Recently, ideas about marketing to millennials have become much more sophisticated. When marketers were confronted with this cohort, many of them relied on the stereotype of the bumbling, urbanite hipster with a short attention span to formulate their campaigns. Today though, it is better understood that Generation Y, literally America's largest generation (75.4 million), is not a homogenous group. For one thing, there has been research showing that the wide age span in this group (18-34) creates marked buying differences between the younger and older millennials, which warrants different marketing strategies.
Today, marketers are forced to look at real segmentation, based on age, culture, income and family structure. In addition to segmentation, marketers must ensure that their first-party customer data is accurate and integrates all data sources (for example CRM, customer service calls, online sales, social media, etc.) In addition, third-party data is also tremendously important as it adds context on motivations and beliefs that help marketers understand their target group.
Yet even though the marketing world is moving toward a more educated approach to millennials, there are some stereotypes that persist. Below are three myths about the millennial consumer that should be examined in order to run successful programs.
Myth No. 1: Millennials are not loyal
One source for this idea is the fact that millennials are often cited as being tremendously picky. However, Generation Y is capable of tremendous brand loyalty to brands that present quality products and good customer experiences. In fact, according to Experian Marketing Services' Mosaic USA, a household-based consumer lifestyle segmentation system, one segment described as older millennials with mid-scale incomes are actually 2.5 times more likely than the average consumer to want attention from brands, customer service, quality relationships and loyalty. Millennials tend to be quick to contact customer service if a product doesn't work or live up to expectations, but if the problem is resolved, they will reuse the product or service in question.
In addition to emphasizing product quality in campaigns, make sure the experience of the brand lives up to its promise. Customer service is very important to brand loyalty and the customer service teams must have the most up-to-date customer data available through the company's channels.
Myth No. 2: Millennials will only shop online
While the most plugged-in generation is known for extensively researching products online, they have not abandoned brick and mortar shopping. According to Experian's Mosaic, the group of millennials that falls into what Mosaic classifies as "promising families" -- young couples with children in starter homes living child-centered lifestyles -- visit brick and mortar stores 84% more often than the average consumer.
What they are doing is using stores in a whole new way, with an emphasis on having a social experience. This group sees stores not just as places to buy things, but also as places to hang out. Retailers, including Urban Outfitters -- with a large store in New York including a coffee shop, photo booths and a hair salon -- are starting to make the most of this trend. Of course while in-store, this group is researching products online, and posting to their social networks at the same time, and may ultimately buy online later.
Deploying an omni-channel strategy is essential. Each channel -- in-store, online and social -- must provide great experiences and work together seamlessly. The prevalence of smart phones means that shoppers will be engaging with the brand on a number of channels at one time and these must be consistent.
Myth No. 3 : Millennials are cheap
Marketers worry that consumers ages 18-34 aren't worth a significant portion of their budget. While it is true that the fact that this group came of age during the financial crisis has impacted their habits, there is evidence that as they begin to earn more, they are spending more as well. Millennials like discounts and loyalty programs, and will buy online and pick up in stores to save on shipping. Gen Y is full of strategic shoppers who are likely comparison shopping by showrooming (and webrooming). In fact, according to Mosaic, younger up-and-coming singles living big-city lifestyles (known as the "urban edge" segment) are the most likely to use the internet to plan shopping trips and save on shipping, 85% more likely than the average consumer.
Despite spending less than the national average compared to their Gen X and Boomer counterparts, they're actually obsessed with trying new products. Not only are millennials the largest group of consumers, they're also characterized as being try-sumers.
Millennials aren't cheap -- they're strategic. They respond very well to value, and like products that have long-term staying power. And they love to try new products. For retailers this means focusing on ways to engage these consumers so they can try out your products and services. Making offers like free shipping on new products, making trial-sized products available, and providing access to products in showrooms can encourage this group to test your offerings for themselves, making the sale much more likely.