The new consumer behavior models are the product of a disruptive change that has caught many companies unprepared.
Reading time: 3,15 m
I have already dealt with Millennials in another post and I am again dealing with them to simply show how this generation has undermined entire industries and companies that have not been able to reposition, change the story-telling, adapt and enrich the offering, in other words to innovate.
Born between 1980 and 2000, the Millennials are the first generation to be completely digitalized and have reached adulthood in the new millennium. In the USA, there are 71 million, in Italy about 11 million. Quite confident with technology, endowed with critical thought and strong motivation, millennials have a strong ethical and social commitment, but they are also afflicted by debts and low wages, without the obstacles to climb the social steps, differently from their parents.
All these features have resulted in completely different buying behaviors and consuming attitudes, and not all the marketers have been ready! When millennials have become adult, the decline of several industries started. But this has absolutely nothing to do with many stereotypes and superficial labels to Millennials: dependent on the phone, always on social media, big babies, and so on.
A survey by CB Insights has analyzed 12 sectors in the USA to understand the real impact of the new behaviors. Grain sales declined because of the possibility of other more practical and low-sugar options. That means the problem is not cereals, but how marketing innovations could have made them more attractive. Similar story for restaurants: millennials loves to eat at restaurant, but they have changed the rules. Low income, job insecurity and other factors enhance many of them to bring healthy lunch from home. Moreover, when they can afford it, millennials prefer quality restaurants and healthy meals. Some restaurant chains would have had to reposition and innovate their offer. The shopping has changed with a widespread use of e-commerce platforms that allow a wide selection, convenience and home delivery. And yet, Millennials continue to love traditional shopping in stores that have been able to link cheap, urban and informal atmospheres under their brand. H&M and Zara teach! But the strongest change in shopping is to rent; luxury brands no longer have the symbolic value they once had and objects capable of giving value to social status are different. Rent the Runway is a company founded less than ten years ago that rents luxury clothes and has grown incredibly. Even in fitness, US millennials spend more than parents and grandparents, but they prefer group classes rather than individual training. Even beer pays the price of millennials, who prefer good wine.
To conclude, it is useless to judge the millennials and stamp them with the most disparate labels. The decline of many companies depends on the total inability to identify new trends and anticipate them with repositioning, different storytelling, more engaging offering. In other words, those who failed did not innovate. Marketing must play this strategic role in a company: understanding generation’s habits and preferences is essential to identify new consumption patterns and to meet them.
The history of millennials shows that consolidated positions on the market do no longer exist!