A Strategy for Marketing to Millennials

Millennials are the largest shopper generation, 80 million strong. More than any other demographic, they embody the always on, active lifestyle that drives today's society, constantly surfing the online world in their areas of interest.

This is tied to the notion of binge spending, something millennials are more prone to than other consumer shopper groups. They expect consistency of experience across mediums, and if their online shopping experience is unpleasant, they'll be turned off and tap into friends for better recommendations.

By 2020, the number of millennials who are active as independent consumers — i.e., spending their own money — will grow 68 million, or one-fifth of the total population. While their purchasing power is low today, they're expected to surpass the purchasing power of Baby Boomers by 2017, according to RetailNetGroup.

To help retailers respond to evolving consumer behavior, including that of millennials, Daymon regularly tracks and interprets global trends. Key trends significant for retailers interested in providing better products and services to millennials include the following:

• Millennials are deferral of key life-stage events and tend to be "singletons" for longer periods of time than previous generations. For example, they're less likely to own a home or car and are delaying marriage and childbirth. In fact, only one in five women ages 15-30 is married, compared to over 60 percent of women in this age group in 1970.
• Millennials want personalized, authentic products and are actively seeking out retailers and brands that fit with their lifestyles, prioritizing immediacy, convenience and ease of use. At the same time, the broad macro environment means that price remains important to these consumers.
• Millennials are ethnically diverse, and with growing immigration, acculturation and international access to the internet, they're more likely to have global palettes and particular interest in ethnically influenced products.
• Millennials are a tech-enabled group. They grew up with technology and are comfortable using it, from online and mobile shopping to social networks.

With the above characteristics in mind, it's also important to note there's a huge polarization in the spending power of millennials. From a retail perspective, we can divide them into two groups.

The first group tends to be underemployed, buried in college loans, frugal and focused on savings, making them particularly interested in price and value. They use technology to comparison shop and research customer reviews to find the best deals.

The second group tends to be well-educated, employed, living without dependents and thus far less concerned about their financial security. They have money and they're ready to spend it! Convenience and location is their No. 1 priority when it comes to where to shop. They value variety, social experiences and saving time to enjoy the finer things in life. When they shop, they're looking for products with exceptional innovation and the best features.

With these trends in mind, here are six best practices you can implement into your business to better reach millennials:

1. Leverage digital tools to engage, connect and more powerfully influence millennial shoppers’ paths to purchase, from pre-purchase research to in-store browsing to post-purchase feedback. Millennials are active online, and are using their smartphones to research products before they buy. They're also accustomed to sharing with their peers and are influenced by social networks (e.g., Pinterest) and digital advertisements.

2. Don't fight showrooming. Millennials are already actively showrooming. They visit stores armed with Wi-Fi-enabled mobile devices to compare competitor prices, especially Amazon.com. Give them a reason to buy in-store, such as unique experiences and price-match rebates. Know that millennials desire immediacy, so they're even more likely to look at products online before purchasing them in a physical store.

3. Be a socially conscious brand. Millennials are concerned about reducing their carbon footprint and investing in the long-term care of the environment. They will favor brands that are ethical, have authentic moral credentials and support causes. This will also play out in some of their retail behaviors. For example, millennials embraced the idea that owning bulky, rarely used items is both expensive and unsustainable. To this end, they're renting more and reusing options at retail.

4. Know the nuance of the polarized millennial. They're not one size fits all and their attitudes and preferences differ on brands, stores, etc. Customization and personalization are key to securing their purchases.

5. Ensure a seamless shopping experience across channels and platforms. To most millennials, the retail world exists just as strongly online as it does in brick-and-mortar stores. Make it easy for them to shop the way they want, whether that's in-store, online or via mobile device.

6. Do it for me. Millennials value service and prefer retailers that incorporate service propositions into the cost of the product.

Shilpa Rosenberry is the director of consumer strategy and insights at Daymon Worldwide, a company that specializes in the sales and marketing of private label consumer products.