There has been talk for some time about the emerging millennial generation, and how they are impacting the marketing and retail environment. I recently came across a great research report that outlines the market potential of millennials: Trouble in Aisle 5. While many companies have been waiting for this demographic to emerge, there is data to support it is finally happening.
While the report focuses on grocery shopping – this report also clearly shows companies that are focused on this generation now are probably going to reap the rewards in the future. While many millennials are just starting their careers, many companies and brands have not fully realized the economic potential from this group to date. However, some key stats are going to change this very soon.
Why the chart above is significant: research has shown that median incomes for households 25+ jump 60% to $45,000 from $28,000. In 2010, there were 5.5% of millennials in the age bracket of 25+. By 2020 – that number will increase to about 20%. Having a population increase in size of over 15% in 8 years, while also growing incomes around 60% is a huge shift companies cannot ignore. Those who are capturing this demographic now are probably already being rewarded, and will be rewarded even more so in the future.
The report outlines some key trends for Millennials:
- Millennials are less loyal to specific brands/retailers: it appears they buy what they want, when they want, wherever they want: Building loyalty now will be key to sustained growth in the future
- Millennials appear much more focused on lowest price rather than brand loyalty, but at the same time are much more willing to pay for specific attributes: If not a price leader, focus on positioning and perceived value
- Millennials place high value on convenience in shopping for food: If convenience is a key selling point of your product or service, highlight it often
- Higher income and education levels, driven by the emergence of the YEMMie (Young, Educated, Millennial Mother)
- Brands do matter more for top-earning millennials — these just might not be their parents’ brands: If your brands are showing declining sales and low acceptance by millennials, it may be time to re-position your brand
These trends were also highlighted in a recent NPR Report.
Good insight for the project’s this semester!