Natural Foods Merchandiser

Millennials rise to buying power

Just when you've figured out how to market your store to Generation X shoppers, a new surge of consumers is coming through your doors.

The oldest Millennials, also known as Generation Y or the Echo Boom, turn 25 this year. According to Neil Howe, co-author of Millennials Rising: The Next Great Generation (Vintage Books, 2000), the Millennial generation began in 1982 and recently ended. "We'll have to wait until history draws the line, but

I think there is probably a new generation being born now," he says.

The toddlers to 20-somethings who make up the Millennials are expected to be the largest generation ever born in the United States. Howe says the boomers averaged 3.8 million "native"—or U.S.-born births—per year, Gen Xers averaged 3.5 million, and Millenials are averaging 3.9 million. Add the growing amount of immigrants, and the Millennial generation will most likely top 100 million people, Howe says.

"Millennials are growing up in houses that contain 50 percent more things, measured by pound, than in 1980."

"Millennials are a consumer behemoth riding atop a new economy of astounding scale and extravagance," he says. "They're growing up in houses that contain 50 percent more things, measured by pound, than in 1980." Even before they reach middle school, Millennials are savvy shoppers. "The average 10-year-old today knows about 400 brand names and asks for product by brand name 92 percent of the time," Howe says. So how do you set your store's brand and image apart? By understanding how Millennials think and then tweaking key elements in your marketing plan to show this younger generation you get the message.

Howe and Millennials Rising co-author William Strauss conducted a survey of 600 Millennials who graduated from a Virginia high school in 2000. They found the following defining generational characteristics:

  1. They're team players. "Boomers think only one person can be No. 1. Millennials see rewards for everyone participating and being a member of the team," Howe says. "This is very difficult for boomers, with their value on independence, to understand."
    Unlike Gen Xers, Millennials are optimistic about the future and believe that collectively, they can make a difference. "They're much more involved in politics than Generation X," says Howe, who noted that Millennials voted in record numbers in 2004 and 2006.
    This all-for-one approach means "what's ratified by Millennials' peers is very important to them," he says. If you want this generation to hear your message, avoid marketing efforts geared toward winning and individualism.
  2. They're daddy's—and mommy's—girls and boys. A whopping 90 percent of the kids Howe and Strauss surveyed said they trust and feel close to their parents. They agree with their parents' values and don't feel the need to rebel as much as boomers and Gen Xers did. "Take a look at the overlap of teens and parents with what's on their iPods," Howe says. "I bet the songs are 50 to 60 percent the same. Can you imagine a boomer teenager listening to his parents' big-band music?"
    When it comes to shopping, "most teens [today] consider parents to be the biggest influence on their spending decisions, ahead of advertisers and peers," Howe says. Parents also have another influence: Only 26 percent of the students surveyed got most of their spending money from jobs; the rest received it from their parents. But Millennials aren't entirely parental parrots. Like the generations before them, Millennials don't want to buy their parents'—or grandparents'—products. This is particularly perti?nent to naturals retailers because the natural foods industry was nurtured to maturity by mommy and daddy Baby Boomer. "When one generation almost invents and defines a certain class of product, that generation often takes it almost to their grave," Howe says. "Someone age 21 doesn't want to go into a natural foods store and buy what people in their 50s and 60s are buying."
  3. They're diverse. Howe says in 1999, nearly 36 percent of Americans under age 18 were non-white or Hispanic. Twenty percent had at least one immigrant parent, and 10 percent had at least one noncitizen parent. Successful marketing efforts need to take this into account.
  4. They're technologically savvy. This wired generation thinks technology is good for them. "Unlike Luddite boomers, Millennials don't see any conflict between good health, the right way to live and technology," Howe says.
    But that doesn't necessarily mean they'll blindly accept technology-driven products such as genetically modified crops. "It has to be proven and documented to work. They're going to say, 'Give me the evidence,'" Howe says. "This generation is smart, so you need to be able to make your case." Because of this mindset, Howe believes online point-of-sale information is particularly effective for Millennials.
    Millennials' brand awareness is also a byproduct of technology. "With the Internet, any kid anywhere can keep up with the trendsetters, no matter where they are," Howe says. "Cutting-edge items are easy to find. Kid marketing is toward a smaller number of bigger brands."
  5. They're busy. Childhood for Millennials is hyperscheduled, supervised and programmed, Howe says. "They're the most watched-over generation in memory." Their summer camps are "small, structured and have a huge amount of activity." Even their recreational drug use is efficient. "The drugs they pop in college are [attention deficit disorder drugs] Adderall and Ritalin—whatever makes them perform better. They take drugs to excel within the system," he says.

In natural foods stores, Millennials are drawn to products that are "effective at getting something done—looking better, sounding better, succeeding better. It can't just make them feel better," Howe says. "Millennials aren't pioneers. They're looking for effective ways of getting things to work out in their lives in a system they see as highly pressured. And it better be quick, because they don't have any time to wait." Neil Howe will speak at this year's Expo West at 9 a.m. March 11 in Room 204 A/B.

Vicky Uhland is a freelance writer in Lafayette, Colo.

Natural Foods Merchandiser volume XXVIII/number 3/p. 22, 27

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