Millennials are financially strapped and fickle. But at 50-million-strong, this generation of 18- to 34-year-olds is a force to be reckoned with, of course, expected to spend some $65 billion on consumer-packaged goods in the next decade. But where are they shopping and what are they buying?
SymphonyIRI took a look at the generation in its latest Times & Trends report based on its second-quarter MarketPulse research, a continuing survey series that studies and analyzes shopper attitudes, perceptions and actions affected by the economy -- which as everyone knows ain't faring so well lately.
Millennials have been harder hit than other generations, with a jobless rate of 12% in 2011, compared with 9% for the general population, according to government data cited by SymphonyIRI. And in the last 18 months, millennials have taken a more cautious outlook than other age groups -- which is not a good sign for marketers trying to sell them things. (The silver lining: 28% of millennials feel that their finances have improved in the past year, compared with 18% for the general population, according to SymphonyIRI.)
Ad Age picked through the report, spotting these key trends:
Millennials are homebodies: The sagging economy is fueling a do-it-yourself mentality. One in three millennials are taking a "self-driven" approach to beauty care, for instance, opting for at-home products vs. a trip to the spa or salon. They are eating at home more than other groups, too. And 38% of millennials say they "self-treat" when possible to avoid costly doctor visits.
Drugstores are winning: Traditional grocery stores remain the top shopping option, just like for other generations, capturing 47.9% of spending on CPG products. But millennials favor drugstore chains -- such as CVS or Walgreens -- more than other groups and their popularity is growing. "They are close to home ... and easy to get in and out of ," said Susan Viamari, editor of the report. And "they are expanding their assortment of foods and beverages and convenience [and] grab-and-go items." Meantime, convenience stores have struggled because they are viewed as more expensive and have a limited assortment, she said.
Price beats brand loyalty: When shopping, price is the top consideration for millennials, which mirrors other generations. But here's the bad news for marketers: This generation is not as brand loyal as their parents, with 70% listing previous product usage and "trust of brands" as a major factor, which is less than the general population. But there might be an opportunity for more in-store marketing. That's because 38% of millennials are influenced by signs or displays, compared with 28% of the general population. Notably, in-store circulars seem to be holding their own, with 51% of millennials listing them as a major factor, which actually outpaces the general population.
Smartphone apps beat mobile ads: Not surprisingly, the influence of new media is two to three times higher for millennials than for average shoppers. But what is the best vehicle? Millennials are 262% more likely to be influenced by smartphone apps than the general population, which scores higher than mobile ads (194%) and online ads (121%).
Calcium is king: Everyone says they want to eat more healthfully, of course. But how does this translate to daily habits? Among millennials, 49% buy dairy and calcium-rich foods on a weekly basis, scoring higher than exercise (40%), eating whole grains (34%) and getting plenty of fruits and veggies (22 %). No wonder Greek yogurt is hot.
Favoring the fast and flavorful: A lot of millennials don't have the cash to eat out for lunch. That means they spend more on prepared refrigerated lunches, such as Lunchables. They are also into "instant gratification," Ms. Viamari said. So "this group would be less likely to do what other generations might do, and that would be make a sandwich from scratch or create a salad to take with you." Other foods that score well with this group are toaster pastries, Mexican food, cold cereal, spaghetti, frozen pizza, yogurt, frozen appetizers and Asian food.
A preference for pampering: Just because they don't go to the spa as often does not mean millennials don't spoil themselves -- they just do it at home. Indeed, they spend more than the average shopper on hair care, sun care, cosmetic products and body scrubbers and massagers. Just imagine what they might do if the economy ever improves.