Millennials are the largest generation since World War II, surpassing the Baby Boomers in numbers. This generation will soon have more combined purchasing power than any other generation in history — making them of utmost importance to companies.
On a Webinar for INMA members on Wednesday, tech philosopher and LinkedIn Top Voice Somi Arian shared key findings from her renowned research documentary “The Millennial Disruption.” This documentary sheds light on how markets and behaviours are changing, why so many businesses are failing, and how the survival of legacy brands comes down to engaging the Millennial demographic.
The topic has been relevant for many years, but it has only been in the last three or four years that companies have really begun to think about it. Arian referred to a quote by Jeff Bezos, who said he is often asked, “What’s going to change in the next 10 years?” But he said the more important question is, what’s not going to change?
“You can build a business strategy around the things that are stable in time,” she quoted Bezos as saying.
“When I did the documentary, I was giving a timeline of 15 to 20 years for many of these legacy businesses to get to the point where they could go out of business or struggle deeply,” Arian said. “That timeline decreased from 2017 to 2019. I was thinking of a timeline of five to 15 years. What has happened with COVID-19 is that even that timeline is going faster.”
Rather than worrying too much about what is going to change, focusing on the fundamental things that will still be relevant in five to 10 years is a better strategy, she said.
“The bigger timeline of what’s going on in the 21st century is beyond business and economy. I think what we are going to see in this century is a complete change of humanity. But from a viewpoint of what that means to your business, we need to look at the next five to 10 years and look at what can be stable in time.”
We are increasingly going into the digital economy, which Arian said is a “winner-take-all” economy. But for many large and legacy businesses, their entire structure is not built for this digital model. While companies have been thinking digital-first in recent years, the new reality is digital-only — especially going into the Gen Z generation.
In making the documentary, she interviewed 40 heads of marketing and CEOs to find out their challenges with the Millennial generation. Some of the things they said included:
- “It’s hugely challenging capturing that audience, the non-linear way that they find things, they discover things.” Justine Southaull, Marie Claire.
- “We are facing the newer generation of people who have never been offline.” Christophe Georges, Bentley.
- “Clearly the biggest shift is digital access to information.” Mark Henderson, Grieves & Hawks.
As she was making the documentary, Arian started to wonder if the disruption was the fault of the Millennial generation or the fault of traditional companies and older, non-digital-natives who failed to keep up.
“The truth is, we cannot change their behaviour,” she said. “The next reaction is, can we find a way to dismiss them? Maybe they are not that important. Then it became apparent that was not possible.”
This is because the population numbers and spending of Millennials is by far the largest share of the market.
- Millennials: Born 1980-2000, largest population, spending up by 15%.
- Gen X: Born 1960-1980, smallest population.
- Baby Boomers: Born before 1960, middle-sized population, spending down by 10%.
“Being a Millennial is not just about someone’s age,” Arian said. “It’s about how people’s behaviour is impacted by technology. You may be a Gen X-er or a Baby Boomer, but you may behave more like a Millennial.”
Why are Millennials so different?
This generation is digital-native, and Arian likens that to any other language. English is not her first language, for instance. No matter how fluent she is, it was not what she knew first or is most proficient in.
“When you learn the digital language as an adult, it’s like comparing it to someone who has learned a language in their adulthood. It’s never going to be the same as someone who was born and brought up [in that language]. When we talk about digital natives, this is the difference. And that’s why there is this disconnect between the generations and the brands that are not digital-native.”
When it comes to attracting digital-native Millennials, it isn’t just about creating content aimed towards them. It’s about building an entire ecosystem for the digital native.
“If you’re a newspaper, if you’re a magazine, the chances of being able to capture the Millennial generation are very slim, because the chances are your publication is not going to be digital native,” Arian said.
There are two things companies need to think about: their marketing strategy and the very nature of their business model.
“If the company is not digital-native, it’s going to be very hard to capture a digital-native audience. That is where many companies go wrong. They think they can take a traditional business model and just do some marketing and capture the Millennial generation. That’s not really possible because what’s happened is the customer journey has fundamentally changed.”
Millennials can talk back
This is one of the fundamental changes. “Marketing is no longer a broadcast, it’s now a dialogue,” Arian said. “Millennials want to be able to talk back, and they want it instantly.”
Getting an instant response via chat, for example, is one of the most powerful things for this market. If they can’t have that instant communication, they will go elsewhere.
The digital marketing director of The Economist pointed out the company is no longer in competition with other media companies — it is in competition with every single organisation or individual out there making content for social media.
“The landscape of the competition has changed,” Arian said.
She shared 10 characteristics of Millennials:
- Abundance of choice.
- Speed of change.
- Peers versus seniors (the influencer culture).
- Diversity (only 56% of Millennials in the United States are white compared to 73% of Baby Boomers).
- Different views of career and education.
- Environmental factors.
- Economic climate — they have gone through one major recession already (2008) and about to go through the COVID recession.
- Prefer experience and access, versus ownership (aka peer sharing) — this means less loyalty to brands.
- Health and wellbeing are areas where they are willing to spend money.
- Entertainment and the way they consume it.
(Arian shared an article she wrote that goes into this in more detail.)
So, what is a marketer to do? Should they throw their entire business model away and completely change how they do everything? And what about the Baby Boomer and Gen X consumers still out there?
“I would say that would be the smart thing to do, to ‘throw the baby out with the bathwater’ and completely focus on post-digital, especially with the COVID-19 shift,” Arian said.
The goal of modern marketing
Google had a concept in 2011 called the “Zero Moment of Truth.” The customer has to spend, on average, about seven hours with a brand over 11 touchpoints, and in four different locations, before they buy from it.
“There are not many business models that would adhere to that,” Arian said. “This is beyond advertising. They’re talking about content.” They are also talking about engagement and the amount of time that consumers spend with Google, as well as Facebook, Amazon, and other major platforms.
“It’s about changing the business model and that starts with audience profiling. Understanding who your audience is, how they consume media, and then creating an ecosystem of content, but also of education and entertainment. The product has got to be Millennial-friendly.”
Production and distribution are also two very different things, she pointed out. Media companies tend to focus more on distribution and less on production. For Millennials, their story should be embedded in the final product — not just the brand’s story.
“Everybody in traditional marketing wants to talk about their product, but actually their story is the most important part. What are they giving the consumer that they want or need?”
The company needs to answer the “why” question and prove value to the market. These changes have always happened, but digitalisation has sped that process up tremendously.
In the documentary, Justine Southaull described this change as a “tsunami,” and said getting head of it is almost impossible without significant change. Very few businesses, she continued, have the ability and understanding of what that really requires.
Author and entrepreneur Gary Vaynerchuk said something else Arian believes is true: “People are just now trying to figure out influencers or Facebook or Instagram, and the world has already moved to the next frontier.”
In conclusion, Arian pointed out the many companies she has consulted and spoken to about this shift for digital-native Millennials over the past few years did not adjust enough in time for the COVID-19 shift. Whereas companies such as Netflix and Amazon already had built an ecosystem that was perfectly positioned for it.
“That was a missed opportunity for all of the companies that I’ve been giving this talk to for the past few years, and getting them to change their way, and they didn’t,” Arian said. “And look what’s happened now.”
INMA: If a media company markets itself as a verified news source that can be trusted, what would be the biggest selling point in marketing to Millennials?
Arian: I wish there was a quick response to turn something around by changing this one thing, but it all comes down to your infrastructure. I like The Economist for the interpretation and I can trust it. But I’m not the majority of the [Millennial] population. Your average Millennial is probably going to be more on the entertainment side. Look at how influencers are behaving. There is a really good book I recommend, The Innovator’s Dilemma. There is this infrastructure you have that is inherently not Millennial friendly, and that is the dilemma. One option is to create spin-off brands, maybe not use the same name. And then collaborate.
INMA: Do you think Millennials’ habits and behaviours change across different cultures?
Arian: From my experience, I originated from Iran [but now lives and works in London], and I have team members in India and other countries, I can tell you that actually they are very similar. That’s a good thing, in a way, because digital is a language. When you speak the digital language, it’s a whole new way of communication and a culture into itself. They have much of the same behaviours and needs.
INMA: Does the non-linear way of Millennials mean that things like sales funnels just don’t work, or do they work differently?
Arian: Sometimes they don’t work, and sometimes they work differently. I didn’t start using Uber, for example, because they advertised to me. I used it because one time, a person told me about it, and that was enough because it fit into my lifestyle. If you look at those 10 factors I shared, these are the things that define our behaviour and our preferences. Abundance of choice and speed of change are the most important. See how many of them your business ticks. If you get 80% of them, you’ve got a chance. If it’s less than 80% you’re going to struggle.
INMA: Which experience or value has the highest meaning for Millennials?
Arian: I would say convenience. We have heard a lot about our generation being lazy. I don’t think it’s necessarily about that. We want convenience. We don’t want to have to wait. Convenience combines many of those 10 things.
Header photo courtesy of Laura Stanley from Pexels.