Millennial marketing is not some Madison Avenue focus group, but rather a term you’ll be hearing and learning more and more about in coming years as the population segment referred to as Millennials hits its stride.
Also known as Gen Y, the generation born between the early 1980’s and the early 2000’s is already considered a primary or secondary audience for nearly three-fourths of all marketing campaigns in the United States. The 80 million or so Americans considered Millennials are digital natives who came of age alongside the Internet, which has had a huge impact on how they interact with brands and make purchase decisions.
And now they are on the precipice of big things.
According to a recent study from Digitas, Millennials are about to take a sharp swing upward in the luxury brand space. That is because a nice chunk of Millennials are on the doorstep of affluence, with an increasing number expected to earn $200,000 or higher in the next 10 years making them a massive target for luxury consumer marketers.
Another study suggests those that already qualify as wealthy are 17 percent more likely than their older (35+) counterparts to make a luxury purchase.
And while they were practically raised on brands, Millennials have an innate distrust of marketing. Still, this latest batch of twenty-somethings demand personalization, mobility and have an overriding need to be recognized as individuals.
It may be a lot to ask if you’re tasked with improving a company’s online marketing ROI, but soon they will be in charge. You better start getting to know who they are and how to reach them
Here are a few more hints: They are well-educated, and have also been well-praised by a generation of doting parents, which has led to negative stereotypes regarding their sense of entitlement. So they are hard to please yet at the same time demand to be pleased.
They favor Chanel over Banana Republic; BMW over Cadillac.
They’ve been exposed to interactive messaging from an early age and are adept at tuning out what is not relevant to them. However, they aren’t unreachable. Below are a few key steps luxury brands should take to make sure they’re reaching Millennials:
1. Start now. There’s already a small contingency of Millennials coming into a modicum of wealth, and studies predict that more will join their ranks over the next 10 years. A universal truth about luxury brands is that consumers feel loyal to them. Start building that loyalty online now so that Gen Y will already be attached to your brand once they can afford to buy it.
2. Engage online. It’s no secret that the Millennial generation is active online. They’re not your core audience yet, so don’t drop your core marketing tactics, but this is where the next generation of buyers is most active right now. You should have a strong presence online (especially in social media) and use this time to start listening. Find out what they like and dislike about your brand and start gathering insights on how you can strengthen your brand in their eyes.
3. Be genuine. Gen Y believes they can see through phony marketing messages and have developed a love/hate relationship with certain over-the-top branding (Think Louis Vuitton). Rather than using loud and overly promotional online messaging, identify what they like about a brand and develop a story around it that they will be excited to follow.
4. Leverage peer recommendations. With social media becoming an increasingly important part of Millennials’ daily routines, it’s important to keep peer recommendations in mind. This generation has 24/7 access to their social circles and it’s highly unlikely that they’ll make a major luxury purchase decision without consulting their friends and, or family first.
5. Focus on experience. Hard selling is considerably less effective than creating a memorable brand experience. Static messages don’t register, so figure out how to get Gen Y to interact with your brand. It could be online in the form of a game or a microsite, or maybe it’s a live event or sponsorship. There’s an excellent example of how LVMH moved from hard selling to creating an enjoyable online experience in this NY Times article.
6. Show value. With the proliferation of online product reviews and peer recommendations, it’s becoming more important than ever to highlight the value and quality of your product. Millennials do extensive research before buying a luxury product, so make sure your positioning is very clear on the reasons your product is the best.
7. Offer exceptional customer service. Gen Y is hyper-connected and they expect their brands to be as well. Make sure you’re available on multiple communication channels to answer any questions they might have, without being pushy or trying to upsell. Upsell is seemingly less necessary with Millennials than with past generations because they are exceptionally loyal. According to a report by Edelman Digital, 70 percent will keep coming back to a product or service they like.
8. Do good. One of the best ways to start resonating with Gen Y now is to engage in social good. They grew up with volunteering as a major part of their high school and college requirements and consequently, being socially conscious has become a part of their core belief system. Show that your brand cares about humanity and the environment and you’ll start to build a positive image in the eyes of Millennials.