Over the next decade, WPP's Geometry Global estimates that millennials – those born between 1980 and the early 2000s – will spend $65 billion on consumer packaged goods. The generation is poised to soon become the most consequential target market, and retailers and manufacturers alike will have to learn how to adjust to their specific preferences – if they haven't already.
We've written before on this blog about how the web and mobile devices have revolutionized how they shop. This certainly plays a big role in how marketers reach consumers. But it's also important to remember that this generation has product preferences that go beyond technology. Identifying these potential growth segments is the key to succeeding in tomorrow's marketplace.
A recent Forbes article argued that millennials are likely to choose private-label brands when the leading national brands fail to offer enough benefits to justify the premium price. This doesn't mean that they exclusively buy private label, but they have proven to be much more discerning when it comes to paying higher prices. This "trade up-trade down mentality" poses a big challenge to retailers and manufacturers, as they have to deal with a moving target, so to speak, when it comes marketing to this cohort.
The overarching point is that millennial consumers want value – even if what they perceive as the best value isn't necessarily the best sticker price. Today, there is a wealth of data sources that provide insight into what products and retail are providing the most value to millennials. CPGs are able to take information from from consumer surveys, household panels and retailer loyalty programs, and slice and dice this data in countless ways. The trick is to get to the key insights at the aggregate level, then drill them down quickly to the market and retailer level in order to develop actionable recommendations and strategies that can be executed at the front lines. However, this is often where companies struggle the most – it's one thing to gain an understanding of the millennial consumer at the macro level, but you need good technology and an analytical framework that can be replicated across the organization quickly and consistently in order to stay ahead of your competition.
Interactive Edge offers a number of creative ways to get the most out of your data and meet the many challenges that your business will face when it comes to commercializing insights across your customer base. Check out the rest of our website to learn more about the services we offer to our clients.