Modern Bride, Fuse, WWE Magazine, Elle, PC Gamer, Marie Claire, Penthouse, Latina, Lucky, Spin, and Dirt Rider. Likewise, radio is a natural choice for mobile Millennials.
This is good news for marketers. While newspapers, TV and outdoor are all problematic, there are good traditional media alternatives other than the Internet for reaching young adults. The ability to target narrowly by interest makes radio and magazines a great deal for Millennial marketers, and worth a second look.
Victoria’s Secret’s PINK brand is hot. With sales approaching $1 Billion, it is growing faster than VS overall according to Ad Age (7/7/08). PINK’s Facebook Group boasts 509,478 fans, one of the largest on the site. This fall, PINK started directly targeting the collegiate crowd with a COMPREHENSIVE approach that leaves no stone unturned, with apps for your facebook page, style guides, videos of favorite bands, logowear from 33 universities, video personality profiles, events (PINKAPOLOOZA) text messaging sign up, free customizable goodies for your myspace page or computer, insider blogs, a maglog, cause marketing, a $5 planner promotional offer — even horoscopes. Nothing was left out. And the overall sense is that they won’t stop here, there’s lots more to come. (I was interested to note that Notre Dame is not one of the participating schools, you can see a list click here; be sure to click Roll Call to hear the charming Behati from Namibia read the school names to you, definitely worth watching).
Overall, the site feels more like a social network than a comercial site, and that apparently is the intent and its appeal. I admit I found 30 minutes of total entertainment. It makes college look so COOL! Who wouldn’t want to be part of this scene? Cool is apparently is the goal, according to Sara Tervo, PR Director:
With fickle teens jumping from one fashion brand to another, it’s a balancing art to stay relevant and “cool” in the eyes of this consumer group. “What VS Pink does is it listens to the customer, pays attention to the fashion trends, and stays true to the brand,” says Tervo. (PR Week, 2/11)
Brands who want to approach the college market would do well to look at VSPINK.
