BOSTON, MA -- (Marketwire) -- 04/16/12 -- America's Millennials have been the subject of abundant research and commentary, mostly revolving around their avid use of technology, changing media-consumption habits, and entry into the workforce. A new study reveals surprising insights about this generation as consumers.
In contrast to their reputation as a lazy, entitled generation, U.S. Millennials are actively engaged in consuming and influencing, and their habits are distinct from those of earlier generations in several important ways, according to a recent survey of 4,000 Millennials (ages 16 to 34)(i) and 1,000 non-Millennials (ages 35 to 74) conducted by The Boston Consulting Group (BCG), Barkley, and Service Management Group (SMG).
"Don't believe the hype that Millennials consume less than previous generations," said Christine Barton, a partner at BCG, a leading management consulting firm. "On average, U.S. Millennials already shell out and influence the spending of hundreds of billions of dollars annually -- an amount that will only increase as they mature into their peak earning and spending years. Those companies that truly 'get' this generation will have an opportunity to differentiate themselves and forge profitable long-term relationships with Millennial consumers."
A key focus of the research was to determine how behaviors and attitudes differ between Millennials and non-Millennials and to identify differences that are truly generational and therefore characteristic of Millennials -- and not simply related to their age or relatively early life stage. The findings are discussed in a new BCG report, "The Millennial Consumer: Debunking Stereotypes," being released today on www.bcgperspectives.com. Among the key takeaways:
To a surprising degree, U.S. Millennials are a generation actively engaged in consuming and influencing. They are optimistic about the ability of business and government to effect global change.
Millennials rely much more on recommendations from peers or friends than from "experts."
Millennials are true "digital natives" who are extremely comfortable with technology and social media. Using these new tools is a natural, integral part of their life and work. They also consider themselves fast adopters of new technologies and applications.
"This is a generation that engages with brands, channels, and service models in new ways -- ways that have been instrumental in creating our current 'participation economy,'" said Jeff Fromm, executive vice president at Barkley advertising agency and the founder of Share.Like.Buy, a Millennial marketing conference. "Since these consumers are always in a hurry, it's critical to determine how you can get them to spend time developing a relationship with your brand."
The research also found that although Millennials' perceptions of themselves are generally favorable, non-Millennials tend to view them more negatively. These perceptions may be coloring how executives view the Millennial consumer, preventing companies from understanding and fully addressing the product and service needs of this generation -- and establishing strong brand relationships.
"If executives have negative and dismissive feelings about Millennials, they won't be able to provide relevant products and services that resonate with these consumers and meet their needs," said Barton, who also serves as an advisor to BCG's Center for Consumer and Customer Insight. "There is potential for differentiation and advantage for companies that not only deeply understand but also embrace this generation."
Six Distinct Consumer Segments of Millennials
The research identified six distinct segments of U.S. Millennials that could help companies improve the ways they develop their marketing, brands, and business models to reach this increasingly important audience. These segments are as follows, along with representative quotations:
While oversimplified to highlight differences, these categories reveal significant differences in the attitudes and behaviors of U.S. Millennials, a group that numbered 79 million last year and is projected to far outnumber baby boomers, 78 million to 56 million, by 2030.
"Understanding and recognizing these distinct segments and their nuances is essential for companies that hope to develop effective product offerings, marketing campaigns, channel strategies, and messaging," said Barton. "A one-size-fits-all effort will fail to connect with every Millennial segment."
Implications for Consumer Companies
So what does all this mean to companies and their brands? For some, a fundamental reinvention may be in order. For instance, brands that target teenagers, college students, or young adults may have to be rethought for each successive generation. In other cases, companies may need to figure out how to introduce their brands to Millennials at the appropriate life stage. And for others still, reaching Millennials may simply require more relevant and resonant marketing messages. Some brands -- such as Nike and Sony -- are favorites among U.S. Millennials and non-Millennials alike, and must try to remain so. Others, such as Target and Apple, appear to have an edge with Millennials.
"Some may argue that the peak spending years of the Millennials are far enough in the future that companies can take their time in developing well-targeted, appealing products and services. But we believe that staying on top of Millennial trends is critical because they will ultimately influence today's big spenders, the 35- to 74-year-old non-Millennials," noted Chris Egan, COO of SMG, a customer experience analytics agency.
The Millennials survey builds on earlier research by BCG, Barkley, and SMG on Millennials' media, shopping and social habits, released in August 2011, as well as a BCG report released late last year on the economic impact of aging.
To download a copy of the Millennial report, please go to www.bcgperspectives.com.
To speak with one of the authors, please contact Alexandra Corriveau of BCG at 212-446-3261, firstname.lastname@example.org, Christie Garton of Barkley at 816-423-6158, email@example.com or Joe Sciara of Service Management Group at 816-841-5683, firstname.lastname@example.org.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 75 offices in 42 countries. For more information, please visit www.bcg.com.
Barkley is one of the largest employee-owned agencies of its kind. Founded in 1964, the agency offers a full range of marketing communications services including advertising, public relations, cause branding, sponsorships and events, relationship marketing, social media, design, media planning and buying, motion graphics, research and interactive marketing. Barkley has offices in Kansas City and Pittsburgh with additional field offices across the nation. For more information, visit: www.barkleyus.com, www.barkleyREI.com, and http://www.sharelikebuy.com.
About Service Management Group
Service Management Group® (SMG) is the leading customer experience analytics agency that improves multi-unit performance for global retail and restaurant brands. The company captures and critically appraises the customer and employee metrics that deliver financial results. By helping everyone from the CEO to the store manager understand the factors that define a superior customer experience and those that resonate with various consumer segments, SMG develops a prescriptive set of actions that improve operations, inform marketing communications and grow brands. To request more information about SMG, email Joe Sciara at email@example.com or call 816-448-4500.
(i) The survey extended the broadly accepted definition of "Millennial" a few years beyond the upper end of the age range in order to capture the pivotal years during which Millennials transition to the next stage of life.