Why retailers should target millennial parents
New research from the National Retail Federation shows why millennial parents may be a key demographic for retailers to target.
The millennial generation, now in their mid-twenties to mid-thirties and having children, are influencing retailers with a different style of shopping than previous generations.
NRF has been tracking the shopping habits of millennials for over a decade and have been comparing them to Generation X, individuals born between the years 1965 and 1984.
Millennials lead more than half of households with children today and are an important part of the $1 trillion that U.S. families spend annually on their kids. However, compared with parents from other generations or even millennials without kids, millennial parents have a different approach to shopping for themselves and their families.
An NRF study found that unlike Generation X, millennial parents are twice as likely to have a higher education degree and most millennials earn more than the median household income of $59k a year. Millennial parents are also more than twice as likely than other parents, or even other millennials, to spend more money on experiences such as traveling, going to movies and dining out, as well as bring their kids along for vacations.
With a new target consumer, comes a new path to purchase. Millennials have all the information they need about brands and products, and even fellow consumer reviews about those brands and products. They are the generation that is most likely to read and write reviews about a product or brand experience, as well as the generation most likely to pay or place an order. According to the study, the millennial parent is all about speed and convenience, as nine out of 10 millennials have used same-day shipping.
“I don't really ever remember a time without technology,” says Artemis Berry, VP of member engagement and a millennial mom. She uses her smartphone to research products and brands, compare prices, make purchases and sometimes even uses it to help keep her three-year-old daughter entertained. As for David French, SVP of government relations and a Gen X parent, “when my kids were young, we were using the phones as phones,” he says.
However, one of the biggest differences between all millennials and generation x, is the excitement behind subscription boxes. A fairly new retail model, membership subscriptions allow consumers to explore new products and brands within a specific category. Subscription services, which offer both convenience and the chance to discover new products and brands, have a big draw for these young parents. “[Millennials] are about twice as likely to use a subscription service as other generations,” Cullen says. For French, not so much. “What’s a subscription service?” he asks.
Are there any similarities between the generations? Of course! The millennial parent attitude towards brands starts to look more and more like that of previous generations, as 54 percent of millennial parents compared to 40 percent of previous generation parents identify themselves as “very loyal” to the brands they shop. The study also found that regardless of generation, poor customer service is the top reason parents will back out of a purchase from a brand or retailer they were loyal to. However, it is also found that loyal millennial parents are a retailers strongest advocate, for 49 percent of millennial parents said that they would choose a more expensive brand or retailer they are loyal to instead of a cheaper alternative.
To read full survey, click here.