Many generalizations have been made about millennials, but few are true, said I.R.I. Worldwide, Chicago. Marketers must understand this diverse consumer group to capture a slice of the estimated $290 billion millennials will spend on packaged goods in the next five years.
“At 79 million strong, the millennial generation has a tremendous amount of spending power that is growing rapidly,” said Robert I. Tomei, president of consumer and shopper marketing for I.R.I. “This is the largest generation of young people since the baby boomers, and I.R.I. has studied millennials extensively to provide a comprehensive look at their personalities, values, basic beliefs and actual purchase behavior. Our segmentation allows marketers to better understand millennials, assess their current position and develop strategies and programs to more effectively target them. Marketers have a tremendous opportunity to capture growth by directly connecting with this increasingly important segment of the population. For instance, marketers can leverage a full understanding about millennials’ needs to drive their product innovation strategy, improve the allocation of their media spend and enhance the alignment of their marketing and sales programs.”
In its latest research, I.R.I. identified five myths about millennials.
Myth No. 1: All millennials are self-absorbed.
Not necessarily, said I.R.I., which found 90% of millennials equate success with being a good friend and 58% equate success with being of service or contributing to the community. Additionally, more than two-thirds of millennials equate success with working for a cause they believe in, compared to 56% for Generation X and 58% for baby boomers, according to I.R.I.
Myth No. 2: Millennials avoid the traditional path.
While many millennials may behave differently than their boomer parents, they are embracing traditional values and norms on their own time and terms. For example, 73% of millennials are employed, 28% are married, 37% own a home and 38% are parents. The timeline of millennials’ life stage milestones isn’t as linear as that of older generations, I.R.I. said.
Myth No. 3: Millennials are constantly glued to their mobile devices.
Though this generation of digital natives is tech-savvy, not all are connected around the clock. Nearly half of millennials said they could function without their smartphones, and less than a third regularly use a mobile app to purchase products.
Myth No. 4: Millennials are not loyal to brands.
Contrarily, many millennials show loyalty to brands they deem worthy but also enjoy finding a good deal. Just over half of millennials choose quality over price when purchasing a product. Still, two-thirds have limited grocery budgets and are value-conscious by necessity, I.R.I. said.
Myth No. 5: Traditional marketing doesn’t resonate with millennials.
Millennials are strongly influenced by social media and on-line resources, but nearly two-thirds use loyalty cards or discounts and coupons, and half of millennials respond to store circulars, all of which are traditional marketing tactics, I.R.I. said.
Rather than group all millennials into one bucket, I.R.I. found six distinct segments:
1. Free Spirits, who represent 13% of millennials and are young, single, college-educated, impulsive and social;
2. Struggling Wanderers, who account for 21% of millennials and are not highly educated or tech-savvy and struggle financially;
3. New Traditionalists, the 22% of millennials who are educated, affluent, married and fiscally responsible;
4. Concerned Aspirationalists, who represent 13% of millennials and are cash- and time-strapped moms driven by convenience and price and devoted to social media;
5. Conscious Naturalists, the 15% of millennials who are environmentally conscious moms who prefer locally grown and minimally processed foods, are cautious with money and less reliant on technology; and
6. Confident Connectors, the 17% of millennials who are ethnically diverse, socially conscious, digitally savvy and drawn to specialty stores.
“Millennials are the most racially diverse, highly educated generation in history,” Mr. Tomei said. “Their path to purchase isn’t a straight line, so marketers need to keep this in mind and get creative. This means paying attention to their specific needs, ensuring they have the right product mix and customizing their media and messages to be relevant to those needs.”