‘One size fits all’ doesn’t work for Millennials

Discussion
May 02, 2016

Marketers frequently talk about Millennials as one large, cohesive group. The impression is that Millennials are all tech obsessed, custom coffee drinkers who retrofit old trends to make them new again. While this is certainly true for some, a blanket statement encompassing all Millennials is not valid. Research demonstrates there are considerable differences in behavior among Millennials, especially when it comes to shopping, and retailers need to pay attention.

For instance, according to a recent survey conducted by LoyaltyOne, the older Millennial group (25-34 yrs.) is much more self-sufficient and are the primary shoppers for themselves and others in their household, with roughly 66 percent employed full time. Unlike the younger Millennials, with 18 percent at full time employment, the older group has a greater disposable income, which equates to buying power and primary decision-making. The younger Millennials, given their lesser income, are much more price sensitive and find price three times more important than the older group.

Millennial woman shopping

This is only scratching the surface — Millennials also differ from one another in terms of their attitudes, education, culture, geographies and other demographic variables. So perhaps the right approach is to find individual customer needs as reflected in buying behavior rather than using broad demographics.

Specifically, just as with other generations, segmenting Millennials on these dimensions is the incorrect approach and retailers should be analyzing each individual customer’s behavior and creating personalized offers to influence them based upon those unique needs. After all, with 80 million Millennials, it would be rather simplistic to think that all of them are the same, especially for a generation that is so different than previous generations.

With competing needs and wants, the strategies to attract and retain Millennials will need to be tailored accordingly. Retailers need to create and utilize the best tools and analytics in order to effectively influence the varied buying behavior.

How can retailers best identify the needs of individual Millennials? What must retailers do to engage with Millennials in meaningful ways in order to earn their loyalty?

Braintrust
"Don’t get stuck on demographic labels, instead focus on how to address your target consumer based on the psychographic profile."
"Millennials break along the same lines as all other groups: education, income, lifestage and diversity."

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14 Comments on "‘One size fits all’ doesn’t work for Millennials"

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Tom Redd
Guest
1 year 7 months ago

Within my family we cover the entry-level Millennials and the old end of the Millennial pile. We also have one of them in the middle group. Bottom line is simple: many many Millennials are very different, no matter their age, based on how they were raised and how much influence their parents (usually the moms) still have over them. Our Millennial-loaded family is very influenced by the mom-factor, yes, even the boys. From kitchen to closet she has a say in how they buy.

Millennials stay attached longer to their parents (especially their moms). I estimate that Generation Z, the heavy gamers/tech generation, will standalone.

Wanna really target this Millennial generations before they marry? Go after their parents. After they marry then mom loses some horsepower and influence. When they have their first kid, she is back in the middle of the game.

Boomer moms — the REAL retail influencers!

Ralph Jacobson
Guest
1 year 7 months ago

Finally, an article that echoes what I’ve blogged in the past: All Millennials are not alike! More than 60 percent of them don’t even shop via mobile! You need to analyze your audience with the tools available in the market today that group shoppers by common categories via social, local events and other external forces that can feed this data into dashboards that improve demand forecasting accuracy. Huge improvements are being made currently with technologies that define the right audience for your promotions.

Mel Kleiman
Guest
1 year 7 months ago

The best way to find out not only what your customers want but how they want it is the same way you find out what your employees want. ASK THEM.

Quit trying to sell and manage people as a generation and learn to sell and manage them as individuals.

Roger Saunders
Guest
1 year 7 months ago

Successful retailers, as they have always done, need to listen to, watch and seek the feedback of their customer base and those of competitors who they may want to win over. Retailers don’t treat 76 million Baby Boomers the same. Nor should they try to treat 78 million Millennials the same.

Find the scaleable segments of the Millennial population within your stores and e-commerce sites. Syndicated surveys — Prosper Insights & Analytics has fielded one every months since 2001 — as well as conducting proprietary custom surveys can illuminate both the purchase behavior of Millennials and the media path to purchase of segments of Millennials. Different segments of this vital generation use/are influenced by different media forms, just as they choose to shop and purchase at different retailers — because they can and they want to do so.

Michael Day
Guest
1 year 7 months ago

Perhaps too easy to generalize and treat as monolith this 80 million strong group (who will continue to have a material impact on consumer-led retail transformation for some time).

That said, here is some more generalization: The good news for retailers here is that Millennials are/should be, compared to their parents, that much more comfortable when it comes to retailers leveraging their personal shopping data to offer customized lifestyle relevance and value, etc. In fact, it’s safe to say Millennials now expect data-driven offers that are at least directionally relevant to them.

Leveraging Social Media and customized offers should by now be table stakes when it comes to retailers driving Millennial targeted demand creation.

Carlos Arambula
Guest
1 year 7 months ago

I disagree with the second to last paragraph. The best way to learn who the core consumer is, who should be the target, is to conduct segmentation studies and build a psychographic profile of your consumer.

As the article also states, the 25-34 year old is very different than their younger cohort — I’ve seen this in multiple qualitative research and in segmentation studies. There is a vast difference in ideology, income, values, and so forth, between the older and younger Millennials.

How do you earn their loyalty? Don’t get stuck on demographic labels, instead focus on how to address your target consumer based on the psychographic profile.

Matt Talbot
Guest
1 year 7 months ago

Segmentation certainly helps with marketing and sales tactics, given that it is impossible to market to 80 million people individually. However, as the article above discusses, Millennials are a challenge — more so than earlier generations like Baby Boomers — because they can’t be grouped in large categories.

With the advent and popularity of certain technologies, like smartphones, Millennials have the ability to heavily research before purchasing. I think in order to best cater to Millennials, retailers must ensure that information (including product sourcing, reviews, and transparent business policies) are readily and easily available. Although a cost-concerned demographic, I believe no one worry will overtake the Millennials’ general interest in thorough research.

Liz Crawford
Guest
1 year 7 months ago

The biggest difference between groups of Millennials is life stage: in grad school and on campus, or married with children, or single in the city. These life stages dictate much more about needs than a blanket age bracket.

Another huge differentiator is economic stratum. The top wealthiest 5% live differently, and have different expectations, than the bottom 20%.

A third segmentation maker is ethnic background and assimilation.

In other words, Millennials break along the same lines as all other groups: education, income, lifestage and diversity.

Ken Morris
Guest
1 year 7 months ago
I agree that there isn’t a “one size fits all” approach for Millennials and that approach doesn’t really work for any demographic segment. Retailers need to evolve from the one-to-many marketing strategy to a one-to-one communications strategy. For an effective one-to-one approach, savvy retailers will personalize the communications to individuals based on “customer context.” Customer Context is the interrelated factors of customer insights and environmental conditions that make the shopping experience relevant. With access to real-time customer information, retailers can customize individual communications based on her preferences, what’s in her closet, what she previously purchased, what she browsed on the Web site and abandoned in her online cart, when she is near your store and even exactly what she is browsing and where within the store. In addition to customer insights, customer context considers environmental conditions such as current and forecasted weather, time of day, time of year, media (news), social media, traffic, holidays, events, and other conditions that impact a consumer’s purchase decision. We have an infinite market of one to cater to and… Read more »
Vahe Katros
Guest
1 year 7 months ago

If a retailer is really asking this question then it shows a quaint and honest disconnect that is highly valued, aka authentic. That’s good.

If you are a retailer, chances are you have some high quality people working for you that are “that” audience and who hopefully shop your stores or have friends that do as well. I would say you should ask them, but if the generation gap is so large or your organization is culturally challenged — you can hire an outside firm so they can “tell you what time it is with your own watch.”

It’s ok, at least you are asking. That’s good!

Kevin Kearns
Guest
Kevin Kearns
1 year 7 months ago

Though Millennials crave a good deal, they are loyal shoppers who appreciate fair, tech-savvy loyalty programs, and they are likely to remain loyal to and recommend the brands they trust. For Millennials, “trust” takes two forms: quality and responsibility. Millennials value high-quality products and fair prices. They also expect a company to be socially conscious, give back, and have a positive impact on society.

Retailers should push to leverage social media: getting a personal recommendation from someone Millennials know, even if it’s done online, is the best way to get them to purchase a new product. Personal recommendations convince Millennials of a product’s quality, which justifies its price.

Gordon Arnold
Guest
1 year 7 months ago

The Millennial generation as a whole engages the market with fewer discretionary spending dollars and the money that is available is committed to the high costs of tobacco, alcohol and smartphones. Add to this the high cost of living and transportation with lower average incomes and the need for word of mouth through social media is seen as necessary to succeed with them. Even with a strong word of mouth social support, this generation demands comparison information that is verifiable through reliable independent sources. They are very budget conscious and want the best value for the lowest sunk investment dollar, because doing without is the only other option.

Kenneth Leung
Guest
1 year 7 months ago

The key is to identify the needs of the customers by their behavior and preferences, not by their age. Rather than try to predict what the customers want by their age, retailers should segment their customers by shopping patterns and channels and target offers accordingly.

Mark Bees
Guest
Mark Bees
1 year 7 months ago

It’s true, retailers must be engaging with Millennials in meaningful ways to earn their loyalty — especially since 68 percent of them have no problem changing stores to receive more benefits. To appeal to and retain these price-sensitive shoppers, retailers can look to card-linked offers as their simple savior. According to a recent Forrester study, 78 percent of Millennials want to use coupons that redeem automatically. However, the desire goes beyond Millennials — the study shows that all age demographics are on the search for a digital deal.

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Braintrust
"Don’t get stuck on demographic labels, instead focus on how to address your target consumer based on the psychographic profile."
"Millennials break along the same lines as all other groups: education, income, lifestage and diversity."

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