In the third and final blog on the findings of the May 2017 Cooper Parry Corporate Finance ‘Consumer Outlook’ report, Ben Rookes, Corporate Finance Partner, looks at how millennials are driving new trends and the impact this is having on the retail sector.
A desire for experiences rather than acquiring ‘stuff’ is a key factor that differentiates millennials and Generation Z from other generations. Research carried out by Eventbrite found that 78% of millennials would rather spend money on an experience or event than an item. This need for experience is a phenomenon known as FOMO: Fear of Missing Out.
Such is the prevalence of social media among millennials, they are constantly bombarded with images and videos of people having awesome experiences. Whether it’s a Snapchat story of one of their favourite celebrities at an incredible location, or their friend’s latest Instagram post of an adventure of a lifetime, this constant exposure fuels their FOMO and makes them want a piece of the action.
Snapchat has 200 million active users globally and is a tool that can be utilised for engaging with millennials by creating experiences.
Sainsbury’s successfully did this by launching a festive filter – an interactive overlay for photographs that gave users 24 hours to become the main character of their Christmas campaign and sing along to their song.
By choosing to interact with consumers via such a powerful and influential social media channel, Sainsbury’s demonstrated that it understands what it takes to connect with millennials.
Millennials’ love for experiences has had a big impact on the travel and leisure industry. In 2016, travel and leisure related stocks in the US outperformed retailers, in part due to changing way millennials are choosing to spend their money.
According to research by Airbnb, millennials look for something more personal when they travel – part of the formula for the company’s success. This understanding, coupled with the accessibility of the service through a smartphone app, make it an irresistible offer.
Health & Fitness
The UK fitness industry is a huge consumer market, reported to be worth £4.4bn in 2016, and is continuing to grow.
According to Nielsen’s ‘Les Mills Global Fitness Survey’, millennials have embraced health and fitness more than any other generation, seeing health as more of a lifestyle to pursue and embracing it as part of their overall wellbeing.
Like ‘experiences’, social media, particularly YouTube, has had a big part to play in sparking millennials’ interest in lifestyle fitness.
YouTube now reaches more 18-49 year olds than any TV channel, so it’s easy to see how it can be so influential. Fitness ‘vloggers’ (video bloggers) have helped drive this trend, creating online communities of like-minded millennials who are trying to reach the same goals.
The trend hasn’t gone unnoticed by retailers either, with companies like ASOS expanding its fitness clothing and accessories ranges in order to meet consumer demand and take advantage of this lucrative market.
The importance of corporate social responsibility to the millennial consumer is a trend retailers shouldn’t ignore.
Seventy-three per cent of millennials are willing to spend more on a product if they believe it will have a positive social impact.
If the large consumer force of millennials see it as important, companies have an opportunity to improve the value of their brand by being more environmentally and ethically conscious.
Millennials are a generation of trend setters. In order to ensure that this huge consumer market is successfully targeted, retailers must ensure they understand what makes millennials tick and adapt their product, advertising and marketing strategies accordingly.