Marketers Eye Up and Coming Millennials
As a target market, the millennial generation is often misunderstood, experts say.
Many marketers have the impression the so-called "echo boom" generation is demanding, pampered and feels entitled to a certain standard of eating. "They are characterized as nurtured, protected, optimistic, confident, sociable, achievement-oriented, tolerant, tech-savvy, team players and impatient multitaskers who expect, and demand, to get what they want," says Janet Oak, senior director of consumer strategy and insights at Daymon Worldwide Galileo Global Branding Group.
But generalizing about a group that numbers 86 million in size and spans two decades of birth years can be problematic. College-age millennials see the world through a different lens than those who launched their careers before the financial crisis of 2008, says Bob Shaw, founding partner of Concentric Marketing in Charlotte, N.C.
While younger generations of Americans typically are optimistic about the future, a new report from Concentric Marketing indicates millennials have "a more pessimistic and insecure outlook" than America has seen for decades.
Still, marketers are paying attention to millennials because their purchasing power is expected to rise significantly in the future. A report by Jefferies and Alix Partners estimates millennials will spend about $50 billion more per year on food at home in 2020 than they did in 2012. The increase in spending will occur as millennials obtain higher-paying positions and start families.
Ethnic Foods and Flavors
One of the most noticeable differences in the millennial generation from other generations is its desire for a larger variety of flavors and ethnic foods."This is a group that is much more open to trying different things, as well as more exotic flavor palates. It's a group that grew up with a lot more choices" than other generations were given, Shaw says.
Research from Edelman Digital suggests millennials eat out 3.39 times a week on average, more than any other generation, exposing them to diversity in the types of foods they eat. And Concentric's research indicates three out of four college-age millennials report regularly consuming Mexican food, followed by 60 percent who regularly eat Italian and Chinese. Further, 27 percent say they eat Japanese food regularly, followed by 23 percent who consume Thai and 17 percent who regularly eat Indian food and Greek food.
But Concentric's research, published in August, suggests in many other ways, millennials, and particularly college-age millennials, don't live up to stereotypes about the generation and instead resemble their baby boomer parents in spending habits. Among the findings:
—Despite the notion that millennials are less brand loyal than other generations, the research suggests many college-aged adults are following in their parents' footsteps when selecting brands and choosing healthy foods. They also are loyal to brands they consider reliable. Further, 49 percent say they stick with brands they trust.
—Brands and products from their childhood often influence them. More than 40 percent buy brands recommended by friends or relatives. And 39 percent of college students surveyed say they prefer to learn about new products from family, compared with 28 percent who say they are motivated by coupons. At the same time, 55 percent prefer to learn of new products from friends, and a whopping 85 percent say they are likely to tell friends about products they like.
—They prefer organic and natural products, and those attributes are more important in young millennials' purchase decisions than whether a product is linked to a social cause.
—They regularly consume 3.5 different types of ethnic foods on average, but say product origin and purity of ingredients are more important than exotic flavors when deciding what to purchase.
—Despite their reputation for being heavy users of social media, 78 percent of millennials surveyed report following four or fewer brands on social media and 39 percent say they don't follow any brands. Among the brand followers, about 40 percent say they want to hear from the brands no more than once a week.
—About 60 percent of millennials say they enjoy shopping at traditional grocery stores and mass retailers, compared with fewer than 10 percent who say they like shopping at convenience stores and fewer than 6 percent who said they like shopping at drug stores.
For more on marketing to millennials, see the upcoming feature in Retail Leader's August magazine.