At 73.1 million strong, Millennials are the largest living generation. Currently, in their mid-twenties to late-thirties, Millennials have a combined consumer purchasing power of $600 billion, a number that is projected to rise to $1.4 trillion by 2020. Because of this, Millennials are radically altering the marketplace. To tap into this purchasing power, businesses must adapt their products, services, and marketing to accommodate Millennial preferences.
But what exactly do Millennials value in products and services? And what are they actually spending their money on?
Millennial = Digital Native
It seems only fitting to begin this discussion with technology as it is in many ways integral to both of the upcoming topics we will discuss. Millennials are the first generation of digital natives; they are intimately familiar with the increased rapidity of life that technology promotes. They expect that businesses will operate on the same level.
Amazon makes online shopping smooth and easy, while smartphones perform a multitude functions simultaneously. Developing technology also allows businesses to make more environmentally-conscious choices, products, and services. These are all important to Millennials (we will touch more on this later in this article). For this reason, Millennials value technologies such as the internet. They make many facets of life much more convenient and time-efficient.
Convenience: There’s an App for That!
As noted above, Millennials value convenience in all aspects of life. Not only do they want the products they use to be highly utilitarian and convenient, but they also want the process of obtaining those things to be flexible and seamless. In order to facilitate this demand, many companies are digitizing their operations.
Harking back to the previous section, technology, and the internet are major contributors to this convenience culture that Millennials prefer. Online buyers are able to quickly browse a multitude of choices, compare prices and reviews, and then make a well-informed purchase. Users can also open one of the thousands of retail apps offered on the App Store to make their purchases. While Millennials buy into it the more than other generations, the ease-of-use, and variety of options that new technology and the internet provide make the digital experience accessible and convenient for everyone.
Green Eggs and Environmental Friendliness
Millennials grew up listening to scientists, politicians, celebrities, and the media debate the merit of climate change. As a result, they are one of the most green-focused generations in history. In fact, one survey revealed that 87% of Millennials are concerned about climate change, while other research indicates that 90% of millennials prefer to buy from businesses with trustworthy social and environmental practices.
Millennials gravitate toward eco-friendly, sustainable, and fair-trade brands like Patagonia, Love Beauty and Planet, and Whole Foods. They value low-waste production and recyclable products. They also prefer companies with high social responsibility standards; companies that focus on social issues and contribute to charitable causes.
Technology, with regard to environmental responsibility, is also important to Millennials. They appreciate hybrid technologies that create cleaner, renewable energy sources. Paper waste also decreases with the use of digital file storage and sharing.
Millennials are Putting Money Where Their Mouth Is
Millennials’ focus on technology, social responsibility, and environmental sustainability is reflected not only in their purchases but also in their investment portfolios.
As digital natives, Millennials are investing in technology and internet giants like Apple, Microsoft, Amazon, and Facebook. Companies that align with their ideals of social and environmental accountability also attract Millennial purchasing power. Research shows that they are twice as likely as other generations to invest in companies that abide by responsible environmental, sustainable, and governance-based (ESG) practices.
For manufacturing and fabrication companies, being environmentally and socially responsible is critical to ensuring that Millennials will use some of their purchasing power to invest in such companies. These businesses can appeal to Millennials by ensuring they implement these practices.
Millennial purchasing power is ever-growing, and as such Millennials are major players in the business world. They purchase products and invest in companies that they believe contribute to global development and sustainability, offer convenient products/services, and effectively utilize technology. Businesses that can align with these ideals are sure to find success with Millennial consumers and investors.
Stay tuned for our upcoming blog discussing how Millennials’ personal and corporate purchasing power is impacting B2B as they advance in the workplace.