Today’s entrepreneurs face a major branding challenge. The next generation of power purchasers is here — and they’re some of the most drastically different consumers to date. A group of young influencers in their mid-twenties to early thirties, members of the Millennial Generation have their fingers on the tech pulse and a thick wad of cash in their wallets.
Their experience-driven purchasing habits are a stark contrast to the current power generation, made up of soccer moms who drive SUVs and live in the sprawling McMansions of suburbia. The soccer-mom generation of buyers prefers the familiarity of a casual-dining chain restaurant to more adventurous alternatives; they’re packrats with basements full of things rarely used.
But after being handed life on a silver platter, affluent Millennials have an evolved their own set of values. With mobility in mind, they ditch suburbia for downtown to be closer to other young people and fun things to do. What they do buy into is the rare — trendy service-based businesses (bars and restaurants) and luxury goods (think Apple, Bose, Versace) are now booming. For example, Millennials eat out an average of 3.39 times per week, compared to 2.54 for Gen X and 2.34 for Boomers. So how can your company cater to these buying habits?
Start branding experiences, not products.
Members of this generation are unaffected by mass-market advertising and instead support brands and causes they identify and connect with. They believe they can positively impact the world — 37 percent will purchase a product to support a cause they believe in, according to ShareLikeBuy. For example, Tough Mudder – a long distance obstacle event I participate in every year — encourages participants to raise money for The Wounded Warrior Project. With this generation, service providers have the most to win, as Millennials are more focused on entertainment and experiences than products or price.
Product-based companies have quickly adjusted their product cycle, marketing techniques, and advertising strategies to reach the next power purchasers. Nike’s Better World and Levi’s Go Forth campaigns are superb examples of lifestyle marketing aimed at Millennials. Conveying their inspiring message over print, Web, and video campaigns, these companies highlight the actual product less, and instead sell the experience a purchaser will have.
To succeed, brands must put the lifestyle and aspirations of the next power purchasers at the very core of their strategies. Those that create an emotional experience around their product or service, push technological and social boundaries, and offer a clear vision of how their services will impact or improve buyers’ daily lives will thrive. Anything less is just noise. Here’s how to do so:
Ride the trends.
Millennials strive to spend less time working and more time enjoying life and exploring – 75 percent would like to travel abroad as much as possible. They actively seek service providers that will either entertain them or allow them more time to play. Millennials are more likely to pay someone else to clean their apartment or purchase their groceries. Therefore, entrepreneurs should build a product or service that directly targets these needs. Think smartphone users, restaurant goers, dog owners, beer brewers, and new wine drinkers — check out the marketing approach that Second Glass is taking.
Capture the feeling.
These power purchasers value quality over quantity, and focus on the experience that the product will create. They frequent nice bars and restaurants, order microbrews or craft cocktails, and enjoy artisanal foods. This generation prefers to spend its disposable income on entertainment, like video games or a concert. Craft an emotional experience for your product or service that is memorable and unique, like Heineken has.
Millennials are highly connected and often consult their social network for shopping advice. ShareLikeBuy found that 70 percent of Millennials prefer to have their friends’ approval on all major purchasing decisions. Millennials watch and mimic friends’ spending and purchasing habits, often buying the same brands or items. Establish your brand presence on social networks to tap into these social consumers.
Focus on quality.
Millennial power purchasers are buying less, and what they do buy has to be top quality. Case in point, Business News Daily reported that Millennials account for 31 percent of luxury goods web spending, compared to 23 percent from Generation X and 19 percent from Baby Boomers. This generation cares more about collecting experiences than material objects, so quality is more important than quantity. When they do shop, Millennials are browsing online to find exactly what they want, meaning promotional sales have less impact on their purchasing habits.
Millennials have major purchasing power, totaling just over $200 billion in direct spending power annually. However, they still love free or nearly free. Follow in the footsteps of Spotify and Hulu and provide a free product, but tie it to an upgrade to make the experience even better for those who choose to pay.
The Millennial Generation is having a greater effect on consumer products and services than ever before. Brands that create a powerful connection between product and experience will find the most success, but those that ignore the experiential purchasing habits of these emerging power purchasers will fall by the wayside.
Justin Beck is the co-founder and CEO of PerBlue, a mobile and social gaming company in Madison, Wis. PerBlue is best known for its flagship product, Parallel Kingdom. The popular location-based massively multiplayer role playing game for mobile and web platforms has over one million players worldwide. Founded in 2008, PerBlue is now home to 40 full-time software developers, artists, and business specialists.
The Young Entrepreneur Council (YEC) is an invite-only nonprofit organization composed of the world’s most promising young entrepreneurs. The YEC recently published #Fix Young America: How to Rebuild Our Economy and Put Young Americans Back to Work (for Good), a book of 30+ proven solutions to help end youth unemployment.
Image via Emerald2810/Flickr