How Millennials Shop-2

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Washington State University *

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491

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Marketing

Date

Feb 20, 2024

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docx

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Uploaded by emmaoboy

Agenda Today, we will be reviewing the article from this last week’s discussion “This Is How Millennials Shop”. In brief overview, the article discussed the primary differences between millennials and everyone else, particularly highlighting their nuanced shopping behaviors, economic importance, diverse purchasing methods, and the enduring influence of price and discounts. To set the agenda today, we’ll be going over both the article and its specific components, as well as the discussion questions. - Who Are They? - Where Do They Shop? - What About Brands? - What Does It Mean? - Discussion Questions Who Are They? Let's define our terms. Millennials are people born between 1982 and 1996, today they're 26 to 42 years old. There are 80 million of them in the US. They spend $600 billion annually and that's 28% of all daily per-person consumer spending. They are forecasted to be 35% of spending by 2030. No matter how you define it, millennial spending is important. ● Millennials, born between 1982 and 1996 (currently 26 to 42 years old), constitute a significant demographic, totaling 80 million in the US. ● They wield substantial economic influence, contributing $600 billion annually, comprising 28% of per-person consumer spending. ● The age group is forecasted to represent 35% of spending by 2030, emphasizing their enduring economic significance. Where Do They Shop? - A majority of millennials make most of their purchases offline. - About a third of millennials make the majority of their purchases on a desktop computer.

- Only 16% of millennials make the majority of their purchases on a mobile devices. - More millennial women shop in stores than men but that could be due to the nature of what they buy. - There's a real difference between older millennials (32-35) and younger millennials (20-23). - Contrary to what you'd expect, the older millennials are more likely than the group as a whole to make a purchase on their mobile device. - Younger millennials are more likely than the group as a whole to make a purchase in a physical store. When they shop for something both online and in a store, they are way more likely to make a purchase in a store than they are online. - One thing that makes millennials like their parents is that almost 80% are influenced by price. - Even as much as they are looking for other values from their products like authenticity, local sourcing, ethical production and a great shopping experience, nothing beats a discount no matter how old you are. What About Brands? Slide 1 Notes - In the world of mergers and acquisitions, resources are invested in acquiring brands with the belief that they lead to higher prices and increased customer loyalty. - What will brands signify in the future, and do millennials truly care about brands? Millennials and Brand Engagement: - Millennials actively engage with brands on social media, however, their engagement is driven by price rather than brand loyalty. - Two-thirds of millennials express a willingness to switch brands if offered a discount of 30% or more. - Only 7% follow brands to support the brand community. Shift in Priorities: - The data suggests brand owners may need to reassess the emphasis placed on brands as a primary motivator for consumer behavior.

Slide 2 Notes Discount-Driven Behavior: - Millennials show a strong preference towards price sensitivity. Millennials will actively search for discounts before making a purchase. Online Shopping Dynamics: - The search for coupons is more prevalent in online shopping, with 72% of millennials actively seeking discounts compared to 52% in physical stores. - The average time spent searching for coupons is three minutes, showing the significance of discounts even in the era of fast and convenient online shopping. Implications for Retailers: - The discount-driven mindset of millennials challenges the reliance on brand loyalty and underscores the need for strategic adjustments in marketing and sales approaches. - Next, Miles will talk more about what this exactly means. What Does It Mean? What does all this tell us about millennial consumers? We know they want different attributes in their products than their parents did and we know that they don't want to buy their parents' brands. What the research also tells us that millennials are not immune to the allure of discounted merchandise. That helps us understand the growth in fast fashion like Zara and H&M as well as off-price retailers like TJ Maxx, Ross Stores and Burlington Coat Factory. It also says that there is treachery in relying too much on brand loyalty. If millennials are willing to change brands for a big enough discount, will retailers ever get out of the cycle of having to discount merchandise to move it out the door? One thing that continues to be true no matter how old consumers are: If the merchandise doesn't motivate a consumer to buy it at its first price, it takes heavy discounting to make a product move. Whether a consumer is millennial, boomer or Gen Z, giving them what they want is the only way for a retailer or brand owner to have a sustainable business. Price is never going to be the way for a brand owner to motivate consumers and make a consistent profit.

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Discussion: The article makes some claims about shifts that can occur in demand given different behavior amongst millennials, as opposed to their predecessors. Do these types of demand shifts make a low-cost strategy more or less viable? Why? Millennials' preference for value beyond price and their willingness to switch brands for better deals suggest that relying solely on low cost can be risky. Brands need to offer additional value through quality, sustainability, or a unique experience to differentiate themselves and build loyalty. What types of industry might provide better opportunities to low-cost firms given these demographic shifts? the price-sensitive nature of millennials creates an opening for low-cost firms in industries where these additional values are less critical. Essential goods, commodities, and basic services, where functionality outweighs brand identity, could be fertile ground for such strategies.

How Millennials Shop-2

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