While some big brands still do well with Millennials, others are struggling. According to a study by digital ad agency Moosylvania, almost all of the top 50 brands are large companies. For example, the top three brands winning with Millennials are Nike, Apple, and Samsung. Yet there are some brands struggling to reach this target and are finding that their brands are losing relevance amongst this group. Budweiser, for example, has found that 44 percent of 21 to 27 year olds in the U.S. have never tried a Budweiser. Wanting to maintain relevance, Procter & Gamble has initiated a sampling strategy it calls Point-of-Market-Entry (POME) to drive customer acquisition at the most relevant entry point; the pertinent example here is with its Gillette brand targeting young men at the point they start shaving.
Winning with Millennials goes beyond simply building brand awareness. Relevancy is critical, and Millennials are deemed to be a demanding bunch. They expect more from brands and employers. Consider these points:
- Transparency. Millennials want to trust brands and seek authenticity and transparency. Yet, according to a March 2014 Pew Research Center study, Millennials are the least trusting when compared to other generations. Just 19 percent of Millennial respondents agreed that “most people can be trusted.” This suggests that not only do people, but companies and brands, as well, have to work hard to earn trust with this group.
- Do Good. Millennials value companies that give back and do good for society, both in terms of where they work and also where they buy. Millennials want to be associated with companies that give back to social causes. For example, according to a Deloitte Millennials study from January 2014, “50 percent of Millennials surveyed want to work for a business with ethical practices.” And a Brookings Institute Report quotes a 2013 Cone Communications study as having “found Millennials to be the generation most focused on corporate social responsibility when making purchasing decisions.”
- Value. Millennials are cash-strapped. Median incomes for twenty-something’s are lower today than in past decades, according to a study by Harvard’s Joint Center for Housing Studies. Almost 80 percent of this group has debt, with 55 percent owing more than $10,000. Greater than 10 percent of U.S. Millennials ages 20-24 are unemployed (Bureau of Labor Statistics). And for these and other reasons, more Millennials are living at home at this stage in their lives compared to generations of the past. All this to suggest why these young adults appreciate brands that offer value. Don’t take this to mean a brand can skimp on quality; it’s quite the opposite. The Moosylvania report also states that Quality is the most important factor to Millennials, with 75 percent of respondents in their study saying High Quality Products matter.
Newer brands that seem to win with this cohort practice what we’ll call Millennial Branding, offering a mix of Transparency + Do Good + Value. Good examples are:
- Everlane – a clothing retailer based in San Francisco that champions transparency in the manufacturing process (ensuring good manufacturing practices with its factories) and retail margins (communicating a transparent mark-up), while offering quality, basic fashions at a value for its shoppers.
- Warby Parker – an eyeglass manufacturer and retailer that took a direct-selling approach to the market, which allowed it to sell cool glasses at a value, while also offering a one-to-one, do good model, a la Toms shoes.
- Toms – And then take Toms itself, which sells reasonably priced, fashionable shoes while supporting its many causes.
This Millennial ethos is one that will demand that companies and brands sell more beyond product function. Brands must build trust through more transparency and giving back, while also making it affordable for Millennials to participate in their brands.
Consumer Forecast: Help me feel good about where and how I spend my money; I want more meaning than the simple transaction between business and consumer.
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