Millennial consumption and communication
Young adults have long been an important demographic for established market actors. Through wooing young people, consumer goods companies and retail hoped to win their lifelong loyalty. But the question is, will this paradigm apply in the future? Young people today have very different values compared to previous generations, and are raised as digital natives in a world of computers and smartphones.
Today’s young adults are often termed “millennials”, as their formative teenage years occurred around the time of the new millennium. They’re sometimes also referred to as “Generation Order”, as their values and beliefs, contrasting the ideals of the world during their adolescence, don’t align with youthfulness and irresponsibility among adults. Instead, this generation values the “little life”, one of family, work, and a beautiful home, over “finding themselves” or adventuring. When this generation now stands on the cusp of parenthood, raising a new generation, their ideals face new challenges. What can we expect from this generation as consumers and communicators in the future?
Seven insights about millennial consumption and communication
Shallow stereotypes about different generations are abundant. Millennials are no exception. We here present seven common statements about millennials in terms of consumption and communication. Which ones are true – and which are pure myth?
1. Marketing to millennials calls for modern channels
Life, for a millennial, begins with the smartphone. The phone is primarily a social device, through which all of life’s pleasures, relationships and practical issues are managed and organized. However, it’s important to remember that it isn’t only millennials constituting a digital generation. The true shift between digital and analog occurs between those born in the early 1960s and those born after.
What truly characterizes millennials is a more sophisticated digital behavior. To reach them you need to be where they are – online, preferably via smartphone. They have several different social media channels going at once, and they select carefully and consciously which contacts they manage through which social media network. Eight of ten millennials use Facebook, but only about seven percent are active and post content of their own there. Instead, their phones are dominated by Snapchat and (to some extent) Instagram. When it comes to consuming entertainment, video is the medium of choice and YouTube the most important channel.
But merely being present on social media is not enough. Being relevant is crucial. Content must have value adapted according to the interests of the recipient – either through the subject matter itself, or delivered by a person who has won the audience’s trust. Regarding the messenger, the personal networks are unsurpassed. Millennials listen to their friends, and they have no compunctions about influencing their friends themselves. They also trust a variety of influencers – as long as they are people they can identify with, ideally someone more like a big sister than a distant and powerful authority.
2. Millennials are killing retail
It’s not only information gathering that has migrated into the online world. Millennials are on the frontline of changing purchasing patterns (even if the age of approximately 55 splits the consumer base for e-retail, as well). Millennials shop online far more frequently than previous generations, and they moreover impulse shop far less than older people. They put in more effort towards getting the most value for their money, which is another reason why they more frequently shop online. It’s simply easier to compare goods and prices on the Internet.
But the purchasing process itself has changed, too. Millennials spend more time on so-called “aspirational browsing”, that is to say, the process during which consumers make a decision on what to buy. Millennials apply a far more sophisticated method than earlier generations. They evaluate, involve their friends (via a mobile device, of course), get reassurance that the purchase is right for them, and compare prices (online) before finally making a decision.
3. Millennials – the healthy generation
To millennials, health is a true lifestyle. Health is a natural part of everyday life, and not just something done to avoid a visit to the doctor’s office. They drink and smoke less than previous generations, and they eat better (the share of vegans and vegetarians is considerably higher among millennials than among older generations). In Britain, almost half of vegans are between 15 and 34 years of age.
They furthermore exercise more regularly than older generations did at their age. In addition, they increasingly try to avoid the soul-killing standard gyms, and instead look for personal networks of like-minded exercise buddies. Or, they rely on apps to organize their workouts. Half of today’s millennials use some form of exercise app on their phones!
4. Sharing is the new black
To most millennials, there is no high status in owning an expensive car. Instead, they regard it as trendy and smart to share ownership. Owning large things is seen as inconvenient, as they require care, maintenance and storage. This development is further emphasized by the fact that a financial crisis rocked the world as the millennial generation entered adulthood. This, in turn, has contributed to a generation far more careful and cautious when it comes to spending money.
The most common sharing services revolve around housing and travel. For instance, it’s three times as likely that a millennial will use AirBnB, compared to those aged 35 and up. They use Uber or carpool solutions like SunFleet to a much greater degree than older generations.
It’s also a generation shaped by the promised land of streaming services. The Pirate Bay generation doesn’t want to pay for daily newspapers, but they are happy to pay for access to music, film and news through streaming. Half of all millennials are willing to pay for either music and/or videos. The corresponding figure for Swedes in the age group 56-65 is only eight per cent.
5. The golden age of cars is over
The car, symbol of success since the days of Henry Ford, is today being rejected by the millennial generation. In the car-loving United States, the average amount of driven miles decreased by 23 percent between 2001 and 2009 for this generation. The primary reason for the reduction was that younger people simply more seldom go by car, and when they do they travel shorter distances.
Millennials are also more reluctant to buy a car of their own. When Goldman Sachs interviewed this generation about the importance of owning a car, a full 30 per cent answered that they did not plan to buy a car at all.
6. Millennials want to have their cake and eat it too
The millennial generation wants to consume in an eco-friendly fashion, while also craving cheap high-quality products. Three out of four millennials say that they are willing to pay more for sustainable products and services, despite facing financial challenges. They also want to devote more time for their close relationships, while simultaneously wanting to make a personal impression on the world – without straining those personal relationships they value so highly.
A picture emerges, then, of a “Kinder Surprise” generation. They want several (incompatible) things in one. One strategy to make this work is a form of slacktivism: Commitment demanding only a little personal effort. Instead, they expect businesses to assume both social and environmental responsibility through their products.
7. Participation for better relation
Swedes in general, and millennials in particular, enjoy participating in creating their own products and solutions. In this way they can express their own personality while also taking part in the process of creation. This confirms what millennials crave the most: Collaboration and a sense of context. 40 per cent of them say they want to co-create products with businesses. This is especially noticeable with crowdfunding platforms, a natural means for millennials to secure financing when all other doors are closed.
Finally: 3D for direction
We can summarize the keys to millennial consumption and communication through the following three points:
- Digital, obviously – life begins with and depends on a smartphone.
- Direct benefits – no effort wasted on the superfluous or the unnecessary.
- Dialogue and openness – To be relevant for millennials calls for sharing and involving.
This article is based on a report produced for the members of the network Kairos Future Club, read more about membership here.
By Erik Herngren and Lovisa Vildö.