Are Millennials all that important?
According to Forrester Research’s "The Future of Shopping" report, retailers should be focusing on consumers 45 and older because they have equity in their homes and bigger incomes. Millennials, by contrast, are saddled with student loans and struggling to get ahead.
"There’s this obsession with Millennials," Sucharita Mulpuru, Forrester’s analyst told Bloomberg. "The truth is Millennials aren’t spending any money with anybody because they don’t have any."
Ms. Mulpuru isn’t alone in questioning the spending clout of Millennials.
Articles over the last year have lamented how Millennials have been delaying key life events, such as marriage and home ownership. Many in this age group, it is asserted, are struggling to find quality jobs after the Great Recession and still paying off significant college debt.
According to a survey last November of 1,000 people between the ages 18 tand 34 by the Bank of America and USA Today:
- Fifty-three percent are living paycheck to paycheck;
- Thirty-three percent are paying off student loans;
- Thirty-five percent still receive regular financial support from their parents or relatives;
- Nineteen percent were still living at home and are not paying rent or expenses;
- Twenty-two percent have yet to start saving.
In its report, "Balancing Multi-Generational Retail Strategies," Synchrony Financial argues that retailers should be focusing on both Millennials and Boomers by playing up areas where they share similarities (i.e., love of savings and online browsing and the influence of women). Retailers should recognize differences, such as how the two groups use digital devices differently and Millennial’s heavy reliance on word-of-mouth.
Synchrony said that while Boomers have the most disposable income and contribute almost 50 percent of retail sales compared to about 10 percent for Millennials, retailers that don’t "fully understand and engage the Millennial customer may eventually find their strategies out of touch with their future core shoppers."
- The Future Of Shopping – Forrester Research
- Retailers Urged to Ditch Millennials in Favor of Older Shoppers – Bloomberg
- Bank of America/USA Today Release First Better Money Habits Millennial Report – Bank of America
- Millennial Customers Aren’t All They’re Cracked Up to Be – American Banker
- 6 Money Myths for Millennials to Stop Believing – The Huffington Post
- Balancing Multi-Generational Retail Strategies – Synchrony Financial
Are retailers focusing too much of their marketing resources on Millennials based on the group’s spending power? What do you see as the keys for retailers looking to balance multi-generational market opportunities?