Why are Most Companies Failing to Reach Millennials?
Companies working in vain to sell to millennials are failing for this sole reason: they’re trying too hard.
Tic Tac released a candy that changes flavors as it dissolves — their reason being: because apparently millennials get bored too quickly. Banana Republic partnered with Hot Dudes Reading, an Instagram account, to create #HotDudesReadingForACause, because millennials evidently desire all things social.
“It’s as if your parents are trying to connect with you and they’re trying to do it by using the same language that your friends would,” said Paul Angone, 32, author of two books on millennials, including “All Groan Up: Searching For Self, Faith, and a Freaking Job!” Talking in emojis, for instance, “comes off as pandering and inauthentic.” With this crew, the biggest mistake is seeming inauthentic, he said.
ADULTS IN THE WORKPLACE
It’s difficult to put blame on any generation; let alone companies for trying to woo millennials. The country’s biggest percentage of working adults comprises of 83 million American millennials, making them the very targets for consumer brands. Now, don’t get me wrong, it’s not that the generation born between 1980 and 2000 doesn’t want to buy stuff. It’s simply a matter, mostly, that they can’t. 70% of the Class of 2014 took out loans to pay for college and owe an average of $29,000, according to the Institute for College Access & Success. In 1993, graduates owed an average of less than $10,000.
“Over the next five to 10 years, they’re going to drive a disproportionate share of spending, so their preferences matter,” said Paula Campbell Roberts, a consumer economist at Morgan Stanley. “But sluggish wage growth, student debt and high rental costs have constrained their actual growth rate. The share of consumption driven by college-age consumers overall has been in decline since 2003.”
U.S. consumer spending in 2014 grew 3 percent for 25- to 34-year-olds, compared with 5 percent for the rest of the population, according to Morgan Stanley data.
Getting rid of debt is looking less and less promising. Slowing wage growth disproportionately hits this cohort, which largely doesn’t have other sources of wealth, Roberts said. And the money millennials make is largely spent on housing. In 2013, more than half of renters spent more than a third of their income on rent, compared with 30 percent of renters paying one-third in 2005.
Consequently, many millennials are very picky about what they purchase. In fact, 84% of consumers say they either completely or somewhat trust recommendations from family, colleagues, and friends about products and services — making these recommendations the highest ranked source for trustworthiness. [Nielsen]
- 74% of consumers identify word-of-mouth as a key influencer in their purchasing decision. [Ogilvy/Google/TNS]
- 68% trust online opinions from other consumers, which is up 7% from 2007 and places online opinions as the third most trusted source of product information. [Nielsen]
- 88% of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts. [BrightLocal]