Five millennial myths busted

21/08/18

There’s no such thing as the millennial customer – or is there? We set straight harmful marketing generalisations and stereotypes and reveal the truths on selling to millennials.

Who are millennials? 

Everyone wants to know them. The millennial generation – generally people born between 1981 and the mid-Nineties – is the century’s most talked-about consumer group. Members of this segment of society are young enough to have most of their economic lives ahead of them, yet old enough to have entered the job market and be active consumers. 

In the UK, this group makes up 25 per cent of the population . It has been tipped as the successor to the Baby Boomer generation in terms of its buying potential, with the majority expected to reach their spending peak between 2020 and 2030. Small wonder that marketers, brands and media outlets are all furiously targeting it. 

Which millennial view is correct? 

Yet this segment is far from straightforward. The category spans more than a decade. Some millennials may have spent their teens without mobile technology, while children of the Nineties are true digital natives. 

This makes it tricky to use one-size-fits-all strategies to win over these elusive consumers, even when using data to inform your method. In this guide to selling and marketing to millennials, we meet five consumers who seem to defy the common generalisations and exaggerations applied to them.
 

1. Millennials buy cheap, fast fashion – really?

The past decade has brought an explosion of fast fashion and cut-price, mass-produced products. Millennials, now aged 37 or younger, remain a key demographic for fast-fashion brands and their purchasing power has sent this already quick consumer-goods sector into turbo drive. According to Lindsay Drucker Mann from Goldman Sachs’ research unit, which has been analysing and tracking millennial consumers for years: “Millennial consumers are one of the most influential forces in the fashion industry today.” And these influencers want trendy goods that do not break the bank… or so it seems.

A recent report by CouponFollow  , a discount specialist based in the US, found that this consumer group is highly driven by price, with 80 per cent of respondents listing it as a primary influence.

It makes sense that this generation would be fairly price-conscious. The recession of 2008 hit during their teens or twenties and could have resulted in a financial pinch at home as parents struggled to make ends meet.  Older millennials may have struggled to find work. In addition, the rise of technology and the ability to compare prices online have allowed this generation to be more price-savvy than ever before. But, contrary to the generalisations bandied about, not all millennials are into fast fashion and there seems to be a growing sub-section of this generation that is choosing to reject disposable convenience.

Flavia Fraser-Cannon, 35, is a theatre publicist based in London. “I am increasingly aware of my ethical and environmental responsibility in this world,” she says.  “So now I eat organic food and try to cut down on meat, and this mindset has stretched into other areas, too. I think about where I shop and what I buy, avoiding convenience where it is unethical.” 

The recent revelations about child labour and slavery in the fast-fashion sector have prompted Fraser-Cannon to shop with smaller, independent businesses with a strong ethical bent. 
“If I want to find something cheaper, I use eBay, as this means I don’t have to buy fast fashion where staff are treated badly and the clothes aren’t sustainable.” 

Fraser-Cannon appreciates the appeal of fast fashion: catwalk-style trendy pieces at a fraction of the price. But she believes affordability comes at a cost. “It’s so wasteful,” she says. “If fast fashion could be curbed, it would mean better working conditions in factories, less waste, better fabrics that don’t end up putting plastic into the sea...” 

Recent research shows that Fraser-Cannon is not alone in spurning fast fashion. According to Nielsen’s 2015 Global Corporate Sustainability Report , 72 per cent of millennials worldwide are willing to spend more on a product if it comes from a sustainable brand.

2. Millennials only shop online

Many of today’s millennials have grown up using the internet. They are digital natives, more comfortable browsing Google than the reference section of a library. The toll on the high street following the proliferation of online shopping has been monumental; according to Credit Suisse, 8,600 of Britain’s shops have closed over the course of 2017. This has resulted in the widespread myth that they prefer to do most things online, from communication to shopping. Nor is this mere supposition, because there’s plenty of data to back up such a hypothesis. 

For example, according to a survey of almost 1,200 American business owners by Mercury Analytics and payments specialist Square , 67 per cent of millennials prefer to shop online rather than in store compared to just 56 per cent of Generation Xers (born between 1971 and 1980). But this data doesn’t give the complete picture. Patrick Young, 29, a London-based engineer, prefers the in-store experience to the soulless nature of online shopping. 

“Around 70 per cent of all my shopping happens in actual shops,” he says. “Shopping isn’t my favourite pastime, which means I want to go into a store and get advice on the fit, touch and feel of products and try things on.” 

Young has had his fingers burnt by receiving ill-fitting clothing from online vendors in the past. “Sending stuff back is still a nightmare and when things don’t arrive it’s stressful,” he says. “I may sound like I’m in the Dark Ages, but I would always rather go into a store.”  This is particularly true of Young’s more expensive purchases. “If I am buying designer clothing, for example, I like going to the shop and experiencing a better level of customer service,” he explains. 

“While doing my Christmas shopping recently, I was brought tea by the shop assistant and offered help picking things out. It’s these details that can’t really be replicated online.” 
Many previously online-only stores have been dipping their toe into the high street. Last year, Amazon opened its first bricks-and-mortar outlet, while brands like Etsy have also teamed up with retailers such as Selfridges, creating pop-up stores. 

Research by behavioural marketing firm SmarterHQ at the beginning of 2017  found that contrary to media myths, some 50 per cent of millennials prefer physical stores as their primary means of shopping.  This was initially attributed purely to the habit of “showrooming” – browsing in a real shop, but then buying the product online from a discount retailer. This has caused significant pain on the high street in recent years, but may be an oversimplification of the truth. 

“I have showroomed in the past, but honestly I would rather buy the item there and then,” says Young. “If there’s only a tenner or so difference, I’ll just buy the item in the shop. And I’ll never forget when I bought a pair of jeans from a leading brand, which had a tailor in store to adjust the fit for me there and then. You can’t get that service online.” 
A recent study by Accenture  found that 82 per cent of millennials prefer to shop in bricks-and-mortar stores. Yet individuals such as Young face disappointment as brands continue to close down their physical outlets. 

3. Millennial shoppers are social media obsessed 

Social media is a major shopping channel for today’s brands. Ads and recommendations on popular platforms such as Facebook, Instagram and Pinterest seem especially effective at targeting millennials.  Some 60 per cent of them are likely to buy from a brand they follow on social media, according to Sprout Social's 2017 survey . And these channels aren’t just places that millennials go to purchase items, it’s where they look for inspiration. 

In KPMG’s 2017 Retail Trends Survey  , millennials and subsequent generations showed five times greater use of social media as part of the customer journey compared to people aged over 35. The same study found that electronics, women’s clothing and beauty were the most successful shopping categories on social media. 

However, the truth is not so simple. Some millennials remain unmoved by social media. Emma Charleston is a 29-year-old graphic designer and illustrator based in Hebden Bridge, Yorkshire. She is an active user of social media, including Facebook, Instagram and Twitter, and is increasingly aware that brands are trying to piggyback on the platforms she uses to communicate with friends for commercial purposes. 

“I keep getting all these ads on social media,” she says. “The split second I realise something is an ad, I scroll past and pretend it’s not there.” Brands increasingly use influencer marketing and some have created ads designed to look like friends’ posts. “I don’t follow influencers and I’m not interested in what they have to say,” says Charleston. “I lose respect for people I follow when they try and push products.”

This irritation extends to the companies that mimic happy customers on social media. “A couple of brands have started using footage that looks like home video; they’re trying to trick us now by making their ads look ‘lo-fi’. For a moment you think it’s a friend. That annoys me. It feels deceptive.”

Charleston is also one of a growing number of millennials who prefer to shop on the high street rather than online and she is frustrated that so much capital is being diverted away from bricks-and-mortar stores and poured into social media. 

“Our nearest high street is in Halifax and when I go into stores there, they are often full of old stock, with dusty changing rooms and stuff lying on the floor,” she says. “It feels like all the exciting developments are happening online, while the high street is falling behind. They just don’t seem to be trying anymore.”

While millennials remain the most active cohort on much social media, many are actively choosing to switch off. In reality, sales of basic phones, which do not support social media, are rising.  Strategy Analytics, a research group, estimates that 44m basic phones were sold in 2015 . A recent study by Digital Awareness UK  canvassed the opinions of 5,000 students and found that 63 per cent said they would not care if social media did not exist.  A majority – 71 per cent – had also taken a break from social media. If the trend continues, brands may need to find a new ‘new’ avenue for targeting the flighty millennial.

 

4. Millennials show no brand loyalty

Millennials have been given many names over the past few years. Also known as Generation Y and Echo Boomers (because they are the children of Baby Boomers), less flattering monikers include Generation Me and the Peter Pan Generation. 

Millennials have frequently been accused of being lazy, self-obsessed and irresponsible. This has led to an enduring myth that they have no brand loyalty. According to several studies, they simply flit between the brands that offer the lowest price or sassiest social-media ad. 

A 2016 Daymon Worldwide study , which polled 7,000 millennials and Generation Xers across 14 countries, found the data to back up this assertion, revealing that 29 per cent of millennials usually buy the same brand, but will try others on occasion, with 26 per cent saying they are likely to "buy whatever brand they feel like at the time”. 

However, these statements don’t necessarily suggest millennials are disloyal, simply that the proliferation of choice means they may be loyal to more than one brand per shopping category.
Fionn O’Brien, 30, is a door-to-door canvasser living on the Isle of Portland, Dorset. “I have go-to brands,” he claims. “I have skated since I was a teenager and that has left me with residual brand loyalty even though I don’t skate much anymore.” 

O’Brien doesn’t have one single brand that he uses for clothing and another for electronics, but has a few in each category, he reveals. He will remain loyal to these brands until they fall out of favour, either because of a shift in quality or “because I avoid brands that are unethical”. 

“I don’t research everything before I shop, but I do read a lot about the topic, so it does influence my brand loyalty,” he continues. “I want to make sure I support the companies that do good, look good and are functional.”

According to Accenture’s recent study, millennials can in fact be “exceptionally loyal” customers. But such loyalty comes at a price; these canny shoppers want to be treated well and consistently engaged. 

Some 95 per cent of the millennials polled said they want their brands to court them actively. A subsequent study by YouGov and supply-chain cloud provider GT Nexus  found that 55 per cent of millennials and Generation Z respondents had stopped shopping with one of their favourite brands in the past 12 months due to an unethical supply chain or unreliable delivery. Millennials are easily turned off brands that do wrong but, far from being disloyal, in truth they just support more brands overall, giving the illusion of flightiness.

5. Millennials are bad with money

Millennials can’t afford home ownership, but will spend £10 on smashed avocado on toast. This statement and many like it have been doing the rounds in recent years, leading to a myth that millennials are financially illiterate. Indeed, in a study by the Global Financial Literacy Excellence Center at George Washington University and PwC , only 24 per cent of millennials could demonstrate basic financial knowledge. 

There are a number of factors that might explain this. In the UK, for example, financial literacy was not part of the school curriculum until 2014. However, plenty of millennials have opted to educate themselves about money and its value. Olivia Coxhead, a 25-year-old theatre production assistant based in Deptford, London, is an avid saver. By putting away £200 every month since she started working she has amassed enough cash for a deposit on her first property.  “I have a Help to Buy Isa and try and save on top of that,” she says. “I have enough savings to put down a deposit on a house, but the mortgage is the problem.” 

Salaries remain depressed in the theatre industry, which has proved challenging, prompting Coxhead to consider using her savings for an MA instead of a new home, which could boost her future earning potential.  She doesn’t believe her financial literacy is unique. “My immediate friends are a lot like me,” she says. “The only difference is that there is a slight fatalism about millennials. Salaries are so low that many of us feel we’ll never buy a house. If you don’t make enough money to save, what’s the point of berating yourself?”

Coxhead knows how to budget, saves up for items she needs and tends to spend more on quality goods and services. “I like the idea of things lasting,” she says. “I try and think about cost per wear or use. I’ll wait up to six months to buy something that is good quality.”

According to a recent Deloitte study on millennials and luxury , quality is the single most important thing that attracts them to a brand, beating great advertising, uniqueness, popularity with friends and family or celebrity promotion.

If there were two very similar products – one an expensive luxury item and one cheaper – the report found that 25.6 per cent would buy the item made with quality materials, while 14 per cent would buy because of brand name alone. They would certainly pay a premium for quality and luxury brand combined, debunking generalisations about their fickle and unfocused spending habits.

Arguably, millennials are hyper-aware of the value of things, which has prompted them to opt for sharing expensive goods rather than owning them outright. This explains the explosion in car pooling, home swapping and the borrowing of tools.

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