Money and women are the most sought after and the least known about of any two things we have.—Will Rogers
By 2017, Millennials will have more buying power than any other generation in the industrialization era
Everyone is after the Millennials and their money. As a group, Millennials have replaced the Baby Boomer generation as being the most attractive to advertisers. They are more likely to have expendable income and both their earning and buying power is just beginning to grow. Brands that lock in Millennials as repeat customers now are likely to enjoy a long purchasing relationship in the future.
The challenge is that Millennials have a very different outlook on the world than did my generation when we were their age. Therefore, they don’t respond to the same form of advertising and marketing campaigns that have worked before. Ad agencies get this because, no big surprise here, a large portion of their creative staffs are Millennials. Convincing their clients of the need to change, however, is not always easy. Some get it, some don’t.
Among those who seem to understand the need to market differently to Millennials is MillerCoors. Sure, it’s no big surprise that Millennials like beer; in many ways they have fueled the craft beer boom almost single-handedly. The traditional big-volume beer sellers have struggled, though, in no large part due to the fact that Millennials don’t like mass-market beer. As a result, we see companies such as MillerCoors looking to smaller agencies like Mekanism to create campaigns tailored specifically to the Millennial, such as this one:
Among the things worth noting about this ad:
- it’s short. 16 seconds is all the time it takes to make their point. Millennials tend to not have long attention spans and a 30-second commercial is likely to be overkill.
- it’s real. Millennials are hitting their childbearing years and responding to that natural desire. However, these are not super-young 20-something couples; they’re older, more mature, which is common among this and subsequent generations.
- it’s not sexy. No girls in bikinis, no buff guys in baby oil. While the couples are reasonably attractive, Millennials don’t respond to over-sexualized images the way that Boomers did.
- it shows a reasonable income bracket. No large pool, no large house. Millennials want homes, but haven’t been able to afford them, so showing a smaller house that is more likely a rental is appropriate.
MillerCoors isn’t the only one getting the message. Hilton Worldwide has announced it will be opening a new chain of hotels called Tru that is designed specifically to attract Millennials. The first hotel is scheduled to come online later this year, with approximately 132 facilities planned for cities that are popular among that generation, such as Portland, Dallas, Atlanta, Chicago, and Denver. The hotels will focus on highly personalized service and what they refer to as a “common, youthful look.” Their ads will be, “visually represented through spirited photos with playful and vibrant colors; custom, fun illustrations; circular shapes, not only to invoke our logo, but also to convey that we are different; and the custom vernacular we’ve created for this brand using three-letter words like zip, jam and fit,” according to Alexandra Jaritz, global head, Tru by Hilton.
There’s no question that Millennials like to travel, but even there they’re not doing it in the same way as Boomers. This is evidenced by the very existence of AirBnB, which is counting on Millennials (and Chinese tourists) to help make it profitable. Can Tru by Hilton create an experience-based standardized accommodation that actually competes with staying in someone else’s home? I have to admit, this could be entertaining to watch. I’m just glad I don’t have any money invested with either approach.
For all the places that are at least trying to understand Millennials, however, there are four or five times as many companies who don’t, and those are likely to be some of the major losers over the next few years. Here are some of the sectors I think really need to step up their game if they want to stay solvent once Boomers are no more.
- Banking & Finance. Millennials don’t trust banks and they damn sure don’t trust Wall Street with their money. As a result, the climate is right for an alternative to come in and set a genuinely new paradigm in the financial sector. Unfortunately, this also may make Millennials more financially vulnerable in the long-term.
- Cable Television. It’s been suggested that there is too much television already. What’s driving this concern is the fact that only 46% of Millennials watch any television programming at all, and the vast majority of that is on mobile devices. Millennials have cut the cord with cable pretty hard and I’m not sure it is remotely possible to convince them to come back.
- Transportation. Just as the auto sector is starting to recover from the recession and sales are picking back up, they soon need to begin re-examining their approach to the Millennial market, which, as a group, doesn’t exactly like cars. Even with the new hybrids and promising growth among alternative-fuel vehicles, Millennials would still rather ride their bicycles, take public transportation, or call Uber for a ride. Environmental concerns override money issues on this one. While there are more than enough Boomers still buying cars, and big ones at that as gas prices plummet, automakers need to re-work their approach to a generation that doesn’t have the brand loyalty their grandparents did.
- Warehouse Clubs. This one kind of makes sense. Millennials live in smaller places and have limited transportation options that don’t involve carrying around a pack of 46 paper towel rolls. While all the major warehouse clubs have online purchasing options, the positioning, design, and marketing of those options leaves a lot to be desired. If they want to capture Millennials, the folks at Costco and Sam’s Club need to follow Amazon’s example and then improve upon that experience.
- Family-related services. This includes anyone involved in health care, children’s services (including clothing and education), and anything to do with weddings. Millennials are totally redefining family. Who and when they marry, when or if they have children, and how they approach health care have significantly different answers than previous generations. A lot of traditions are being left in the dust and will not recover. Those who survive will do so only by completely re-configuring how they do business and how they market to this new generation.
These are not insurmountable issues. For all the challenges some companies may face, there are reasonable answers for most. There’s no time to waste, though. Companies who don’t have a Millennial-focused plan by the end of this year are going to find it increasingly difficult to ever win that business at all. You want Millennials’ money, you’ll have to work for it!
What You Should Know For 12/17/2016
https://youtu.be/iEwClQMQuck
Chipping away the ice for hot news
Wow, it’s a good thing this is a Saturday and most people can stay home this morning. As we’re writing this, roads around Indianapolis are still a complete mess with a number of people on the Interstate having been stuck in traffic most the night. The good news is that temperatures are finally above freezing and the rain that’s currently falling should help melt most the ice. The bad news is that temps drop back down below freezing after about 7:00 this evening and at that point the rain could turn to snow. Your best best is to stay inside if you can. If you must go out, please be careful.
The news takes a couple of interesting turns this morning. The President reaffirmed his earlier statements on Russian hacking during the election and Republicans in North Carolina are being complete assholes toward their incoming Governor. There’s also plenty still developing so we’ll leave those stories alone and go with these five things you really should know.
China stole our drone ship!
China apparently didn’t think they were getting enough of our attention since the US has been focused on Russia pretty much all week. So, they went out into the South China Sea and took an underwater drone being tested by the US Navy1. The drone was about 50 nautical miles off the coast of the Philippines and the USS Bowditch was on its way to retrieve the unmanned vessel when China decided to pluck the thing out of the water.
It’s no secret that China has been feeling very territorial about the South China Sea and this event happened the same day satellite photos seemed to confirm that the communist country has militarized a number of artificial islands it has built in disputed waters2. Still, this is the most aggressive action that China has committed in the past 50 years and is part of a continuing aggression that is more than a little disturbing.
Fortunately, this morning, China says that the matter is being handled amicably between the two militaries3 and that the US will get their drone back. The Navy says the unmanned vessel was built using commercially available technologies and that no top-secret information was compromised.
Uber Is Making Waves
Uber has been getting in trouble this week with the city of San Francisco after one of its driverless cars was caught running a red light in the city4. The problem stems from the fact that San Francisco requires a permit for testing driverless cars, something that limits the days, times, and locations of such testing. Apparently Uber doesn’t like those limitations, so they set about running their cars through the city anyway, Â hoping that their technology was good enough that they wouldn’t get caught. It wasn’t.
On Thursday, California transportation officials demanded that Uber stop its testing until it had obtained the required permits. Seems like a reasonable request, doesn’t it? Not if you ask Uber. On Friday, the head of Uber’s self-driving car program, Anthony Levandowski, said the company would keep right on testing despite objections from the state. He argues that because there is a back-up driver in the car at all times that, technically, they are not driverless under state law.
Yeah, that excuse isn’t going to fly. Late Friday evening the state’s Department of Justice sent a letter to Uber threatening legal action if they didn’t stop testing5. Uber promptly sent another fleet of SUVs into the streets6.
Bypassing The Press
Here’s an interesting question for you: how many politicians do you follow on social media? If you’re like me, you see enough of them in the news to not want their ugly mugs popping up between videos of kittens playing and puppies frolicking. Most of us like our social media feeds to be happy places.
You may want to change up your approach, however, if you want to keep up with what’s going on. The Associated Press is reporting that politicians at both the state and federal level are increasingly bypassing the press and using social media as a means of getting their message directly to the voters7. Most famously, we’ve all see how the president-elect makes effective use of his Twitter account. By contrast, Mr. Trump hasn’t had an actual press conference in over 140 days according to NPR8.
Using social media is attractive for a couple of reasons. First, it’s cheap. All one needs is a cell phone and they can broadcast live on a number of platforms. Secondly, it removes any chance for a sharp reporter to directly challenge the politician’s statements. Without a challenge, however, the politician, as we’ve frequently seen, can lie through their teeth. People then believe those lies and vote accordingly. There’s no question this is a dangerous trend, but those who want to stay informed have no choice but to follow along.
And baby makes … 4?
You know that talk you had with your adolescent child about how babies are made? Well, you might need to adjust your story just a little bit. Britain’s fertility regulator has approved a controversial method through which doctors can use the DNA of three people rather than two when creating new babies9. The method is intended to avoid incidents of children inheriting mitochondrial disease from their parents.
This is an extremely significant development in the field of medicine and trying to explain it quickly is almost impossible. Damaged mitochondria can result in life-threatening diseases such as muscular dystrophy, organ failure, and muscle weakness. The new process removes the nucleus DNA from the egg of the would-be mother and inserts it into an egg from someone else which has had the donor DNA removed. This occurs before the egg is fertilized.
The procedure is not legal in the United States at this time. The FDA has been very slow in approving measures such as this given the legal and social implications surrounding parenthood. Critics also claim that this procedure opens the door to genetically modified “designer babies.” The ethics are quite blurry for some, but from here it seems that saving the life of a child is more important than the threat of future misuse of the technology.
And finally …
Five UK modeling agencies are in trouble after Britain’s Competition and Markets Authority fined them a total of £1.5 million ($1.8 million) for fixing prices charged to fashion retailers between April of 2013 and March of 201510. The CMA claims the agencies, “colluded with each other over their approach to pricing and, in some instances, the agencies agreed to fix minimum prices.” The agencies involved include some major names in the UK market: FM Models, Models 1, Premier, Storm, Viva, as well as their trade group, the Association of Model Agents.
Of course, the agencies say they’ve done nothing wrong and are only trying to protect the best interest of their models. Yeah, right. What they’re protecting are their profit margins. Models are seen as a commodity and incidents of mistreatment and even abuse run rampant. While the agencies all say they’ll fight the fines in court, the reality is that unless clients are made aware of set minimums ahead of time they’re illegal.
Could the same thing be happening in the United States? Quite possibly so, but since model agencies here are all independent proving such a claim would be almost impossible.
That’s all we have time for this morning. Looking out the window, I’m not sure road conditions have improved from when we started. Please be careful out there. Better yet, stay inside and catch up on some of the stories you’ve missed this week. We have plenty that you likely haven’t seen yet. Take care and make the most of your day.
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