The New School of Marketing: What do Millennials Want?
I see an article in the Marketing section of every magazine or blog every week about how to appeal to the Millennial generation. The quest to profile and quantify this elusive group is seen as the “holy grail” of modern Marketing – no other generation has been quite like this one.
The Outdated School of Marketing: What does Each Generation Want?
So you may be wondering to yourself, “Who decides what defines a generation?” Those who grew up during the Great Depression and fought in WWII were named “The Greatest Generation” by former NBC Nightly News anchor Tom Brokaw. The term “Baby Boomers” was adopted by the U.S. as a cultural term defining a surge in births following the return of the G.I.s who fought in WWII. It’s defined by a specific time frame, and is also the last officially-recognized generation by the U.S. Census Bureau. What follows is less defined, groups of people lumped together by date of birth, divided into 20-year increments.
Today, these definitions are predominantly used by the media and marketing departments as a way to segment and group the target audience by age. The downside of this method is significant: it speaks nothing to the collective behavior and experiences of the individuals who fall within a specific age group.
So if the generational-naming process is outdated, why do we continue to place importance on it? We can see a laundry list of complications with this method of segmenting buyers in this way:
Your customers aren’t defined by their purchasing behavior.
Since generations are defined in arbitrary terms by birth date, your customers aren’t grouped in a way that will truly speak to their attitudes, behaviors, socio-economic status, life stage / marital status or personal pain points. What if by age I’m defined as Baby Boomer but my shopping tendencies more closely resemble a Millennial? What if I’m an affluent, single Gen Xer who lives downtown? Does the “Millennial” software programmer in San Francisco really have the same purchasing habits as the “Millennial” liberal arts graduate barista in Kansas City? Is there a customer segment for them in your marketing plan?
You aren’t taking overall trends into consideration.
Think of how much urbanization and technology have changed shopping behaviors for all of us. For example, city dwellers of all ages use delivery apps as a way of life to order a quick bite or get their groceries. And Millennials certainly aren’t the only ones who enjoy seamless integration between store and website inventory—the busy, working mother is also a big fan.
It’s difficult to adapt age-based groupings as a generation matures.
Behavioral changes cannot be easily-defined as individuals enter new life stages at different rates. Will Millennials always crave experiences over things once they move out of the city and into the suburbs? Are Gen Xers as easy to target now as they were before? At any point in life, can the behaviors of all individuals who fall within a generation really be grouped together for marketing purposes?
Let’s take me as an example. My traditional customer profile might look like this:
- 38 years old, Female, African-American
- Business Professional
- Married, no children
- Urban-dweller, rents home
- Uses mobile to purchase items, rarely completes purchases via PC
However, a more behavior-based profile would reveal the following details:
- Prefers experiences over material posessions
- Prefers to rent vs buy (movies, music, clothing, machinery)
- Prefers quality over quantity
- Shops with purpose-driven brands (fair trade, local, etc.)
- Uses instructional WikiHow and YouTube to learn to complete almost any task herself
- Owns own automobile, but is a frequent Uber / Lyft user
- Does shop at the local grocery store, but also uses Munchery and AmazonNow to have groceries delivered
- Believes there’s an app to make any process more efficient
- Enjoys quality red wine
So now that we’ve identified the flaws in this outdated model, what’s next?
Tried & True Strategy: Marketing to Customers by Behaviors
Referring back to Marketing 101, let’s take a look at the most proven strategy: the 4 P’s of Marketing. Some A.D. 2018 examples include:
Create a marketing strategy by behavior, preference, socio-economic or marital status and pain points. In the age of available data, it’s easier than ever before to segment and group customer data into meaningful segments which can speak to individual particular purchasing triggers.
- Competitive edge: What is yours? Low price and great value? A brand that promotes a certain lifestyle? Best assortment in a category or class? Great customer service? Fun store experience? Efficient and saves time? Know what you’re good at, what your customers crave, and go all-in on delivering to their expectations.
- Technology Adoption rate: Are they Innovators (always the first to buy new technology or trends), Early Adopters, Early Majority, Late Majority, Laggards? Knowing how tech-savvy your customer-base is are can help you select your methods so you don’t send mobile-based promotions to a customer who doesn’t own (or like to use) a smartphone.
- Stage in life: Certain age-based stereotypes tend to hold true, but they are generally more closely-tied to life stage and lifestyle: Teens are always fickle. 20-somethings typically have more discretionary income and care about their outward image. People in their 30’s and 40’s often have families, mortgages, and less discretionary income so look for value, etc.
- Personalized experience: Nearly everyone wants something that’s tailored to them – it saves customers time filtering out irrelevant offers and makes for more successful promotions. Rejecting a one-size-fits-all approach, Nordstrom and Sephora now use chat bots for a customer-centric experience that appeals to a younger customer. And for their customers who don’t know what a chat bot even is, both brands still connect with customers by also having effective loyalty programs where members can earn money back or be invited to exclusive special events. And most major brands use purchase history and other points of data to create more targeted customer segments or better in-store experience.
Make it convenient by letting customers shop how they want.
- Unified Commerce: Retailers simply must offer a seamless experience of shopping at both digital and brick & mortar stores through various combinations. Whether it’s buy online pickup in-store, or shop in-store then ship from warehouse, convenience is key.
- Kiosk check-out / pick-up: like the new Amazon grocery store format or the “Pickup Towers” being tested by Wal-Mart
- Subscription Boxes / Services: from clothing rentals a la Rent the Runway, Stitch Fix, and Trunk Club, personal products like Birchbox, Harry’s razors and Scentbird to food and meal prep boxes like Hello Fresh, Blue Apron and Plated – the convenience of box delivery cannot be understated.
- Showrooms / sample-delivery: Many times people need to touch and feel objects in order to make a purchase decision. Products that once seemed impossible to sell online have found success thanks to home-delivered samples like Warby Parker’s eyeglasses or Bonobos’ showrooms.
- Contactless payment: Forgot your wallet? Not a problem, solutions like Apple/Android Pay or the Starbucks app let you shop currency- and card-free.
With the Great Recession still fresh in recent memory, many buyers are looking for quality and value without compromise.
- Transparency: Digital brands like Everlane or DSTLD are working directly with high-standard manufacturers to produce quality products at a fair price. Some sites go as far a listing the cost of how much it takes to make the item along with the retail price a customer will be charged.
- Crowdfunding: Websites like BetaBrand use crowdfunding for new items to raise money to manufacture it and exclusive offers to those customers who have donated.
As more and more becomes available online, how can your curated assortment stand out?
- Branding: In the U.S., a lot of brand names that were popular before the mid-2000’s are not doing as well now. Customers are identifying more with brands that stand for social or environmental justice instead of wearing what everyone else thinks is cool. Some blame it on Millennials, but I believe it’s the beginning of an overall customer shift.
- Value: Transparency is becoming a big trend – innovative retailers are disrupting the industry by sourcing quality merchandise directly from the manufacturer to the consumer.
- Buy now, wear now: Customers are not shopping for products ahead of season like they used to and retailers must now plan for this too.
In short, the 4 P’s of Marketing is how most people determine how, when and where they will shop, and what they will buy. Millennials maybe driving a technology-based new way to shop anywhere at any time, but I do believe it’s in-line with one of the things most people always look for in a shopping experience: convenience. It’s just another means to the unchanging end. If you truly want to target the correct market for your company, don’t waste your time re-creating the wheel – just go back to Marketing 101 and make sure you have the tools and processes in place to support it.