Move over, Baby Boomers. A new generation of consumers is shaking up the marketplace. The new market segment, millennials, represents Americans ages 18-33. Millennials have some distinctive characteristics that are unlike any other age bracket.
A Boston Consulting Group study focused on how Millennials are changing consumer marketing. As marketers, it’s key to understand their values, motivations, communication styles and preferences.
Pew Research Center just released a report that examines millennials. Here’s an overview from the research that highlights the unique characteristics of this up-and-coming generation, and how businesses can meet their needs:
1. Millennials are disconnected with traditional institutions.
Traditional institutions like political or religious groups are not relevant to this age group. Half of millennials are likely to consider themselves politically independent, and about one-third have no religious affiliation.
As with every generation, millennials have a need to belong. As they seek to fulfill this need, they will connect with the non-traditional institutions found in social networks and brand communities.
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2. Millennials have more financial hardships.
No other living age group has faced as much student loan debt, unemployment or poverty as this generation. But in spite of the financial hand they’ve been dealt, millennials are optimistic. “More than eight out of 10 say they currently have enough money to lead the lives they want or expect in the future,” according to the Pew report.
The shared economy of swapping, borrowing and crowdsourcing will impact the marketplace. Businesses need to create new strategies to embrace these types of transactions.
3. Millennials are waiting to get married.
Only about one-quarter of millennials are married. This is staggering when you compare it with previous generations, like 48 percent of Baby Boomers and 36 percent of Generation Xers who were married by 32. Two-thirds of unmarried millennials claim they want to be married, but are waiting for a stronger sense of financial security.
This shift impacts the market significantly, both in the amount of consumer dollars spent and how businesses develop products and market them to single-income households.
4. Millennials are racially diverse.
Forty-three percent of Americans are not white. This is largely because of the droves of Asian and Hispanic immigrants who have been coming to the United States for the past half-century.
This ethnicity shift dramatically impacts how marketers understand the complexities of multicultural demographics. Traditional market research will not be a simple a “black and white” approach. Non-traditional data based on social networks and social influence scores will provide more insight into each consumer’s beliefs and preferences. Brands that understand the importance, preferences and buying power of Hispanic and Asian millennials, and adapt accordingly, will benefit greatly.
5. Millennials are less trusting.
Only 19 percent of millennials say people can be trusted.
This lack of trust is astonishing compared with the 40 percent of Baby Boomers who believe people can be trusted.
Businesses must address this trust issue to gain a competitive advantage. Two big trends that businesses are following to harness more trust are social responsibility programs and using social media to engage in meaningful conversations that lead to relationships.