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Decoding the Digital Millennials: Large in Number, Huge in Influence
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Litmus: Digital Millennials
1.
LITMUS
Decoding the Digital Millennials Large in Number, Huge in Influence The biggest generation ever in terms of sheer size is making its influence felt in nearly every category of commerce and culture. Currently on par with the baby boomers at 82 million members, this group will swell to over 100 million by the time immigration is taken into account. For this reason and a host of others, millennials are fundamentally changing shopping and how goods and services are sold and purchased. Don’t Call Me Y Commonly referred to as Generation Y, the label is rejected by this upbeat and positive group who doesn’t want the association with its predecessor Gen X, who they see as rebellious and jaded. Digital millennials were born between 1982 and 2000. We’ve called them “millennials” because the first wave graduated high school in 2000 full color and “digital” because they were figuratively born with a keyboard in their hands. Digital millennials hold tremendous spending power. While no consensus has emerged yet, most estimates suggest their total spending power is at least $200 billion annually. The primary barrier to getting a true read on their spending is the limited access they possess to actual methods of payment. A retailer may clearly know that they one color (reversed) have 16-year-old customers, but the data says that the credit card belongs to a 44-year-old, for instance. Research indicates that 15–17% of total spending power online, but much of this group shops online yet buys in-store. Growing Up as Technology Does This generation was born in the midst of escalating computing advances B&W and electronic device proliferation. The computer got personal before most of this group was even born. In quick succession, cable TV exploded, the internet was commercialized, email became popular, the mobile phone went mainstream and MP3 files were created. As a result, digital millennials not only value connectedness, they are defined by it. They consume huge quantities of media—as much as 20 hours of media in a seven-hour period (MediaWeek, June 21, 2006). www.resource.com ©2009 Resource Interactive. All rights reserved.
2.
How They Came
to Be Methodology Research Partner: O JupiterResearch Quantitative data review and analysis: O Harris Interactive O Forrester O MTV Relevant topical books: O Millennials Rising, Neil Howe, William Strauss, and R.J. Matson O Millennials and the Pop Culture, William Strauss and Neil Howe O Generation Me, Jean M. Twenge O Everything Bad Is Good For You, Steven Berlin Johnson R.J. Matson, Strauss & Howe, Millennials Rising, 2000 Our study participants: O Between 14 and 24 years Every generation is defined by different beliefs, circumstances, value systems and of age O Online 10-plus hours life events. Boomers of the 1960s were free-thinking and focused on liberation. per week Generation X’ers largely grew up in the 1980s and were all about rebellion and O Used a mobile phone at least individuality. They were the latchkey kids who were on their own as their parents 30 minutes a day O Sent between 6 and 10 pursued careers. Millennials are a breed apart. This is a well-scrubbed group of text messages or instant achievers—their SAT scores are on the rise, their pregnancy rates down. messages a day O Participate in social A coddled generation, millennials are wanted children. In the early 80s we suddenly networking found children to be the “badges” proudly sported by their parents. “Baby on O 72 millennials over an eight- board” signs, minivans, and the explosion of infertility treatments signal that week period O One-on-one interviews of children were in demand. Twenty years earlier, children were to be seen and not nearly 2.5 hours in duration heard. Ten years prior, children were getting in the way of the women’s liberation O Met specific race, gender, movement. By the 1980s, people were choosing to start families and their children spending pattern and geographic distribution became the central figures within the household. An industry of catering and profile marketing directly to children was born as these kids were exposed to the arts, Our strategy team studied: literature and technology—in short, indulged. O How they use technology O How they communicate They were also born into an unprecedented era of prosperity. There were two short O How they make decisions. recessions, each just a few months in duration, during their lifetimes. They, as a O Participants were given group, have never had to deal with want—they have never done without. web-cams O They received text-message They were treasured from conception and fully participate, from a very young age, questions each day for ten days in the decisions of the household. But the big story is not what they buy—it’s all O They captured their the influence they have on the total purchases within a household. They influence responses and uploaded everything from the category of clothing that you would expect to interest them to them online daily www.resource.com ©2009 Resource Interactive. All rights reserved.
3.
the cars adults
buy and the vacations a family takes. They should be viewed as co- purchasers for nearly everything purchased within a household, from 81% of apparel and 52% of vehicles (Harris Interactive, 2006). Clothing/apparel 81% Groceries 77% Movie video/DVDs 76% Music CDs/cassettes 71% Video games/systems 69% Computers 68% Books/magazines 67% Influencing Computer software 66% Household Purchases Cell phones 66% Harris Interactive, 2006 Vacation 59% DVD player 58% TV set 55% Sports equipment 55% Stereo equipment 54% Vehicles 52% VCR 49% Furniture 48% T.E.A.M.—Together Everyone Achieves More This is the era of no losers—only the winning-challenged. Millennials have only Statistics known reward—even for just participating. They have received four-foot trophies for coming in sixth. Millennials have been taught that they are special and valued This generation grew up online unconditionally. They have been told “I love you” more than any other generation. 86% of millennials use the internet, will reach 90% by 2011. Concurrently, indulgent parenting was not the only reason for millennials’ JupiterResearch, 2006 precocious sense of accomplishment; collaborative learning began to overtake the Effectively, they have never incumbent competitive learning system in schools. Though this bred a sense of known a world without fairness, it also reinforced attitudes of entitlement. Little patience for waiting to get the internet. Even the first what they want emerged. wave of millennials, were quite young when the internet was commercialized in the 1990s. Meet the Millennials AdAge, 2006 We have uncovered five defining traits. Millennials have had the ability to email the President of the United States since 1. Perpetually Connected first grade. Information Outlook, 2006 Texting. Instant messages. Podcasting. MySpace. Facebook. Gaming. This group stays connected. www.resource.com ©2009 Resource Interactive. All rights reserved.
4.
They are online.
A lot. Up to three hours a day for older millennials and an hour for younger millennials. This group routinely does homework online, shops, views personal web pages and blogs. The mobile phone is this group’s lifeline. Eighty-one percent of teens either own or use a mobile phone and they rarely turn this device off. In addition, they don’t delineate between marketing channels as they see all media channels as having expanded and converged. Communication is all the same. To a millennial, email is a communication format of last resort and for “old people” like parents and teachers. While they receive large numbers of email, they send very few. While older people speak of emailing a friend, a millennial would likely say, “I facebooked her.” The online social network is pivotal in how they communicate and view their circle of “friends.” 20 20 RECEIVED SENT 15 14 13 Email Usage is Flat— 10 Not Preferred Harris Interactive, 2006 5 0 2 2 3 13-15 16-17 18-21 YEAR OLDS YEAR OLDS YEAR OLDS Millennials let everyone into their world. While they have a small close circle of three to five friends, their lives include a larger social tribe (5-25), dozens to hundreds of online friends, and tens of thousands of “friends” that are tied to them via their online social network. Millennials are excellent collaborators, to the point where they make very few decisions independently. They have been raised to believe that there is safety in numbers and technology makes it easy for them to take an instant poll and/or to consult with expertise resident within their network. This makes them very informed purchasers and retailers vulnerable to public opinion. www.resource.com ©2009 Resource Interactive. All rights reserved.
5.
2. Multitasking and
“Productive” Millennials are busy—scheduled and overscheduled, but in their minds are very productive—very productive consuming media among other things, and yet the term multitasking almost doesn’t do a millennial justice. Because of the technology-infused environment in which they have been raised and the complexity of popular culture that requires more of consumers, researchers have found that digital millennials’ brains are wired differently. As discussed in Everything Bad is Good for You, Steven Johnson, 2005, millennials are able to understand more complex story lines and become bored with overly simplistic interactions. If you compare popular television shows from the 80s (like The Love Boat) with ones from today (The Sopranos), you will find more characters, plots, subplots and multiple threading. WATCHED TV 77% SURFED/ACCESSED THE NET 74% LISTEN TO MUSIC (INTERNET, CDS, MP3S, ETC.) 71% LISTENED TO RADIO 54% 24-Hour Media WATCH VIDEO/DVD 37% Consumption Harris Interactive, 2006 PLAYED ON A VIDEO GAME SYSTEM 29% READ A MAGAZINE 23% READ A NEWSPAPER 23% WATCHED A PRERECORDED VIDEO OF TV PROGRAM 15% WENT TO MOVIE 9% They are consuming media at unprecedented rates. Conditioned by a heavily structured and scheduled childhood, millennials don’t do well with idle time. Leave them alone and they become fidgety and anxious. Technology is their tool to becoming “productive” again, providing them with connection, stimulation and instant gratification. 3. Filtering for Immediacy and Control Because they are simultaneously consuming media, multitasking and tuned into the notion that marketing is all around them, they are constantly filtering out messages and media that they feel aren’t relevant to them. www.resource.com ©2009 Resource Interactive. All rights reserved.
6.
MySpace.com
eye tracking We performed eye tracking* on our study participants to evaluate their processing *Eye Tracking speed relative to older adults. Millennials process information up to five times faster! Eye tracking testing is employed They process large amounts of content, skim to keep their mind engaged, yet read specifically for understanding only the first one or two words. They are more inclined to notice images, videos crucial questions surrounding and moving objects. They have a high disdain for anything the interrupts them— research and purchase behavior on a site. A flat panel monitor anything that they can’t control or turn off. This trait drives high DVR usage—to is equipped with small cameras enable the fast-forwarding through TV ads, for instance. They love to shop online to track the movements of the and pick up the product in-store to ensure that they have it that day. user’s eyes. It records what the pupils are doing while the user Remember: these children are used to getting what they want when they want is looking at a web site. Eye tracking data from user sessions it. Immediate gratification is important to them. They want instant access to is consolidated into a heat- information, and online ratings and reviews are more important to them than map that shows where users to older adults. And they don’t care what older people think—they want their look and indicates their level information segmented so that they can find out what other people their age think. of cognitive engagement. This process provides a powerful In addition, they want to share their opinion instantly. Thirty-seven percent of 18-24 analysis of how customers year olds feel that their reviews are important and should be posted immediately interact with the homepage, and unedited (JupiterResearch 2006). category pages, product pages, cart and checkout. 4. Self-Expressive Yet Assimilative However paradoxical, digital millennials pride themselves on self-expression, yet their identity is an extension of the group. Because they were exposed to many www.resource.com ©2009 Resource Interactive. All rights reserved.
7.
more activities than
previous generations, they have had the opportunity to develop discrete tastes and interests. As such, they see themselves as creative individuals. Yet, they rely on their social network for everything from homework to purchase advice. Repeatedly, when we posed questions to our subjects, they responded with references to what their friends thought—without us asking them to do so specifically. Which leads back to T.E.A.M.—Together Everyone Achieves More— T.E.A.M. is the mantra for this generation, so much so that they have little respect for hierarchy and only trust authority who they feel have earned it. To the point: they place more trust in their peers than in authority figures. 5. Optimistic and Self-Entitled This generation has an inflated sense of self and aspirations for the future. Nearly 40 percent believe that they will earn over $100,000 per year by the time they reach age 30. Nearly one-third of them believe—not feel or wish—that they will be famous (MTV 2006). And they have no concept of copyright ownership—they believe that they are entitled to copy anyone’s music or video (LA Times/Bloomberg, 2006). Over three-fourths of them think that brands should ask for their opinions. When asked “How should companies treat people your age?” Matthew, age 21, said “I may not have much money, but give me what I want and I will influence more people than you can imagine so show me what I want and then you’ll be just fine.” How Millennials are Changing Shopping Because millennials are perpetually connected, expressive, multitasking and reliant on their social networks, they are changing shopping in fundamental and far-reaching ways. STIMULATE GET SHORT SELECT PURCHASE RE-ENGAGE INFO LIST IMPACT OF BRAND COMMUNICATIONS Old Purchase Funnel IMPACT OF SOCIAL NETWORK www.resource.com ©2009 Resource Interactive. All rights reserved.
8.
The old purchase
model was largely a numbers game, with the standard illustration being a funnel, where marketing and advertising reached out to a large volume of consumers and an increasingly smaller number migrate from brand awareness ultimately to conversion. STIMULATE ENGAGE PURCHASE EMPOWER & RE-ENGAGE Expecting on-demand Seeking immediate Filtering & info & services gratification discovering From Funnel to Fish Sharing, creating & validating Feeling a sense of belonging Wielding ongoing influence However, the impact of traditional advertising and brand communications is fading as millennials consume media in a more targeted fashion. And when they do become aware of a product or brand that interests them, they turn to their social network for information and opinion which has an amplifying, or bloating, effect on the process. For marketers to take advantage of this, companies must leverage consumers as media because trust is in the network. So our model is no longer a shopping model; it’s an engagement model. And once a millennial completes a transaction and feels part of a brand—they use social media to create, share and validate their experience with their networks to “help others make decisions” which has yet another amplifying effect at the end of the cycle. What we see now is no longer a funnel, but something that more resembles a fish in shape. How to Reach the Digital Millennial: What Appeals So, how do retailers and others reach out to the digital millennial? Remember: millennials are smart, learn quickly, don’t tolerate waiting and rely on their social network to make collaborative decisions. Overall, they are positive and are fully www.resource.com ©2009 Resource Interactive. All rights reserved.
9.
engaged with the
world. They can and do become quite loyal to brands that understand them. Here’s five ways to win millennials: 1. Keep It Real “Being fake is worse than being uncool. Don’t try and talk like us because you’re not.” Digital millennials shun posers and want to do business with authentic brands and want a continuous influx of new products because they process information and changes quickly. Millennials love eBay because the site is always fresh, it is selfpolicing, they love the perception of a deal and it has built a true community. 2. Hear Me Out Millennials have ideas and want to make their mark. Brands must Ebay has built true community. learn to listen and involve customers in brand decisions. Amazon. com user reviews is an example of a company listening to customers, although millennials would prefer to see only what others in their peer group think. Amazon could enhance its experience even more by allowing reviews to be filtered further by multiple criteria. 3. Be Original or Don’t Be Millennials thrive on creativity. Marketers need to offer limited editions or product exclusives. Three-week cycles for store/site refreshment are widely done, but millennials prefer more excitement and more frequent updates to maintain freshness. This is a highly expressive group and they seek out originality. Amazon reviews lets buyers share points of view. 4. My Way…Now Millennials want control over the interaction. And they are impatient. For instance, on iTunes, customers can buy products in any combination. From Best Buy, millennials can order online and pick up in the store. 5. Entertain Me Brands need to stimulate millennials with fresh news and merchandise stories to create a “did you see that?” reaction. Historically, entertainment brands have done well at creating entertaining experiences that the rest of us can learn from. It is iTunes lets consumers buy in any combination. time to consider viral events that drive buzz, such as pop-up stores and public relations opportunities. Companies should also create entertaining branded media that can be shared. www.resource.com ©2009 Resource Interactive. All rights reserved.
10.
What They Expect
or How: Millennials Lifestyle Redefines the Customer Journey How to market to digital millennials: STIMULATE ENGAGE PURCHASE EMPOWER & RE-ENGAGE Stimulate Expecting on-demand Seeking immediate Develop fresh news and ever-evolving merchandising stories and approaches. Filtering & info & services gratification Provide tools that are branded and ultimately user-endorsed to pull in the network. discovering Engage Become more searchable on the site and on the web. Allow full zoom and invite involvement. Enable online reviews by affinity group. Use rich internet applications to ensure rapid screen refreshes and loads. Try user initiated, instant messaging, text Sharing, creating messaging and mobile. These could be the keys to winning the digital millennial. & validating Purchase A major barrier to purchase is accepting payment from millennials. Many millennials are too young to hold credit cards. It is time to begin accepting alternative methods of payment, like PayPal. Feeling a sense And, for the instantly gratified, allow online ordering of belonging and in-store pickup and payment. Ground shipping is too slow. Develop creative ways around the higher Wielding ongoing influence costs of overnight shipment that leverage the eagerness of millennials to engage their social networks. Additional Sources Quantitative data supplied by: Empower and Re-Engage O US Census Bureau Millennials want a sense of belonging. Create events and opportunities that make O Kaiser Family Foundation them feel special. Create cool tools—easy to use features that facilitate the sharing of consumer generated content. These could include the ability to upload their O Consumer Electronic Association own photo into an online video ad, or a way to share their own story about your O Vibes Media brand with friends via a mobile interface. Remember, for digital millennials, using technology is second nature. It is fun. And if there is any type of humor component, O Virgin Mobile USA all the better. No one appreciates a delightful twist of tech more than a digital O Steven Berlin Johnson millennial. After purchase, invite them into a club or pull them in again with the offer O MediaWeek of special privileges. O Strauss and Howe O CNW Marketing Research O LA Times/Bloomberg www.resource.com ©2009 Resource Interactive. All rights reserved.
11.
A Redefined Customer
Journey Online and Off Digital millennials hold their own vision of the world. Tech savvy, multitasking and optimistic, they are ready to deliver economic opportunity to brands that make the effort to engage them—and their social networks—as equals in the brand experience. About Resource Interactive Resource Interactive is one of the nation’s preeminent digital marketing agencies, helping Fortune 500 companies thrive in the evolving internet economy with award-winning digital strategy, creative and technology solutions. Known for its revolutionizing consumer insights, leading edge interactive design and technological innovation, Resource Interactive is ranked among the top ten independent interactive agencies in the nation. Unique in the industry as female-founded, owned and operated, Resource Interactive has grown over its 28-year history from its first marketing relationship with Apple to ongoing partnerships with clients such as Procter & Gamble, Hewlett- Packard, The Coca-Cola Company, Victoria’s Secret, Sherwin-Williams and L.L. Bean, among others. For more information, visit www.resource.com. www.resource.com ©2009 Resource Interactive. All rights reserved.
12.
Litmus Test
Try our Litmus test to determine how connected your brand is with digital millennials. 3 – Definitely 2 – For the most part 1 – Not at all 1. Does your current web experience invite input from millennials? 3 2 1 2. Are digital millennials entertained when they visit your site? 3 2 1 3. Do you offer tools that facilitate the input of consumer-generated content? 3 2 1 4. Can digital millennials experience elements of your site on demand? 3 2 1 5. Can digital millennials share branded media that they find or create on 3 2 1 your site? 6. Can digital millennials access ratings and reviews from others their own age? 3 2 1 TOTAL How Did You Score with the Digital Millennial? Over 16? You are meeting the digital millennial on the road of prosperity. Keep them stimulated and engaged with exclusive benefits or cool tools. Between 11-15? Your brand experience hits and misses with digital millennials. Remember to keep it real. When you get their attention, keep your site fresh in order to keep it. 10 or less? It’s time to listen to this consumer segment. Digital millennials have ideas and want to make a mark. Open up. 343 North Front Street, Columbus, Ohio 43215 ph 614 621 2888 ph 800 550 5815 fx 614 621 2873 www.resource.com FOR MORE INFORMATION, EMAIL: inquiry@resource.com www.resource.com ©2009 Resource Interactive. All rights reserved.
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