It seems as if marketers have a category and catchphrase for every group of Americans, from the baby boomers to Generation X to Generation Y. That last group, more commonly known as the millennials, consists of people currently aged from about 13 to 30, and they're causing those same marketers to fall all over themselves in the quest to find out just what millennials want.
It's a good question, and the answer is worth billions. Current estimates put the size of the millennial generation at just under 80 million, on par with the baby boomers, with predicted purchasing power approaching $2.5 trillion within a year or two. With that kind of money at stake, it's no wonder businesses are taking the time to get to know the millennial generation.
Companies are really going out of their way for these shoppers, who already have a reputation as being somewhat changeable, as if in a constant state of self-discovery. They're difficult to pin down, and they're known not to be terribly concerned with brand loyalty. That's why sites such as MillenialMarketing.com have sprung up, offering marketers insightful e-books with snazzy titles such as Millennials: How They Are Different and Researching the Millennial Mind. Companies such as Macy's (NYSE: M ) and Kohl's (NYSE: KSS ) , however, have come up with their own brands of millennial marketing, and both are just starting to put their ideas into practice.
Retailers vie for a piece of the millennial pie
Macy's recently announced its three-year plan to market products that appeal to millennials in an attempt to snag some of the estimated $65 billion that these shoppers might want to spend at Macy's each year. Specifically, the retailer is planning to spiff up its current MStyle Lab and Impulse sections, both of which cater to the demographic. The planned changes are quite extensive and entail things like employing more social media, "identifying lifestyles," and catering to shoppers' love of product branding. Of course, going after branding is the exact opposite of what other marketing data shows Macy's should do, but the company will still give it a whirl. As the store's announcement stated, implementation is going to take a few years.
Kohl's, meanwhile, is launching a new line of clothing, based on the American Idol reality show. I've never watched the program, but my impression is that it's made up of contestants from hither and yon, each presumably dressing in his or her own signature style -- as diverse as the millennials themselves. At any rate, the new collection is called Authentic Icon and is available starting this month through the end of June -- the same time span as the television show's 11thseason.
Automakers have to try even harder
Carmakers aren't immune to the spending power of the millennials, either. GM's (NYSE: GM ) Chevrolet unit is trying its darnedest to come up with designs that appeal to this generation but is finding them a bit difficult to pin down. What's worse, they don't look at any brands today with particular enthusiasm. They are interested in cars, though it seems far less so than former generations.
Still, GM is so desperate to connect with these prospective customers that it has contracted with MTV Scratch, a Viacom (Nasdaq: VIA-B ) arm that specializes in helping companies understand consumers. The contractor has devised a five-year plan for GM to reinvent itself to more reflect the tastes of the young, from transforming portions of the showroom and lobby to incorporating more outlandish colors.
Despite GM's commitment to the challenge, there's evidence that it just might not work. A survey commissioned by Zipcar (Nasdaq: ZIP ) last year showed that the new generation of would-be car owners, aged 18-34, are driving less each year. While the majority cited high car ownership costs as a big factor, more than half said that protecting the environment also influenced their decision to spend less time on the road. Millennials also are into sharing, or collaborative consumption, which bodes well for companies like Zipcar, which estimates that more than half of its membership base are millennials. That finding certainly jibes with the survey results, in which 53% of respondents said they would be interested in a car-sharing service.
Are businesses listening?
Companies that really want to know what millennials want need look no further than the Zipcar study, which is loaded with information about much more than their thoughts on transportation. For example, the fact that these young people are gravitating toward cities should have implications for clothiers, as well as home-furnishing vendors. The collaborative concept also applies to home and vacation-home sharing, which has significance for timeshare and home-swapping enterprises.
On the transportation issue, Zipcar is the clear winner here, both with its business concept and its willingness to discover what the millennials have to say. If GM and other carmakers want their business, they need to realize that redecorating sales-floor space to look like a teen hangout will do far less to endear them to this group than to give them what they want: cars that get great gas mileage and have less environmental impact. The millennial generation is observing the world and making life decisions based on what it sees as important -- and that is really the lesson that marketers need to learn.
One thing that came out of the Zipcar survey is that millennials love social media and mobile tech. Get some great tips about investing in this sector by ordering our free report now. It won't be available forever, so get your copy while it's still available by while it's still available.