Millennials—defined for eMarketer purposes as those ranging from 18 to their early 30s in the US—are individuals who are generally not yet settled into lifelong patterns of consumer behavior. Coming of age amid the Great Recession, they are apt to seek low prices rather than favorite brands, according to a new eMarketer report, “Millennials in the Marketplace: A Generation Moving on Its Own Unpredictable Path.”
US millennials number some 73 million, and collectively have much purchasing power. A comScore report this past year, covering people born between 1981 and 2000, pegged millennials’ annual outlays at $170 billion.
They don’t feel free and easy about spending that $170 billion, though. As an example of this, Q3 2012 polling by IRI found 45% of the 18-to-34 cohort (vs. 27% of baby boomers) agreed that they “buy brands on sale vs. preferred brands” when shopping for CPG items. A later IRI survey, in Q4 2012, found millennials particularly active in using digital coupons—accessed from a wide variety of sources—to economize on CPG purchases.
True to stereotype, millennials are a digital population. Their heavy usage of digital media—including social networking, video viewing and gaming—reflects their extensive ownership of digital devices. None is more important than the smartphone. eMarketer estimates that 95.2% of US millennial adults will be mobile phone users by the end of the year. Among this group, nearly three-quarters are expected to use smartphones.
The smartphone is a crucial tool in millennials’ shopping, partly because it helps them get the most from their tight budgets. They shop and buy online. But because they enjoy shopping in stores (and in groups), ecommerce is a rare digital activity where millennials do not overindex vs. older internet users.
Search is an important component of millennials’ shopping process, giving advertisers an opportunity to reach them through that channel. And according to an August 2012 survey by Harris Interactive for The Search Agency, US internet users in the 18-to-34 age bracket were much more likely than older respondents—30% vs. 18%—to have clicked on ads in search engines.
With interactive tools at their disposal, millennials are disinclined to be passive recipients of marketing. Instead, at least some of them want to feel they are active participants in shaping the brands that engage their attention. That was evident in Edelman Berland’s polling when it asked global respondents ages 18 to 33 how they wished to be entertained by brands. The top answer, given by 40%, was “allow me to influence your product (co-creation).”
That is in sync with what Jeff Fromm, the executive vice president of marketing agency Barkley, has been seeing. “Millennials want to co-create products and services,” he said. “They want to co-create customer experiences, and they want to co-create marketing.”
The full report, “Millennials in the Marketplace: A Generation Moving on Its Own Unpredictable Path” also answers these key questions:
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