7 facts every business should know about millennials
“I hope I die before I get old.” The Who’s timeless lyric from “My Generation” still captures the underlying tensions that exist between generations. No matter the generational label or decade, young people have always felt misunderstood, and today is no different.
You might have heard that millennials are narcissistic, coddled, and disengaged. Yes, they take a lot of selfies, love their phones, and believe that social media is integral to their lives and relationships. But according to various surveys, they’re also more informed, civically-engaged, and open-minded than conventional wisdom might lead you to believe.
As the most populous, educated, and diverse generation in American history, millennials are fundamentally changing the landscape of the economy. Whether you’re hiring millennials or trying to sell them a product or service, business leaders should rethink the cliché stereotypes and consider the data to understand their realities, behaviors and trends. Here’s what you need to know:
They have massive spending power — but income is clustered at the top
Over the next five years, the purchasing power of millennials is projected to increase 133% from $600 billion to $1.4 trillion. But spending power will vary widely across the generation. Mirroring broader trends, wealth inequality among young people has accelerated sharply over the past decade. The median net worth of the top 20% of millennials is now eight times the median net worth of the bottom 80% — twice the ratio from 2000. As they get older, the income gap between affluent, college-educated millennials and those without a college degree will continue to worsen.
They have a complex relationship with Wall Street
Today’s young people came of age during the financial crisis in 2008 and have entered the workforce — if they were able to get a job — with record-high levels of student debt. Wall Street has a perception problem when it comes to millennials, as 73% of them prefer financial products from a technology-driven company over a traditional financial services firm. And as the number of recent graduates increasingly take jobs with tech startups, investment banks and private equity firms are looking less attractive as employers.
Millennials are migrating to cities and driving the success of the shared economy
This generation is moving to cities after college, and they’re staying there indefinitely. For the first time since the 1920’s, U.S. cities are growing faster than everywhere else in the country combined. This trend is impacting transportation, housing, and home ownership across categories. Millennials are using public transit 40% more and cars 23% less. Plus, they are twice as likely to participate in the sharing economy – from ride-sharing to apartment rentals.
Technology is a way of life
From home to health to personal services, millennials are adopting new technologies and will spend money with the companies that meet their increasingly high standards for new and innovative products. More than half of millennials plan to buy connected “Internet of Things” home devices in the next five years, and 7 out of 10 prefer to manage their health using mobile apps. Given this generation’s exposure to technology since childhood, their expectations will only continue to favor cross-channel and cross-platform experiences that are consistent, fast and provide actionable data.
They’re leading the shift in media consumption habits
The media landscape has drastically changed and will continue to do so. Millennials can access content anywhere, anytime and on any device, which has huge implications for traditional TV and cable. It also shouldn’t be surprising that with the rejection of traditional formats comes the rejection of traditional advertising. Indeed, 70% of people under 30 use ad blockers, and traditional TV commercials are increasingly irrelevant.
But new forms of advertising look promising. Click-through rates for Mic’s branded content articles outperform display ads by almost 60 to 1, which is why we don’t allow banner display advertising to interrupt their reading experience. Despite the easy money to be made, annoying display ads are a turn-off to readers and therefore don’t add value to brands.
They’re more loyal to employers than previous generations
Millennials recently surpassed Gen X as the largest population in the workforce, and this trend will only continue as more millennials enter the job market. However, the widely-accepted narrative paints millennials as job-hoppers with no loyalty, which simply isn’t true. This generation may have new attitudes towards flexibility and a work/life balance, but they are loyal to employers who understand and embrace this. Millennials actually stay with their employers longer than Generation X workers did at the same ages; in fact, more Gen Xers spent less than one year at any one job.
They’re skeptical consumers
Millennials are a values-driven generation attracted to brands that stand for something. In fact, 84% of millennials will consider a brand’s values before making a purchase. But millennials also have a sharp radar for authenticity, and initiatives that feel like a cynical attempt to win them over will backfire. Young people are also twice as likely than Baby Boomers to check if a brand’s corporate social responsibility claims are true and supported with specific action. A CSR message means nothing without a plan to back it up.
While it may seem logical to wait a few more years until millennials have aged before focusing your budgets and hiring efforts on them, this generation’s preferences and attitudes are still in flux. Five years down the line, they will have already solidified their habits, worldviews and purchasing choices. If you’re not starting a conversation and building trust with this demographic now, you risk becoming irrelevant in the future.
Chris Altchek is CEO and co-founder of Mic, a media company focused on news for millennials.