Written by Jeff Weidauer, Vice President of Marketing and Strategy, Vestcom International
Monday, 22 October 2012 15:09
The term “Yuppie” was coined at just about the time the Millennial generation was born. Both made the scene about 1980, and in many cases Millennials are the children of those young, urban professionals whose aspirations led to the coining of the term.
The Baby Boomer generation has been the defining group for marketers for more than 40 years, first making themselves known in the late 60s as anti-establishment, determined to change the rules and make the world a better place. The Millennials are less political, but every bit as concerned with making the world a better place, although they tend to be less idealistic and more cynical than their counter-culture forebears.
Enter now the Yemmie, or young, educated, millennial mom. She will be the model going forward as the baton is passed from Boomers to Millennials, assuming the role of defining a generation for marketers. Education will play a critical role as Millennials are on track to be much more educated than Boomers overall, and higher education historically translates to higher income and greater spending.
At the same time, Boomer incomes are declining, creating a gap beyond the age difference alone. Typically, starting at age 25, income levels grow substantially and then drop significantly after age 60. Millennials are entering their top earning years as Boomers are moving on to retirement.
There are numerous other differences between the two groups: Millennials on the whole are far more diverse in terms of ethnicity and beliefs than the Boomers. Comfort with technology is a major factor — Millennials have never known a world without the Internet. And while price is important to both groups, Millennials are more interested in price as part of the overall value equation as opposed to Boomer interest in just a low price.
Despite these differences, there are common traits between the two. Both generations are looking for custom or unique experiences. This was a defining trait for Boomers, and continues in the Millennials. Brands are important to both groups, but the Millennials are less likely to buy their parents’ brands, and are also less brand loyal overall. No matter which generation we’re talking about, moms lead decision-making across the board and control most of the buying decisions.
Both generations are looking for healthier food alternatives, and both feel that processed food is less healthful than fresh. Changes in labeling will be driven from both groups, with “natural” likely to be the first victim. With no clear legal definition, the term has lost any real meaning. Recent legal challenges in California are making life difficult for manufacturers, especially those who took advantage of the lack of clarity for the word. According to The New York Times, some of the tobacco litigation-era lawyers are looking for their next victims, and food manufacturers are right in the crosshairs. The outcome here will affect all generations.
Lest one think that it’s all over for the Boomers, at least one new study advises that it’s far from a done deal. While Boomers spend the most on healthcare and pharmaceuticals (not unexpected), they also outspend Millennials on technology, and dominate purchases in 199 out of 123 CPG categories. Additionally, they also hold 70% of the disposable income in the U.S.
All this means that as a retail marketer, both groups are important—critical even—and will remain so for some time. The challenge is how to be relevant to one without alienating the other. While that might sound like the impossible dream, it’s actually quite achievable given some forethought and knowledge of the target markets in question. There’s an upside as well of gaining favor with the often-overlooked Generation X, which falls between these two mega-generations, with the result that they get lumped in with tail-end Boomers or leading-edge Millennials.
With all this information in mind, below are some tips for marketing to Millennials that won’t scare the Boomers off.
Make digital and mobile part of the standard media mix. This is a big one, and tougher than it might seem. The recent Olympics were a great example of how “not” to market with mobile: few television spots—despite megadollar budgets—made the connection from TV to smartphone to consumer, or even to online for that matter. Incorporating mobile and online is best done at the beginning to make it seamless for the user, and unobtrusive for those not interested.
Make health and wellness a major plank in your marketing platform. Obesity and its related diseases are still on the increase, and educating shoppers about how to eat more healthfully, especially with a clear value component, will reap rewards with all. Consumers are increasingly distrustful of CPGs so there’s an opportunity for retailers to connect here through information and transparency.
Focus on the emotional connection with shoppers. Nostalgia is a well too-often visited in this pursuit, and it won’t work with this audience. A better route is sustainability, health as discussed earlier and family. Living well for less has a broad appeal, and can be used effectively to connect with all age groups.
Related to health and wellness is a focus on drug/pharmacy and supplements. As Boomers age and Millennials have children, these categories will become more important, and the element of trust can’t be overemphasized.
Finally, put the greatest emphasis on current shoppers. While most retailers spend the majority of marketing funds on acquisition, focusing on retention will pay off more quickly. This means keeping abreast of changes in behavior and being willing to adapt and adjust as needed, all with an eye toward cross-generation communication.
The transfer of power from Boomers to Millennials isn’t going to happen overnight, or even over a couple of years. It’s likely that we will be tracking this change for most of the next decade, into the 2020’s. The sooner we establish common areas on which to focus, the more successful we will be as retailers to manage the transition and keep both groups engaged over the long term.