Ask an economist the single most important piece of advice they can impart to a trader: “Stay in it for the long haul and ignore, as much as possible, periodic market fluctuations,” they’ll likely answer.
But when it comes to banking on the spending and loyalty power of millennials – generation Y, a massive demographic who range in age from about 18-34 – it seems that many loyalty providers and marketers are failing to remember those wise economist’s words.
Like the Great Recession, much millennial news remains bleak. The 2011 Consumer Expenditure Survey summed up the situation succinctly:
“Compared with average U.S. consumer units, those headed by persons 25 years or younger earn lower incomes, are less likely to own a home or a car, and spend less on food, gifts, health care, and retirement plans. They are also more likely to rent a home and spend more on education and alcohol.”
Buttressing those findings was another report from WSL Strategic Retail, which found that one in four 18-34 year-olds didn’t have enough money to cover their basic needs. And when it came to loyalty, 37% from another study said they distrust big business. Finally, fewer than half (47%) said brand allegiance was “extremely” or “somewhat” important for items like groceries. Of course this is all augmented and universally summed up by some basic rational and emotional habits of millennials: they’re simply spend thrifty and show little or no brand allegiance.
So where’s the good news?
The truth is that today’s millennial malaise will pass. They are nearly as large as the demographic group of their parents, the baby boomers, and additional study data counters the above doom and gloom with this upbeat fact:
By 2017, millennials will have more spending power than any generation.
And while these echo boomers are price sensitive and flighty when it comes to brand loyalty, that doesn’t mean they’re an unreachable group – far from it really. Sources agree on these posits about gen Y:
- Millennials are the most tech-savvy demographic
- Gen Y mistrusts big companies, yet are more inclined to trust the opinions of friends, virtual or otherwise
- Millennials rely on a host of social media outlets to make informed, if not collective, decisions
- They are the most omnichannel prescient, and expect to communicate and be communicated to by preferences they set
It seems more than ever, building millennial loyalty will come down to experience and not price. And that’s a statement that will grow more accurate as they continue maturing. The good news about being brand agnostic even in to one’s thirties means that for marketers, there’s more time than ever to actually break through and sway these gen Y-ers into repeat purchases and turn them into loyal, highly engaged behaviors.
That doesn’t sound like bad news at all.
Betting on millennials today might seem as foolish as investing in Apple Inc. when its 2002 stock price hovered around $14 a share and Microsoft was trading in the forties, fifties and sixties – except for the fact that everyone no knows that Apple’s price per share has increased a whopping 6,813%! (Not adjusted for inflation)
With that kind of logic, millennials really are a safe bet worth billions – if given time to mature. Remember, by 2017 millennials will have more spending power than any generation. With that maturation time ahead, loyalty programs should start banking on this future reality today.