As the boomers age, they are focusing less on acquiring “stuff” and more on great experiences, creating special memories with family and friends. The most affluent boomers own multiple homes, more clothing and jewelry than they can wear, more luxury products than they have room for and have less energy and time to care for and manage all of these material things. Boomers, though retiring later, are spending more and more of their time savoring and enjoying their "golden years."
As boomer spending continues to decline, the smartest luxury marketers are already looking to the future. Enter the next generation: The millennials — the conundrum with clout.
Luxury marketers have yet to fully crack the code on how to communicate with this often misunderstood generation and fully appreciate, accept and embrace how technology is driving every aspect of their daily lives whether they relate to millennials’ views and values or not.
While surveys differ, most agree this group falls between the ages of 18 and 34, are the largest generation in history (over 86 million), account for $1.3 trillion in U.S. consumer spending and represent more than one-third of the adult population in America.
The smartest luxury marketers already know that the way millennials value and measure success is dramatically different than previous generations. For this new generation, money isn't everything. Eighty-seven percent of them disagreed with the statement that "money is the best measure of success.” Sixty percent feel they will be changing jobs in less than five years. Eighty percent think they should be better recognized in their current jobs. Half would rather be unemployed than work at a job they hate.
This shift in priorities has luxury marketers facing a very high maintenance consumer with an expectation for a truly personal relationship with a brand. Millennials’ loyalty comes at a price. They expect a personalized experience, crave a genuine human connection and need to feel that The Brand truly understands them. Brand for them is just the price of entry. It’s how “the brand” behaves that counts.
Millennials put a premium on corporate social responsibility. One in three boycotts or promotes and buys from businesses based on the causes they support. They reward organizations with a true social conscience. Four in five said they'd be more likely to purchase from a company that supports a cause they care about (price and quality being a given). Three in four think more highly of a company that is a good corporate citizen.
One of the greatest challenges for brands in better understanding millennials as customers or employees is better appreciating the speed at which they operate. They grew up with technology at their fingertips. They are the most informed generation in history. More than 90% own smartphones. They have created a new language that is typed instead of spoken; transmitted in rapid, short bursts of abbreviations through social media and texting. The phone is “old technology.” Texting rules. They have instant access to an entire universe of information. The vast majority of them consume content through countless digital channels, preprogrammed to their personal interests. For them, print is a secondary medium.
When millennials walk into a store, they have already researched the brand, its competitors, online reviews, asked friends for their opinions and likely know as much or more about the brand’s products/services than the majority of sales associates serving them. No surprise, given their product knowledge, that 63% of millennials engage in "showrooming": browsing in-store but buying online at a better price.
For the millennial customer, the online experience is perhaps equally as important as the in-store experience. Engaging millennials online through social media and user-friendly websites (keep in mind millennials are supremely critical judges) should be a top priority for luxury brands.
Deeper engagement, faster service, a flawless experience, both in-store and online, consistent rewards and honest, open communication are essential. The key to enhancing millennials' overall customer experience must be a re-engineering of marketing strategies and tactics bespoke to them. Brands that sell and market to millennials on millennials’ terms will capture their hearts, loyalty and wallets for decades to come.
Part 1 of 3.