• by Jack Loechner , Staff Writer @mp_research, August 1, 2012

According to a SymphonyIRI report released in June 2012, the Millennial Generation is relatively new to the adult world and is working to balance daily expenses against a modest household income, all with a backdrop of depressed economic conditions. Logically, this has created a rather conservative next generation of CPG shoppers.

Insights from the Executive summary show that:

• The Millennial Generation is quite unique from earlier generations; it is huge, and it will define the future of the CPG industry
• During the past 18 months, millennial shoppers have demonstrated more volatility and less fiscal confidence versus the average shopper; this is having a profound impact on daily rituals and associated CPG-related purchase attitudes and behaviors
• The drug channel earns above-average share of millennial spending; dollar channel share is low, but showing signs of traction
• While price is an important consideration for millennials when assessing a retailer, -the fun factor is essential, as is the need for highly-relevant product assortments
• Digital media are particularly instrumental in the millennial shoppers‘ CPG journey, as this group relies heavily on peers for assistance in making smart purchase decisions

The Millennial Generation is also known as Generation Y or The Echo Boom. Though there are some differing opinions around the exact age range defining The Millennial Generation, for the purposes of this report, millennial shoppers are defined as those shoppers currently between the ages of 18 and 34.

According to the U.S. Bureau of the Census, more than 50 million Americans are between the ages of 18 and 34. This generation is commonly known as The Millennial Generation—the Americans passing into adulthood at the start of the new Millennium.

Despite having larger-than-average households, Millennials are only slightly more likely versus the general population to have a $25-$99,000 household income, and they are less likely to have entered the six-figure income ranges.

Given household composition, Millennial income is really quite modest. In fact, 32% of millennial shoppers are having difficulty affording weekly groceries. This compares to 22% of the general population.

The Millennial Generation is unique from other generations in another way, in that they are the first generation to be  always connected. According to University of Michigan Social Research, says the report, 80 - 90% of Millennials use social media, three out of four have created a profile on a social networking site, and 80% sleep with their cell phones next to them. When making brand selections, millennial shoppers are much more heavily influenced by new media versus the average shopper.

According to a study by BazzarVoice, 84% of millennials report that user generated content (UGC) on company websites has at least some influence on what they buy, compared to 70% of baby boomers. They are not simply looking for feedback from their immediate social/family circle, but looking for input from other shoppers in similar life-situations for assistance in making smart purchase decisions.

A number of promotional tactics appear to affect Millennial shoppers’ brand decisions more heavily than the average shopper, according to the report. Of note, of the 10 factors listed, Millennials only under-index the average in terms of previous usage and trust of the brands, with a share index of 92.

The report shows that price doesn’t only influence brand decisions, it also dictates where they shop. 86.3% said that having the lowest prices everyday was a 1^st or 2^nd attribute choice when deciding at which store to shop.

Like other U.S. consumer segments, Millennials have adopted a wide range of frugal behaviors during the past few years. But, because they are facing challenges establishing their own careers, households and families in the midst of prolonged economic discord, the fiscal prudence practiced by this segment is more intense versus that of the general population.

In conclusions, the report suggest several considerations for marketers and manufacturers:

• Establish and grow loyalty among millennial shoppers with a value proposition firmly founded on these shoppers‘ rituals, needs and wants. Prominently reflect the value proposition in marketing programs and across marketing platforms
• Closely monitor evolving trends among millennial shoppers in order to anticipate and proactively address changes in product needs and shopping preferences
• Re-evaluate distribution strategies to ensure they hold a sufficient presence across strong and high-growth channels
• Make an emotional connection with millennial shoppers with innovative products, packaging and promotional programs that reflect this generation‘s quest for living well for less
• Invest to establish an intimate understanding of millennial shoppers‘ digital adoption curve. Complement traditional marketing efforts with targeted initiatives deployed across high-traffic new media

For additional information, and to sign on to access the complete report in PDF format, please visit Symphony here.