Why Millennial's Changed The Market. And how you need to update your Strategy Plan to keep up.
Authors William Strauss and Neil Howe wrote about the Millennial's in Generations: The History of America’s Future, 1584 to 2069. At the time they were not sure how many people would adopt the term Millennial.
At the present moment it seems every paper or news article you read will highlight the term in a changing manner. Like how they drink coffee, eat food, and try new wines. often it is in a negative light, for instance, The New York Times wrote;
“The usual answer seems to be “narcissism” — self-absorption indulged to comical extremes. We all can recite the evidence: the breathlessly updated Facebook profile, the cascade of selfies, the Kardashians.”
when explaining what sets the Millennial generation apart from older generations such as the Baby Boomers.
We, however, feel that the majority of people are not following the market or understanding the so-called self-absorption and narcissism generation’s effect. Let us take a look at a market measuring tool. The Consumer Price Index (CPI);
The CPI tracks the spending habits of US consumers and breaking it down to be used as an Index for the economist to follow.
The sources of data are Prices for the goods and services used to calculate the CPI collected in 87 urban areas throughout the country and from about 23,000 retail and service establishments. Data on rents are collected from about 50,000 landlords or tenants. According to http://www.bls.gov/news.release/cpi.toc.htm.
This, however, does not take into count Stocks, Bonds & Alternative Investments such as Crypt-Currency or Crowd Funding. Yet adds House purchasing, Automobiles, and other larger ticket items that were traditionally vital.
What does this have to do with the Millennial?
Well let us think about this for a second; Darren Ross wrote an excellent article called Millennial’s Don’t Care About Owning Cars, And Car Makers Can’t Figure Out Why. In the article, he writes
“What auto manufacturers, along with much of corporate America are missing here is that the vehicles to freedom and personal identity have changed for this generation. The sooner brands get a grip on this reality the sooner they can make adjustments in how they market to and communicate with this core group, which is essential to their long-term success.”
If we take this article into effect then we are left believing that the millennial's are averaging 25 thousand or more(average car price) liquidity from the post-generations. Now contrary to belief millennial's are actually savvy investors that tend to be more on the conservative side. Bank of America Merrill Lynch’s survey found that employees aged 18 to 33 are enrolling in defined contribution plans faster than other generations, suggesting they do, indeed, “understand and appreciate the need to save for their future.”
The majority of the millennial’s follow a shared economy. Meaning buying a home is not a major priority and living on a none contract month to month rent agreement is a preferred option. This has been established do-to-years of job hunting and watching older generations being tied to their organic market because of leveraged values of homes and secondary lien positions when the market collapsed in 08.
The reminder of a recession has left the Millennial generation to spend money on adventures, experiences, and a padded retirement or a brokerage account rather than materialistically possession.
Now going back to the CPI and remembering the Index does not take into account, adventure, experiences, & Investments, but does calculate large ticket purchases such as homes and automobiles we have to wonder how accurate our current report on economic health looks for the US.
so the question you need to be asking yourself is,
— Is the Millennial’s market behavior changing the way I need to do business? And if it is, how should my strategy plan be adapted to be coherent with the market shift?
For more information on formulating a strategy plan, please visit us at www.Sinc.biz.