Thinking in the aggregate about people born roughly 15 years apart is an inane exercise – a marketing construct of the dumbest order.
Millennials, like the Boomers they echoed, are an 80 million strong generation; stereotyping 80 million people is just stupid.
Market segmentation based on demographics is the least actionable or meaningful ways to segment consumers – period!
Because they have no money. They have no job. The largest percentage of them still live at home with mom and dad footing the bills. Those that don’t have roughly $36, 000 in student loan debt at roughly 6% interest and are scheduled to be paying on it for the next ten years. Where does their money generate demand and power? Wal Mart!
Because no demographic group’s purchasing behavior remains static over time. Already we are seeing behavior changes since nearly 28% of Millennials are now getting married. And we all know getting married and having kids changes your perspective on everything, let alone buying stuff. These changes will continue as Millennials get older, have more kids, grow their income, pay off/accumulate debts, etc…
This is the ‘lifetime value’ delusion. A while back, the wrongness of this argument was exposed in a study published by the journal ‘Science’.
“A team of psychologists released a study which discredited what we call ‘Lifetime Value’ and the scientists call ‘the end of history illusion’ i.e., the illusion that things will remain as they currently are and we will stay like we are now.
According to one of the authors of the study we simply do not realize ‘how transient our preferences and values are…’
And if you think that targeting millennials today means you’ll have them for life, here’s some news. A study recently reported that 80% of millennials looked for the lowest price possible when shopping, and that 60% are more inclined to bypass their favorite brand if a cheaper alternative is available.”
So much for brand loyalty.
I’m not saying you should ignore Millennials anymore than you should ignore a guest that walks into your business for the first time, that isn’t your typical guest. What I am saying is that you need to determine the context for your targeting regardless of how big any demographic group is or how much purchasing power they are purported to have. Not everyone’s a guest or a potential guest.
What demographic should you target?
There are now 101 million people over 50 in America. In just 5 years, half of all American adults will be over 50. They are the core of our economy and politics. They are the group that determines the success and failure of most business.
- People over 50 have about about 70% of all the wealth in the country.
- People 55-64 have…”a median household income of $69,000, dwarfing that of those under 25 ($27,000) and 25-34 ($58,000)…”
- They are responsible for about half of all consumer spending
- They buy 62% of all new cars
- Baby boomers spend an average of $650/month on technology, more than either Gen X or Gen Y
- Despite the fact that many are retired, they still have 55% higher annual income than some other adult demo groups.
- And on average they have a net worth about 3 times that of the rest of the people
- They dominate 94% of CPG categories.
- They are the internet’s largest demographic constituency.
- In 2010 people over 45 outspent people under 45. By one trillion dollars.
- They are much easier and much cheaper to reach than any other demographic group.
- And, according to Nielsen, they are the target for 5% of all advertising.
Here are 18 statistics that’ll help you get a handle on millennials:
- Numbering roughly 77 million, millennials make up about one-fourth of the US population (Nielsen).
- 43 percent of millennials in the US are nonwhite, the largest share of any generation (Pew Research Center).
- One-fourth of millennials in the US speak a language other than English at home (US Census Bureau).
- Millennials in the US wield about $1.3 trillion in annual buying power (Boston Consulting Group).
- The median income for millennials in the US who are year-round, full-time workers is $33,883 (US Census Bureau).
- More than 85 percent of millennials in the US own smartphones (Nielsen).
- US millennials touch their smartphones 45 times a day (SDL).
- 87 percent of online adults in the US age 18 to 29 use Facebook, with 53 percent on Instagram, 37 percent on Twitter and 34 percent on Pinterest (Pew Research Center). That age group represents a large chunk of millennials.
- Five out of six millennials in the US connect with companies on social media networks (SDL).
- The top five favorite brands of millennials in the US are Nike, Apple, Samsung, Sony and Walmart (Moosylvania).
- Millennials in the US are seven times more likely to give their personal information to a trusted brand than to any other brand (SDL).
- One-third of older millennials (ages 26 to 33) have earned at least a four-year college degree, making them the best-educated group of young adults in US history (Pew Research Center).
- Just 26 percent of millennials in the US are married, compared with 36 percent of Generation X, 48 percent of Baby Boomers and 65 percent of the Silent Generation at the same age (Pew Research Center).
- 66 percent of millennials in the US follow a company or brand on Twitter and 64 percent like a company or brand on Facebook to score a coupon or discount (University of Massachusetts Dartmouth).
- 56 percent of millennials in the US would share their location with companies to receive coupons or deals for nearby businesses (USC Annenberg Center for the Digital Future).
- 51 percent of US millennials would share information with companies in exchange for an incentive (USC Annenberg Center for the Digital Future).
- Only 6 percent of millennials in the US consider online advertising to be credible (SocialChorus).
- For 95 percent of millennials in the US, friends are the most credible source of product information (SocialChorus).
What Paul Says:
“Millennials are selfish and extremely self-centered. Their narcissistic little self-absorbed egos are constantly in a state of “Look at me!”
My thoughts on Millennials touch on their over-sensitivity, their insistence that they are right despite the overwhelming proof that suggests they are not; their lack of placing things within context; the overreacting; the passive-aggressive positivity; their reflexive collapses into victimhood and sentimentality; their inability to receive and respond accurately to criticism; their willingness to allow emotion to trump reason and fact — or even bother to learn reason and fact; and their tendency to become paralyzed when the least bit of darkness appears on the event horizon of their lives.
They wilt at the first sign of ‘criticism’ and are unable to engage on a level that doesn’t involve a ‘Like’ button.
When they say things, it’s as though they don’t understand the content — only the words. There was an article on LI which was titled something like, “All Millennials Do This”, and then within the article itself, instructed the reader not to lump all Millennials together. As he did.” Typical.
The issue for me with all the stats about Millennials is that they are all based on perceived outcomes and not actual outcomes. In other words, they haven’t done anything yet. They lack results.
So while trying to wrap your head around all of these numbers, keep this idea in mind from market research company Mintel which pretty much sums up all of my thinking on the subject:
“Companies or brands that successfully market to millennials are ones that recognize that there is no such thing as a ‘millennial’ — just individuals or groups of individuals who are at a similar life stage and have lived through similar experiences. They want to be treated for who they are, rather than be lumped together and labeled.”
The Big Fat Lies
Big Fat Lie #1: People over 50 are downsizing
Here’s the reality.
- Between 1999 and 2009, spending by people 55 to 64 grew 45%.
- People aged 55-64 outspend average consumers in virtually every consumer products category.
- People 55-64 buy 30% more new cars than people 25-34.
- People 75 to dead buy more new cars than people 18-34.
Big Fat Lie # 2: Older people are dying out
The reality: Between now and 2030, the population over 50 will grow at about 3 times the rate of adults under 50. We are not losing our old people, we are losing our young people
Big Fat Lie # 3: By advertising younger, you automatically reach and influence people over 50
Advertisers believe that by advertising to 25-49 year olds we will reach the 50+ market as “spill.” But a study done recently showed that a typical media plan directed at 25-49 year olds had a 50+ component of only 15%. It is not just the media thinking that is wrong, it is also the message.
According to The New York Times, the generation gap is wider than at any time since the 1960’s.
- 2/3 of people over 50 say they are less likely to purchase a product if they find the advertising offensive. And guess what?
- the same 2/3 say that advertising has become cruder and more offensive.
Big Fat Lie # 4: People over 50 are “stuck in their ways” and will not switch brands
The reality is baby boomers are just as likely as young people to try new products.
- 61% say that “in today’s marketplace, it doesn’t pay to be loyal to one brand.”
- Guess what the number is among people 18 – 41. Exactly the same.
Big Fat Lie # 5: People over 50 want to be like young people.
This may be the oldest and perhaps the most damaging of all the Big Fat Lies.
Do older people want to be youthful? Yes.
Do they want to be like young people? No.
This is a crucial distinction which seems to be completely lost on so many marketing types.
Big Fat Lie # 6: Millennials Demand Brands Be Socially Responsible
In a discussion Millennial Views on Microsoft, it became clear that not only did price and solution matter more than anything, Millennials saw Apple’s bad corporate behavior as part of a the price of living in the West.
Reinforcing this point is the popularity of Wal-mart with Millennials; whether due to the big box’s mobile and ecommerce investments, or simply because of the sharp pricing, Millennials are Wal-mart’s strongest demographic.
Big Fat Lie # 7: Millennials Are Tech Savy
Most Millennials are”gadget savvy.” They can pick up a piece of technology and figure it out on their own, for the most part because they grew up learning how to use tech. Agreed.
But I challenge the idea that being gadget savvy = technological gurudom. Being able to USE a piece of technology is entirely different than being able to build it or the programs on which it runs.
Some points from the Level Playing Field Institute:
- The World Economic Forum ranks the United States 52ndin the quality of mathematics and science education, and 5th (and declining) in overall global competitiveness [link]
- The United States ranks 27thin developed nations in the proportion of college students receiving undergraduate degrees in science or engineering [link]
- There are more foreign students studying in U.S. graduate schools than the number of U.S. students [link] and over 2/3 of the engineers who receive Ph.D.’s from United States universities are not United States citizens [link]
This is the schooling that the US Millennial generation experienced.
Big Fat Lie # 8: Millennials Have Enormous Spending & Political Power
As I’ve tried to point out already, the straightforward truth is that Boomers still control the purse and political strings in the US.
Check out these states from an Immersion Active post:
- 78 million Americans who were 50 or older as of 2001 controlled 67% of the country’s wealth, or $28 trillion (U.S. Census and Federal Reserve).
- Boomers’ median household income is 55% greater than post-Boomers and 61% more than pre-Boomers. They have an average annual disposable income of $24,000 (US Government Consumer Expenditure Survey).
- Adults 50 and older own 65% of the aggregate net worth of all U.S. households (U.S. Consumer Expenditure Survey).
And as of December 2014, the US political structure looked like this:
- US Senators: 27 are from the Silent Generation, 64 are Boomers, and 8 are from GenX
- US Governors: 6 are from the Silent Generation, 41 are Boomers, and 3 are from GenX
- US House of Representatives: 46 are from the Silent Generation, 320 are Boomers, 63 are from GenX, and 6 are Millennials.
Boomers and their elders are firmly in control of political power. Based on how long those two generations stay in their jobs, and assuming GenXers who are beginning to take seats at the political power table do the same, it will be a LONG time before Millennials are actually in control. And for now that is a blessing.
“Look, Millennials, to paraphrase Chuck Palahniuk, we are not special. We’re not a unique and beautiful snowflake. We’re the same decaying, organic matter as everyone else. We like everyone else are broke. The economic system mom and dad relied on fell apart somewhere along the way —the only difference is that they were lucky enough to have stashed something away before it all came crashing down.
We live with our parents because we can’t get jobs, even with college degrees. We don’t buy homes because less than half of for sale homes are within the reach of median Millennials. We don’t buy cars because between rising housing costs and ballooning student loan debts, we don’t really have the economic strength to add auto loans onto our financial load.
We aren’t weird. We aren’t special. We aren’t lazy.
We’re just broke.
So let’s stop asking the boring questions and start asking interesting ones.”
Agreed. So can we start asking real questions about real issues at play on real business?