How to Sell to MillennialsTo attract millennials to your small business, understand how they think and why they buy.
Millennials make up roughly one fourth of the American population, so you want and need their business. But catering to this demographic, aka Generation Y, means thinking outside the box.
The group, born between 1981 and 1997, has a reputation for being very different kinds of consumers. As Max Soni, founding partner at Qumana and himself a millennial, put it, “The Gen Y segment doesn’t buy your product because of its qualities. It buys your product because of what you as a company believe in. Simply put, they aren’t buying what you do, they are buying why you do it.”
Here’s what you need to know to draw in this demographic.
Millennials have a very different relationship with retail than their parents, and they care about the motivation and integrity of a business in a way that was arguably unimportant in decades past. “To appeal to young people, brands must be authentic and trustworthy,” noted David and Jack Cahn, authors of “When Millennials Rule.”
The Cahn brothers asserted that millennials can spot frauds from a mile away, so a brand must reflect a real identity and not rely on celebrity endorsements.
Businesses must also be tolerant and socially progressive. Taking a stance against the non-negotiable millennial value of equality, for example — for gays, for minorities — is a surefire way to alienate this globally connected generation.
Philanthropy is also important. The Cahn brothers’ research found that more than 80 percent of millennials expect the companies they patronize to make public investments in being good corporate citizens.
They’re willing to spend
Millennials are willing to spend more money as their earning power increases. That’s the contention of Dave Brazier, vice president and group planning director at Cramer-Krasselt.
“A lot has been said about them not having the aspirations of their parents to own nice homes and cars. However, more recently, it’s become evident that this was based more on economics than on beliefs. They are increasingly buying vehicles, and our research says they would also like to own expensive homes, vacation homes and other high end items.”
This generation is willing to spend — but they need to think they’re getting a real value for doing so. “When it comes to judging ‘good enough,’ Gen Y continues to set the bar a little higher,” said Brazier. For example, they did without cars when that bar wasn’t met, when all they could afford was an old beater. Now, said Brazier, an increasing number of millennials are at a point where what they can afford does not feel like a compromise, and they are purchasing cars in greater numbers.
Millennials want alternative financing
Chargebacks911 co-founder Monica Eaton-Cardone contends that some popular conceptions about this generation’s spending and saving habits are myths — or at the very least, that those habits are evolving. She said millennials are both thrifty and good about saving for the future. A recent study from Fidelity shows millennials are well on track for their (still distant) retirement, in fact outpacing their parents.
That has some implications for retailers. “Millennials are largely resistant to credit, with roughly three-quarters of millennials relying on debit cards as opposed to credit,” said Eaton-Cardone. (Your point-of-sale system should be able to handle debit cards.) As a consequence, she said, one way to appeal to Gen Y is through interest-free financing. “And because millennials are so hesitant to take on any kind of consumer debt, it might be wise to allow millennials to pay for larger purchases in installments.”
It’s not all about online
This generation grew up on online — and yes, you should be using social media to court it there, with a strong social media strategy and a blog, too. According to one U.S. survey, 37 percent of younger millennials said they feel they’re “missing something” if they aren’t on Facebook or Twitter every day — and that was back in 2013. (Find out what your Facebook page tells the world about your business.)
But Gen Y doesn’t shun old-fashioned shopping experiences. Pam Danziger, author of “Shops that POP! 7 Steps to Extraordinary Retail Success,” noted that shopping and buying are two different things. For a specific purchase, Gen Y might instinctively turn to their tablets, “but if they want a shopping experience, they much prefer to go to small specialty retailers that offer them something else besides the same old, same-same offerings at the malls or in big boxes.”
So make sure your products, and your shop, offer something special.