News Feed Item

The Millennial Generation Is Changing the Face of Consumer Marketing

Study by BCG Shows That Millennials, Who Account for $1.3 Trillion in Direct Annual Spending, Engage More Extensively With Brands Than Do Older Consumers and Expect a Two-Way Marketing Relationship

DALLAS, TX -- (Marketwired) -- 01/15/14 -- The Millennial generation not only represents the consumer market of the future. It is also transforming the way in which companies must market their products both online and offline in order to be successful, according to a report released today by The Boston Consulting Group (BCG).

The report, titled The Reciprocity Principle: How Millennials Are Changing the Face of Marketing Forever, says that U.S. Millennials -- the generation of people now 18 to 34 years old -- engage with brands far more extensively and personally than do older generations, and they expect their values to be reflected in the brands they purchase. Because Millennials are heavy users of social media and mobile devices, the impact of their brand choices and feedback is greatly amplified and accelerated. BCG's global research suggests that the findings about U.S. Millennials and their impact on marketing reflect similar trends among Millennials in other developed countries.

"The conventional linear and rational approach to marketing has been a process in which companies defined their brands and pushed brand and marketing messages at consumers. But this doesn't work well with Millennials," said Christine Barton, a BCG partner and the lead author of the report. "Millennials want and expect a two-way, reciprocal relationship with companies and their brands. As a result, modern marketing has become an ecosystem driven by interactions among marketers, customers, and potential customers, who help define brands and influence their success."

The report is based on findings from surveys in 2013 conducted by BCG's Center for Consumer and Customer Insight involving nearly 4,000 U.S. Millennials and non-Millennials. The surveys covered behavior, values, brand engagement, marketing tactics, and other topics. U.S. Millennials already account for an estimated $1.3 trillion in direct annual spending, of which at least $430 billion is estimated to be discretionary, nonessential spending. These estimates do not include substantial Millennial-influenced spending, such as by parents and grandparents. And this sum will grow dramatically as more Millennials reach peak earning and buying power. By 2030, the projected 78 million Millennials in the U.S. will outnumber the projected 56 million baby boomers (ages 50 to 69).

Millennials are driving a transformation of consumer marketing across five elements: reach, relevance, reputation, relation, and referral. Several findings from the BCG surveys illustrate these points:

  • Reach. Millennials engage much more extensively with brands through social media and mobile devices than do older generations. Fifty-two percent of Millennials surveyed said they use social media to "like" a brand -- compared with 33 percent of boomers surveyed -- while 39 percent post product reviews. Twice as many Millennials as boomers check prices, look up product information, or search for promotions on their mobile devices while in a store.
  • Relevance. The purchasing decisions of U.S. Millennials are influenced by more people -- and different types of people -- than are the choices of older generations. Less than half of Millennials said that they trust expert advisors such as doctors or financial advisors, for example, compared with 61 percent of non-Millennials. Instead, Millennials reported that they are most influenced by family, friends, and strangers. Millennials were also twice as likely as Gen-Xers (ages 35 to 49) to say that they were influenced by celebrities and four times more likely than boomers.
  • Reputation. Millennials identify with brands more personally. Fifty percent of U.S. Millennials ages 18 to 24 and 38 percent of those ages 25 to 34 agreed that brands "say something about who I am, my values, and where I fit in." Forty-eight percent of young Millennials reported that they "try to use brands of companies that are active in supporting social causes."
  • Relation. To cultivate a relationship with Millennials and sustain brand loyalty, companies must establish a dialogue with them individually and in small groups. Nearly twice as many Millennials as boomers cited "availability 24-7" as the most important thing that brands can do to engage them.
  • Referral. Engaging with Millennials is also important because they are more eager than other generations to share their opinions with friends and on social networks. More than half of U.S. Millennials said that they are willing to share their brand preferences on social media, for example, compared with 31 percent of baby boomers. More than half also said that people seek them out for their knowledge and opinions of brands, compared with only 35 percent of boomers.

The report advises companies to make marketing to Millennials a strategic priority and master reciprocal marketing. "This is important not only because Millennials represent the market of the future over the medium term in developed economies," said Barton, who is global leader of BCG's consumer sentiment and generational research topics. "It is also critical because Millennials are the vanguard of large-scale changes in marketing behavior and media habits among older consumers and future consumers."

The report suggests several actions companies should take if they haven't done so already. First, they should set clear, measurable goals for marketing to Millennials. Companies must also transform their organizations by breaking down silos that separate different marketing and media functions, building the new capabilities required to compete in a reciprocal ecosystem, and devoting greater investment to more innovative media and tools that can measure short- and long-term returns from marketing.

"The imperative to engage and win over the Millennial generation represents an entirely new set of challenges and tactics for marketers in developed economies," said Lara Koslow, a BCG partner who is global coleader of the firm's marketing topic area. "This generation is ushering in the end of consumer marketing as companies have long known it."

The report advises that companies reach out to Millennials wherever they are with a cross-media, cross-channel, cross-device brand presence. Brands should reinforce their authentic reputations and brand soul with the relevant values, personality traits, and communications. They should relate to Millennials by moving from push communications to two-way, open dialogue. And they should cultivate referrals among Millennial customers and employees.

To arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or [email protected].

About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 81 offices in 45 countries. For more information, please visit bcg.com.

About bcgperspectives.com
Bcgperspectives.com features the latest thinking from BCG experts as well as from CEOs, academics, and other leaders. It covers issues at the top of senior management's agenda. It also provides unprecedented access to BCG's extensive archive of thought leadership stretching back 50 years to the days of Bruce Henderson, the firm's founder and one of the architects of modern management consulting. All of our content -- including videos, podcasts, commentaries, and reports -- can be accessed by PC, mobile, iPad, Facebook, Twitter and LinkedIn.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smar...
Complete Internet of Things (IoT) embedded device security is not just about the device but involves the entire product’s identity, data and control integrity, and services traversing the cloud. A device can no longer be looked at as an island; it is a part of a system. In fact, given the cross-domain interactions enabled by IoT it could be a part of many systems. Also, depending on where the device is deployed, for example, in the office building versus a factory floor or oil field, security ha...
Without lifecycle traceability and visibility across the tool chain, stakeholders from Planning-to-Ops have limited insight and answers to who, what, when, why and how across the DevOps lifecycle. This impacts the ability to deliver high quality software at the needed velocity to drive positive business outcomes. In his general session at @DevOpsSummit at 19th Cloud Expo, Eric Robertson, General Manager at CollabNet, will discuss how customers are able to achieve a level of transparency that e...
SYS-CON Events announced today that Transparent Cloud Computing (T-Cloud) Consortium will exhibit at the 19th International Cloud Expo®, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The Transparent Cloud Computing Consortium (T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data proces...
Governments around the world are adopting Safe Harbor privacy provisions to protect customer data from leaving sovereign territories. Increasingly, global companies are required to create new instances of their server clusters in multiple countries to keep abreast of these new Safe Harbor laws. Is it worth it? In his session at 19th Cloud Expo, Adam Rogers, Managing Director of Anexia, Inc., will discuss how to keep your data legal and still stay in business.
Today every business relies on software to drive the innovation necessary for a competitive edge in the Application Economy. This is why collaboration between development and operations, or DevOps, has become IT’s number one priority. Whether you are in Dev or Ops, understanding how to implement a DevOps strategy can deliver faster development cycles, improved software quality, reduced deployment times and overall better experiences for your customers.
Successful transition from traditional IT to cloud computing requires three key ingredients: an IT architecture that allows companies to extend their internal best practices to the cloud, a cost point that allows economies of scale, and automated processes that manage risk exposure and maintain regulatory compliance with industry regulations (FFIEC, PCI-DSS, HIPAA, FISMA). The unique combination of VMware, the IBM Cloud, and Cloud Raxak, a 2016 Gartner Cool Vendor in IT Automation, provides a co...
Donna Yasay, President of HomeGrid Forum, today discussed with a panel of technology peers how certification programs are at the forefront of interoperability, and the answer for vendors looking to keep up with today's growing industry for smart home innovation. "To ensure multi-vendor interoperability, accredited industry certification programs should be used for every product to provide credibility and quality assurance for retail and carrier based customers looking to add ever increasing num...
@ThingsExpo has been named the Top 5 Most Influential M2M Brand by Onalytica in the ‘Machine to Machine: Top 100 Influencers and Brands.' Onalytica analyzed the online debate on M2M by looking at over 85,000 tweets to provide the most influential individuals and brands that drive the discussion. According to Onalytica the "analysis showed a very engaged community with a lot of interactive tweets. The M2M discussion seems to be more fragmented and driven by some of the major brands present in the...
In an era of historic innovation fueled by unprecedented access to data and technology, the low cost and risk of entering new markets has leveled the playing field for business. Today, any ambitious innovator can easily introduce a new application or product that can reinvent business models and transform the client experience. In their Day 2 Keynote at 19th Cloud Expo, Mercer Rowe, IBM Vice President of Strategic Alliances, and Raejeanne Skillern, Intel Vice President of Data Center Group and ...
Apache Hadoop is a key technology for gaining business insights from your Big Data, but the penetration into enterprises is shockingly low. In fact, Apache Hadoop and Big Data proponents recognize that this technology has not yet achieved its game-changing business potential. In his session at 19th Cloud Expo, John Mertic, director of program management for ODPi at The Linux Foundation, will explain why this is, how we can work together as an open data community to increase adoption, and the i...
Machine Learning helps make complex systems more efficient. By applying advanced Machine Learning techniques such as Cognitive Fingerprinting, wind project operators can utilize these tools to learn from collected data, detect regular patterns, and optimize their own operations. In his session at 18th Cloud Expo, Stuart Gillen, Director of Business Development at SparkCognition, discussed how research has demonstrated the value of Machine Learning in delivering next generation analytics to impr...
Data is the fuel that drives the machine learning algorithmic engines and ultimately provides the business value. In his session at Cloud Expo, Ed Featherston, a director and senior enterprise architect at Collaborative Consulting, will discuss the key considerations around quality, volume, timeliness, and pedigree that must be dealt with in order to properly fuel that engine.
All clouds are not equal. To succeed in a DevOps context, organizations should plan to develop/deploy apps across a choice of on-premise and public clouds simultaneously depending on the business needs. This is where the concept of the Lean Cloud comes in - resting on the idea that you often need to relocate your app modules over their life cycles for both innovation and operational efficiency in the cloud. In his session at @DevOpsSummit at19th Cloud Expo, Valentin (Val) Bercovici, CTO of So...
SYS-CON Events announced today that StarNet Communications will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. StarNet Communications’ FastX is the industry first cloud-based remote X Windows emulator. Using standard Web browsers (FireFox, Chrome, Safari, etc.) users from around the world gain highly secure access to applications and data hosted on Linux-based servers in a central data center. ...