An important looming demographic shift for businesses and government agencies is the Coming of Age of the Millennial generation. Millennials comprise nearly 80 million young adults (according to the U.S. Bureau of Labor Statistics) born between 1976 and 2001 and are in the process of joining the workforce (an estimated 40%). The nearly 80 million Millennials who are about to enter or who are already in the workforce will fundamentally change how business is conducted in the future, as the Baby Boomer generation did decades ago.
By 2015, Millennials’ annual spending is expected to be $2.45 trillion and by 2018, they will eclipse boomers in spending power at $3.39 trillion, says Oracle. Businesses and agencies that start planning now for the trend setting that every generation brings and the sweeping changes will be ahead of the demands placed by this newest generation.
By 2025, Millennials, also known as Gen Y, will make up the majority of the workforce. Born between 1981 and 1991, according to Pew Research, the Millennials outnumber the aging Baby Boomers and by 2030 will outnumber them by 22 million. No generation before has had as much access, technological power or the infrastructure to share their ideas as quickly as the Millennials: they are used to speed, multi-tasking, and working on their own schedule.
How does this generation differ?
Millennials have an innate familiarity with technology and the speed at which it develops, making them more at ease with rapid technological changes than other generations. “They are also the most affluent and well-educated generation in history.” Known as “digital natives”, the first generation in history to have been immersed in technology since birth, communicate differently. Social networking is a central part of millennial culture, since most of communications is done through various social networking sites, including event organization and sharing information. They use social media applications like they were born to it – because they were.
Gen Y tries to do everything they can online, from shopping, to reading the news and watching TV. According to a Cisco survey, 90% of Gen Y check their emails, texts, and social media accounts using their smartphones before they even get out of bed. One in 5 Gen Yers will check their smartphones at least once every 10 minutes. One question is: are Gen Y well connected or are they technology addicts? The same Cisco survey found 60% of people questioned checked their devices compulsively or subconsciously and 40% said they would experience withdrawal effects if they couldn’t. Apps are also an important part of a Gen Yer’s life too, with 70% stating that mobile apps were important to their daily life.
How can your business or agency get ready to cater to the next generation?
As consumers, Millennials are different than prior generations and rethinking services offered, operations, brands, marketing and business models is necessary. Government services will likely need to rethink how they approach servicing this generation. The good news is that they prefer online access, which will enable call-center styles to be eliminated while increasing demands on the technology groups. Planning now will ensure wise investments are made of scarce budget dollars.
“Marketers’ understanding of millennials’ needs, tastes and behaviors will clearly shape current and future business decisions,” said Jeff Fromm, Barkley senior VP. As an example of one significant difference, Pew Research reports their greater exposure to marketing campaigns through social media (40% v. 9%) and online news (28% vs. 22%). Millennials gather information on products and services from more channels – more millennials than nonmillenials reported using a mobile device while shopping to research products (50% vs. 21%). Software Consortium has been following these trends and advising our clients how to invest wisely and adapt practices to evolving business models.
Millennials as consumers: Broad trends
As the generations before them, this generation is diverse and are not identical. But by understanding the trends that are already being established, businesses and agencies can have a short cut to thinking about this new generation’s general approach.
Millennials are used to instant gratification and expect speed, ease, efficiency, and convenience. Sixty percent of Millennials agree that it’s a real convenience to have a smartphone or tablet to research or purchase a product/service on the go (Barkley) and 41% have made a purchase using their smartphone (Edelman Digital). They also value getting through a line quickly (81%) and care less about “friendly” service, notes The Boston Consulting Group. Although Millennials like to shop online, they still prefer to shop in-store and 92% said real-time product availability would influence where they shop (Accenture).
Trust of friends matter
Most consumers, regardless of age, go to the Internet to research purchases. And most of them look for user-generated content (UGC) to help them buy. Eighty-four percent of Millennials report that UGC on company websites has at least some influence on what they buy, compared to 70% of Boomers (Bazaarvoice). Millennials stand out when it comes to producing and uploading online content, including photos, videos, wiki entries, blog posts, and product/service review, as 60% are more engaged in these activities. Thirty-two percent of Millennials say they don’t like advertising in general, compared to 37% of the general population (Experian Simmon) and 70% feel more excited when their friends agree with them about where to shop, eat, and play.
Social networking is a huge part of Millennial culture. When looking for opinions about products to buy, Millennials are more than three times likely than Boomers (22% vs. 7%) to turn to social channels (Bazaarvoice) and 33% of Millennials are far more likely to favor brands that have Facebook pages and mobile websites (BCG). Research has also found that 63% stay updated on them through social networks (Ipsos) and 46% of Millennials count on social media when buying online.
Making a difference matters
Affiliation with a cause is more important to the Millennial generation than to any previous generation. Thirty-seven percent are receptive to cause marketing and are more likely to purchase items associated with a particular cause and 30% prefer to actively engage in a cause campaign by encouraging others to support it (BCG). Barkley found 41% of Millennials participate in cause programs by supporting friends and family in causes meaningful to those people and they use their mobile phones for almost 50% of their charitable donations.
The Millennial Generation are the biggest of all generations, as consumers and workers, learning about the differences now can mean wise investments in your technology and marketing arenas. Next month will focus on the Millennial generation in the workforce.
The business and technology landscape has been changing more dramatically than any time in history and having a trusted partner like Software Consortium can help you ride the wave of change. We have been helping clients navigate the changing landscape of technology since the advent of the PC and client-server and now are helping with cloud, mobile, big data and other needs.