First: A New Type of Expedia Coupon.
Expedia recently announced that they’ll be offering cruise voucher codes exclusively through Snapchat. On top of that, these coupons were for travel ‘experiences’, meaning that the destination, flight, and shuttle service would include Spotify playlists that they traveler could choose ahead of time. The trip itself is as individual as the person.
Many businesses are reporting that millennials are rejecting the cookie-cutter style of travel and instead are focusing on ‘experiences’ that will create memories for a lifetime. You can’t have the same vacation everyone else is having…instead you need to visit, or experience something that is as unique as you are.
Second: $200 Headphones Are What Millenials Crave.
It may surprise you (if you’re over 30, that is) to learn that the fastest growing segment of the audio equipment market is headphones priced at $150 and above. This list of the best headphones under $200 has to be updated weekly simply to keep up with demand. Gone are the days when the headphones market was a race to the bottom: they were an add-on purchase, usually in the impulse section of an electronics store (remember those?) and cost anywhere from $5 to $30. They were frequently bundled with an expensive piece of electronics (like a portable stereo) just to entice people to buy.
10 Ways Millennials Are Changing How Companies Do Business
As of 2017, the millennial population has surpassed baby boomers in size, becoming the largest generational cohort in America. However, millennials’ spending habits are entirely different compared to spenders of generations. These various patterns are creating profound changes in how companies deal with this populous and diverse generation; those that don’t (can’t) change will miss out on a significant segment of the economy. In short, companies that want to do business with millennials must first understand this generation’s views on consumption, personal finance, and social attitudes.
The two recessions that took place in the early part of the 21st century have affected how many young adults view personal finance. In fact, the Great Recession has made many millennials more risk-averse, which is why they tend to save more money than earlier generations. Outside of college debt, young people are avoiding credit card debt, expensive auto loans, and hefty mortgages. Therefore, to attract more millennial customers, those industries are having to develop creative products. For example, many financial companies now offer cash-back rewards on purchases.
Millennials are the most educated generation in history. Many young people are staying in college longer, while putting off a career, getting married, and starting a family. More young adults are living at home with their parents than with a spouse. Therefore, industries that depend on household formation are doing less business than in the past. Those industries will need to offer creative products and services that appeal to single, college-educated young adults.
A lot of millennials have accumulated substantial student loan debt, so they have less money to spend on leisure items. Companies like Ebates and Groupon appeal to frugal millennials because they offer deep discounts on valuable products and services. Also, many fast-food chains now offer value meals under $5, which are popular with young people on a budget. The major cellphone carriers all offer sub-brands with less expensive phone plans and no contracts. Those sub-brands are popular with young, single adults that don’t need a more expensive family plan.
Although millennials are the most educated generation in history, many of them are underemployed; even those with college degrees work in jobs that only need a high school diploma. Those less-lucrative careers leave many young adults with less money to spend on big-ticket items such as cars, which some are forgoing in favor of ride-sharing services like Uber and Lyft.
Since many millennials make less money than earlier generations, they are more frugal, and many are shopping for bargains online. Brick-and-mortar retailers have struggled to attract their business, and once-major department stores such as JCPenney, Macy’s, and Sears have been closing stores because of declining sales.
Young adults enjoy staying connected with their mobile devices, and those devices have changed how young people see advertising. Because so many millennials don’t watch television from cable or satellite providers, they miss out on seeing traditional commercials. Therefore, brands that want to promote their products to this generation must develop mobile-friendly ads to reach them.
Millennials consume entertainment differently too. Movie theater sales are dropping because increasing numbers of young people are opting to watch movies from streaming services online. They also watch their favorite shows on-the-go from their mobile devices. Consequently, some companies have changed the ways they deliver content. For example, DirecTV now lets customers stream television content on mobile devices that use AT&T.
Millennials are also more socially conscious than earlier generations, and many prefer to do business with brands that promote a social cause. For example, young consumers who are concerned about the environment and worry about climate change like buying products made from recycled materials.
Fewer young adults are becoming homeowners and are opting to rent or live at home with their parents instead. Many are unable to buy a home because they don’t make enough to afford the mortgage. Also, the subprime mortgage crisis has made it more difficult for first-time buyers to get approved for a mortgage without a down payment. Millennials that do become homeowners are often buying smaller houses. Home builders are responding by constructing homes that are more affordable and “green.”
Many millennials, having embraced minimalism, are less likely to waste resources (particularly those that might become scarce), and because they are more careful about how they spend their money, they tend to avoid buying too many non-essentials. Therefore, eco-friendly brands are in a better place to attract business from young minimalists.
Since millennials approach personal finance and shopping differently, brands must adapt to stay competitive. Brands across different industries are creating affordable alternatives for frugal millennials. For example, home builders have started constructing tiny houses; fast-food chains offer cheaper value meals and entertainment providers stream their content on digital platforms for less money. Socially conscious young people like doing business with brands that promote social causes (environmental, humanitarian, social justice, etc.). Tech-savvy millennials are more likely to shop for bargains online instead of going to the mall. Therefore, companies that do business with millennial consumers have to develop products and services that appeal to their unique consumption habits.