What is Cool? Understanding Millennials
If you happen to follow us on twitter, then you may have seen the article we recently published called “Cracking the Millennial Code“. While this piece was more oriented towards the issues that Millennials face in their attempt to reshape today’s business culture, it failed to address a popular topic of conversation within the marketing industry–namely that of the Millennial as consumer.
Why is this topic so important in marketing? Because as Pew reports, the Millennial generation is projected to outnumber the Baby Boom generation by the end of this year. Baby Boomers, who have traditionally been the bread and butter of marketing efforts because of their numbers and generally homogeneous consumer behavior, will soon be replaced by a larger, more diverse and technologically driven generation that by all standards has none.
Who are they?
This raises some questions about how marketers should respond to this unruly rabble (of which your author is proudly a member). This conversation, however, did not begin with the onset of social media, or the projected exit of the Baby Boomers from the marketplace. In fact, this generation has been on marketer’s minds for some time–particularly how to mold them into predictable consumers.
Regardless of their overwhelming numbers, extreme diversity and disparate consuming trends, one thing remains constant: we love to consume. I turn to a Frontline report that aired in early 2001, a period that most would look back on as the twilight of our naivete towards the global community that we have become accustomed to through new media. The segment, titled “The Merchants of Cool” explored the ways that marketers addressed and informed the now dubbed “Millennial” generation’s internal discourse over the question, “what is cool?”
This conversation, along with the increasingly rapid proliferation of personal technology, has come to the post-modern conclusion that “new” and “cool” are synonymous–just look at the queues outside of your local Apple store next time there is a product launch. What is more interesting is the role that social media has played in magnifying the disparities between early adopters of new products or technologies and the general consumer. This constant tension of trying to stay with the curve, and knowing exactly what it takes to do so, has created a generation whose self worth is quantified by their ability to consume (and qualified by an ever attentive global audience).
A Trend of Consumption
This is an activity that has informed a lot of our existence since the beginning. We were born during a period of relative stability and prosperity, and it shows. In fact, at the time of this report to-be-Millennial teens spent an estimated $105 billion dollars, and influenced their parents to spend an additional $49 billion dollars. Forbes now estimates that this same generation will be spending roughly $200 billion dollars a year (which if we compare to the earlier figures and adjust for inflation shows that the rate of consumption for millennials (in dollars) has not changed since their teens).
This revelation is interesting, especially when you consider the fact that nominal wage growth has yet to exceed pre-recession levels, let alone that of 2001. What this means is that the millennial generation puts a high premium on their ability to spend money, far above that of financial stability or independence. It should come as no surprise then that 36% of millennials live at home and the same percentage receive some sort of financial support from their parents.
This raises two questions. How long will this trend of spending and consumption last, and how can businesses responsibly manage this enormous consumer base? Hopefully with sustained economic recovery the former will resolve itself as more millennials gain employment with sustainable incomes. The latter, however, appears to simply be a matter of being in the right place, at the right time with a new message that speaks to the sensibilities of this highly dynamic generation.