- Paula Such, Consultant, Logic Information Systems
The New School of Marketing: What do Millennials Want?
Each week, in the Marketing section of every magazine or blog in the world, there is always an article written about how to appeal to the Millennial generation. Figuring out this elusive group is considered the “new school” of Marketing - no other generation has been quite like this one.
The Outdated School of Marketing: What does Each Generation Want?
Did you ever wonder, “Who creates and decides what defines a generation?” For example, the Greatest Generation (who fought in WWII) was named so by Tom Brokaw. The Baby Boomers was adopted by the U.S. as a cultural term, defined by a punctuated time frame in history, and is also the last generation the Census Bureau officially recognizes. Everything after that is less defined and lumped in 20-year increments. Now, these definitions are mostly used by media and marketing departments as a way to group together ages, however, it speaks nothing to the collective behavior of that age group (theatlantic.com). If the generation naming process is outdated, why do we continue to place such emphasis on it? This is harmful because:
- Customers aren’t grouped in a way that will truly speak to their purchasing behavior, i.e. attitudes, behaviors, socio-economic/marital status or pain points. What if I’m a Baby Boomer in age but have Millennial shopping tendencies? What if I’m a rather affluent 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 Portland? Is there a customer segment for them in your marketing plan?
- Overall trends are not being considered. Think of how much urbanization and technology has changed everyone’s shopping behaviors. For example, city dwellers of all ages use delivery apps as a way for food/grocery delivery. And Millennials aren’t the only ones who like seamless integration between store/website inventory - the busy, working mother is also a fan.
- Behavioral changes cannot be grouped as easily once the generation matures. 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 any generation really be grouped together for marketing purposes?
Let’s use me as an example:
- 38 years old, female, African-American; business professional; married, no children; renter, city dweller; prefers experiences over material things; prefers to rent vs. own (music, movies, clothes, machinery); prefers quality over quantity; shops with brands that have a purpose (fair-trade or local); use mobile to purchase items, rarely completes purchases online/PC; can perform any task through WikiHow articles and instructional YouTube videos; uses Uber/Lyft more than my actual car; goes to the grocery store, but uses Munchery or AmazonNow for food delivery; believes there’s an app to make any process more efficient; and drinks quality red wine.
Tried & True Strategy: Marketing to Customers by Behaviors
Taking it back to Marketing 101, let’s look at the most tried and true strategy: the 4 P’s of Marketing. Some A.D. 2017 examples include:
Promotion. Create a marketing strategy by behavior, preference, socio-economic or marital status and pain points:
- Competitive edge. 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?
- Adoption rate. Are they Innovators (always the first to buy new technology or trends), Early Adopters, Early Majority, Late Majority, Laggards (ondigitalmarketing.com)?
- Stage in life. For example, Teens are always fickle, 20s typically have more discretionary income and care about their outward image, 30s have families and mortgages with less discretionary income and are looking for value, etc.
- Personalized experience. At Nordstrom and Sephora, they now use chat bots for a customer-centric experience that appeals to a younger customer. And for the customers who don’t know what chat bots are, both also have effective loyalty programs where members can earn money back or be invited to exclusive special events. And many other companies use purchase history and other points of data to create more targeted customer segments or better in-store experience.
Place. Make it convenient by letting customers shop how they want:
- Seamless experience of shopping at both eCommerce and brick & mortar stores through various combinations, i.e. buy online pickup in-store, shop in-store then ship from warehouse, etc.
- Kiosk check-out like the new Amazon grocery store format
- Clothing rentals like Rent the Runway
- Showrooms or deliver samples to home like Warby Parker
- Contactless payment like Apple or Samsung Pay and Starbucks app
Price. After the Great Recession, the majority of buyers are looking for quality and value.
- Transparency. Websites like Everlane or DSTLD are working directly with high standard manufacturers to product quality product 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.
Product. 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. Some blame it on Millennials, but I believe it’s the beginning of an overall customer shift.
- Fast-fashion. Zara has always had a model of producing a small batch of styles and quickly re-ordering then shipping what sold the best. Consumers have reacted positively to this model vs. traditional retail production of ordering items 3-6 months out.
- 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.
The 4 P’s of Marketing is this how most people decide where they will shop. Millennials maybe driving a new way to shop like shopping 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.
“Here is When Each Generation Begins and Ends, According to Facts” http://www.theatlantic.com/national/archive/2014/03/here-is-when-each-generation-begins-and-ends-according-to-facts/359589/
“The 5 Customer Segments of Technology Adoption” http://www.ondigitalmarketing.com/learn/odm/foundations/5-customer-segments-technology-adoption/
Costco winning with Millennials and Gen Z” http://www.supermarketnews.com/retail-financial/costco-winning-millennials-and-gen-z