‘One size fits all’ doesn’t work for Millennials
Marketers frequently talk about Millennials as one large, cohesive group. The impression is that Millennials are all tech obsessed, custom coffee drinkers who retrofit old trends to make them new again. While this is certainly true for some, a blanket statement encompassing all Millennials is not valid. Research demonstrates there are considerable differences in behavior among Millennials, especially when it comes to shopping, and retailers need to pay attention.
For instance, according to a recent survey conducted by LoyaltyOne, the older Millennial group (25-34 yrs.) is much more self-sufficient and are the primary shoppers for themselves and others in their household, with roughly 66 percent employed full time. Unlike the younger Millennials, with 18 percent at full time employment, the older group has a greater disposable income, which equates to buying power and primary decision-making. The younger Millennials, given their lesser income, are much more price sensitive and find price three times more important than the older group.
This is only scratching the surface — Millennials also differ from one another in terms of their attitudes, education, culture, geographies and other demographic variables. So perhaps the right approach is to find individual customer needs as reflected in buying behavior rather than using broad demographics.
Specifically, just as with other generations, segmenting Millennials on these dimensions is the incorrect approach and retailers should be analyzing each individual customer’s behavior and creating personalized offers to influence them based upon those unique needs. After all, with 80 million Millennials, it would be rather simplistic to think that all of them are the same, especially for a generation that is so different than previous generations.
With competing needs and wants, the strategies to attract and retain Millennials will need to be tailored accordingly. Retailers need to create and utilize the best tools and analytics in order to effectively influence the varied buying behavior.
How can retailers best identify the needs of individual Millennials? What must retailers do to engage with Millennials in meaningful ways in order to earn their loyalty?