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Nielsen: Millennials mean business
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Looking to “break the myths” about millennials, and help marketers and brands effectively engage with them, Nielsen has released a
new report, dubbed “Millennials: Breaking the
Myths of this No Strings Attached Generation.”
Millennials are big business. Defined by
Nielsen as those between 18 years and 36 years
of age, millennials are 77 million strong in the
United States — on par with baby boomers —
and account for 24% of the country’s population. Their incomes may still be on the rise,
but this group’s size and age range equate to
impressive purchasing power in the long term.
“According to Forbes, millennials spend up
to $200 billion annually. All told, millennials are
shaping the present and owning the future with
more purchasing power and decision-making
ability than ever,” said Beth Brady, president of
Nielsen segmentation and local market solutions.
“So, in order to make the most of this $200 billion
opportunity, we would suggest the following
four-step process: Identify your best consumers
within millennials, develop products and content
to meet their needs, engage them through effective and efficient marketing, and activate your
plan through superior sales execution.”
Millennials still are climbing the income ladder ($25,000 median income for younger millennials and $48,000 median income for older
millennials), so while they may want the latest
and greatest products, they need to be savvy and
thrifty. In light of this, their spending often exceeds baby boomers in drug stores, warehouse
clubs, supercenters and mass merchandisers.
“When it comes to spending money, millennials are more likely to live paycheck to
paycheck, but still want the latest and great
products. So, they tend to make impulse purchases. They make fewer shopping trips than
their older counterparts, but they spend more
per trip — $54 versus $46 per trip for baby
boomers. Millennials are strong mobile and
online shoppers, but e-commerce still makes
up only 6% of overall retail sales in 2013,”
Brady said. “As for their deal-seeking behavior, while millennials may not be clipping
coupons the way baby boomers do, they are
still focused in on shopping deals. Deals ac-
TOP 20 SHOPPING- AND DISCOUNT-FOCUSED APPS FOR MILLENNIALS
Unique audience (000s)
By Antoinette Alexander
Discounts/rebates
Source: Nielsen Online, April 2013
SHOPPING TRIPS PER HOUSEHOLD
Grocery stores
67
59
Supercenters
26 25 23 20
Drug stores
16 14 13 13
51
BASKET RING $ PER TRIP
43
Supercenters
51
61
Mass merchandisers
38 47
54
Dollar stores
15 15 12 9
Convenience/gas
15 15 12 7
Mass merchandisers
12121212
Warehouse clubs
12 1311 9
Greatest Gen
Warehouse clubs
86
59
Grocery stores
34 43
51
107
71
106
68
54
52
Drug stores
24 26 28 27
Convenience/gas
18 23 21 22
Dollar stores
13151717
Boomers
Gen X
Millennials
Source: Nielsen Homescan, Total U.S. 52 weeks ended Dec. 29, 2012, based on total basket ring, excluding gas only or Rx only trips.
count for 31% of their shopping dollars, and
the top 20 apps are either retail or discount
focused, with Amazon Mobile and Groupon
topping the charts.”
Nielsen also noted that millennials are likely
to spend more on a product from a company
that has programs that give back. When they
buy, they care about a brand’s social impact,
making them receptive to cause marketing.
When developing products for millennials,
Nielsen stressed that they desire authenticity,
niche, personalization and customization.
“If they like your product, they will share
their opinion, and their vast social network is
likely to take notice. However, beware of crossing them because that same vast social network
can turn on a dime, and recovering from bad
press is expensive and difficult,” Brady said.
But how do you reach them? According to
Nielsen, millennials spend less of their time
watching TV. In fact, millennials make up 50%
of no-TV households, relying instead on their
smartphones and laptops to watch content on
Continued on page 14
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WILLINGNESS TO SPEND MORE ON PRODUCTS FROM SOCIALLY RESPONSIBLE COMPANIES
2011
32%
34%
65
abo and
ve
33%
42%
60
to
64
38%
43%
55
to
59
37%
48%
50
to
54
39%
47%
45
to
49
38%
50%
40
to
44
51%
53%
35
to
39
49%
53%
30
to
34
52%
56%
25
to
29
21
to
24
Ages
53%
55%
Change from 2011 to 2013
44%
49%
Continued from page 12
YouTube, Hulu and Netflix.
And when they do watch TV — likely
event-related programming like Sunday Night
Football or Comedy Central — they also are
engaged with social media, commenting on
what they like and dislike.
Additional highlights from the report include:
• Diverse, expressive and optimistic: Millennials are characterized by more than
just their age. As a group, they’re more
racially and ethnically diverse than any
previous generation. They value selfexpression and artistic pursuits. They’ve
been hit hard by the recent turbulence
in the economy, but their high education
levels and optimism foreshadow their
potential for future success.
• Driving a social movement back to the
cities: If they’re not still living with mom
and dad, millennials are fueling an urban revolution looking for the vibrant,
creative energy of cities offering a mix of
housing, shopping and offices right outside their doorstep. They’re walkers, and
they are less interested in the car culture
that defined baby boomers.
• Struggling, but they have an entrepreneurial spirit: The Great Recession has
hit them particularly hard. They’re dealing with high unemployment, low income and high student loans as they try
to establish themselves. However, some
millennials have hit it big by investing in
startups and following their own entre-
PERSPECTIVES
Un
der
20
Up FRONT
2013
Source: Nielsen Global Survey on Corporate Responsibility, Q3 2011 and Q1 2013
MILLENNIALS — TOP 10 MARKETS BY PERCENT/INDEX FOR CONCENTRATION
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
AUSTIN, TEXAS (16%, 120)
SALT LAKE CITY (15%, 117)
SAN DIEGO (15%, 117)
LOS ANGELES (14%, 109)
9
DENVER (14%, 109)
4
WASHINGTON (14%, 109)
3
HOUSTON (14%, 108)
LAS VEGAS (14%, 108)
SAN FRANCISCO (14%, 107)
DALLAS-FORT WORTH (14%, 106)
8
2
6
5
10
1 7
Source: Nielsen Pop-Facts, 2013
preneurial pursuits.
• Connected and want the personal touch:
Technology defines millennials. They
sleep with their mobile phones and post
status updates from the bathroom. When
interacting with companies via social media, they value authenticity. They want
to feel like they have a personal, direct
interaction with the brand, and in return,
they’ll advocate and endorse that brand.
Teen Vogue: Social media serves as social purchasing path
Social media delivers more than wish list window-shopping. It
is essentially a social purchasing path for girls, according to Teen
Vogue’s recently released “Seeing Social” survey.
In order to understand how social media impacts the ways millennials shop, Teen Vogue examined the role that social plays in driving
beauty and fashion trial and purchase. The survey generated 1,074
responses from Teen Vogue’s It Girl community, composed of girls
ages 13 years to 29 years.
For millennials, social media is a path within a path to buy. According to the findings, 85% of respondents have been driven to purchase something after seeing it on a social media network. However,
the storefront of a posting is just the beginning, as young women
tend to take a three-part path on social before transaction:
14 • APRIL 29, 2014
1. See it: Instagram is the No. 1 platform that inspires respondents
to purchase.
2. Search it: When respondents find a fashion or beauty brand
they like on social media, they search YouTube videos of how
best to wear or apply the product (52%).
3. Shop it: Before purchase, they engage in “comparison shopping” on social media platforms, often turning to Pinterest
(48%) for additional product images, YouTube (43%) for reviews
and recommendations, and Facebook (36%) for sales/deals.
So what’s the future of social? According to respondents, the future belongs to Instagram. It is the platform most cited as the one that
“everyone will be talking about next year,” and the clear must-have
app this year.
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