NEW YORK — Looking to “break the myths” about millennials, and help marketers and brands effectively engage with them, Nielsen has released a new report, dubbed “Millennials: Breaking the Myths of this No Strings Attached Generation.”
Millennials are big business. Defined by Nielsen as those between 18 years and 36 years of age, millennials are 77 million strong in the United States — on par with baby boomers — and account for 24% of the country’s population. Their incomes may still be on the rise, but this group’s size and age range equate to impressive purchasing power in the long term.
“According to Forbes, millennials spend up to $200 billion annually. All told, millennials are shaping the present and owning the future with more purchasing power and decision-making ability than ever,” said Beth Brady, president of Nielsen segmentation and local market solutions. “So, in order to make the most of this $200 billion opportunity, we would suggest the following four-step process: Identify your best consumers within millennials, develop products and content to meet their needs, engage them through effective and efficient marketing, and activate your plan through superior sales execution.”
Millennials still are climbing the income ladder ($25,000 median income for younger millennials and $48,000 median income for older millennials), so while they may want the latest and greatest products, they need to be savvy and thrifty. In light of this, their spending often exceeds baby boomers in drug stores, warehouse clubs, supercenters and mass merchandisers.
“When it comes to spending money, millennials are more likely to live paycheck to paycheck, but still want the latest and great products. So, they tend to make impulse purchases. They make fewer shopping trips than their older counterparts, but they spend more per trip — $54 versus $46 per trip for baby boomers. Millennials are strong mobile and online shoppers, but e-commerce still makes up only 6% of overall retail sales in 2013,” Brady said. “As for their deal-seeking behavior, while millennials may not be clipping coupons the way baby boomers do, they are still focused in on shopping deals. Deals account for 31% of their shopping dollars, and the top 20 apps are either retail or discount focused, with Amazon Mobile and Groupon topping the charts.”
Nielsen also noted that millennials are likely to spend more on a product from a company that has programs that give back. When they buy, they care about a brand’s social impact, making them receptive to cause marketing.
When developing products for millennials, Nielsen stressed that they desire authenticity, niche, personalization and customization.
“If they like your product, they will share their opinion, and their vast social network is likely to take notice. However, beware of crossing them because that same vast social network can turn on a dime, and recovering from bad press is expensive and difficult,” Brady said.
But how do you reach them? According to Nielsen, millennials spend less of their time watching TV. In fact, millennials make up 50% of no-TV households, relying instead on their smartphones and laptops to watch content on YouTube, Hulu and Netflix.
And when they do watch TV — likely event-related programming like Sunday Night Football or Comedy Central — they also are engaged with social media, commenting on what they like and dislike.
Additional highlights from the report include:
- Diverse, expressive and optimistic: Millennials are characterized by more than just their age. As a group, they’re more racially and ethnically diverse than any previous generation. They value self-expression and artistic pursuits. They’ve been hit hard by the recent turbulence in the economy, but their high education levels and optimism foreshadow their potential for future success.
- Driving a social movement back to the cities: If they’re not still living with mom and dad, millennials are fueling an urban revolution looking for the vibrant, creative energy cities offering a mix of housing, shopping and offices right outside their doorstep. They’re walkers, and they are less interested in the car culture that defined baby boomers.
- Struggling, but they have an entrepreneurial spirit: The Great Recession has hit them particularly hard. They’re dealing with high unemployment, low income and high student loans as they try to establish themselves. However, some millennials have hit it big by investing in startups and following their own entrepreneurial pursuits.
- Connected and want the personal touch: Technology defines millennials. They sleep with their mobile phones and post status updates from the bathroom. When interacting with companies via social media, they value authenticity. They want to feel like they have a personal, direct interaction with the brand, and in return, they’ll advocate and endorse that brand.