Commentary

Emerging Brands Riding the Millennial Wave

The term “Millennial” conjures up many images. Young, unattached hipsters; over-educated but economically under-performing; mind-melding with their phones; obsessed with social media; a generation of apartment renters preferring car sharing services over ownership of homes and cars.

In fact, many stereotypical images about Millennials are outdated. Millennials are generally defined as those born between 1980 and 2000, making them roughly 18-35 today, possibly even as old as 37, depending on the definition. Moreover, the “crest of the Millennial wave” – the peak of population – is now ages 25 and 26, meaning that wave is about to crash into huge lifestyle changes. In the U.S., the women now typically get married a little before age 28; men a little before 30. The median age of a new home buyer in the U.S. is 32. The take-away: every market related to home and family is about to boom, but with a new kind of buyer – a mobile-first Millennial with a distinct set of attitudes, aspirations and marketplace preferences. An analysis of digital market intelligence data reveals that a handful of brands are riding this wave to digital growth.

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Brands Riding the Millennial Wave

  • Auto: Millennial car purchasing is on the rise, fueled by (pun intended) improved financial standing, the need for family transportation, and the desire for ride sharing to supplement (not replace) car ownership. Cargurus has benefited at the expense of more traditional brands in the auto info/listing space, connecting with Millennials by being well-optimized for mobile, and for highly-converting bottom-of-the-funnel keywords that resonate with Millennials, such as deal, cheap, used and for sale. Cargurus rode this enthusiasm to a highly-successful IPO in October.
  • Home: Even against stiff competition from Amazon, Wayfair has made significant inroads into the Millennial home. Certainly Wayfair executes well on the basics now expected from online shopping, including free shipping and excellent service. Wayfair also connects with younger, value-oriented consumers looking for smaller pieces (average Wayfair order: $258) that allow them to buy "items as they go to freshen up their home” (as CEO Niraj Shah put it). Also in transition is the home services category, with the more traditional brand Angie’s List being surpassed by (and later purchased by) faster-growing HomeAdvisor.
  • Pets: Traffic to Chewy.com has surpassed traffic to more established players in the pet category. Most obviously, Chewy leverages the Millennial fondness for pets and for online purchasing; they also connect emotionally via “Zappo’s-like customer service” and video content posted by employees (which comes across as authentic and charmingly unpolished).
  • Coupons: Slickdeals.net has risen while some better-known coupon-related sites have fallen. Their approach: capitalize on a lifestage-driven uptick in spending, while also hitting Millennial hot buttons around transparency, customer reviews and a more general belief in the wisdom of crowds. Only community members (not merchants) can post or rate deals.
  • Streaming video: Growth for Hulu and STARZ is outpacing some competitors by combining content that appeals to Millennials with offerings well-suited to cord-cutters.

Clearly there is a new generation of brands appealing to a new generation of consumers. The result is tremendous opportunity for brands that resonate with Millennials as they bring their digital-native approach new categories, and continue to display their openness to new brands.

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