Millennials: Gen Y Reshaping the Economy
Are You a Millennial? If you are born between 1981 and 1996, then, yes, you are one of them!
Millennials, also referred to as Generation Y, account for nearly a quarter of the world’s population and make up for one-third of the global workforce. They are indeed one of the most powerful groups of consumers today, those whose spending patterns can drastically change the global economy. Millennials have grown up witnessing significant improvement in all aspects of technology, including the advent of the internet. Technology is an indispensable tool in their lives - it has substantial impact on the way they live and do business.
The staggering presence of social media has completely changed the way businesses market themselves. A recent analysis done by Pew Research Center reports that 92% of Millennials own smartphones and 85% use social media. Traditional advertising methods – advertisements through newspapers, magazines, TVs, radios, etc - would no longer suffice to win over millennials. According to Forbes, Millennials hate seeing ads, yet 58% of them do not mind if it’s from their favorite digital stars or influencers (Merriam-Webster defines influencer as a person who is able to generate interest in something by posting about it on social media) [4]. A marketing strategy, in which businesses collaborate with influencers to appeal to consumers, is called Influencer Marketing. It is often effective, because influencers who have gained trust and maintained meaningful connections with their followers are capable of winning their trust over for a business brand, too.
However, no advertising method, including influencer marketing, should be deemed as a sure-fire marketing strategy targeting Millennials. Not long ago, an 18-year-old Instagram star Arianna Renee shared a post about her failure to sell 36 t-shirts to her 2.6 million followers, expressing disappointment that no one who had initially supported the launch of her brand and promised to buy her products “kept their words” (instagram @arii). After her post went viral, people started to question how influential influencers are, calling the whole boom an ‘influencer bubble’. While social media can provide businesses with insightful demographics and user information, they can also be misguiding. Influencer marketing does not work for everyone, and with technology evolving and consumer interests shifting so rapidly, businesses should prepare themselves to catch new population’s attention with right marketing strategies at the right time.
Despite being powerful consumers today, a large number of Millennials are struggling with student loan debts. A college degree is more important than ever in today’s competitive job market, despite skyrocketed college tuition fees and high unemployment rates even amongst college graduates. Millennials, who are bounded by a social contract saying “Everything will work out, if first you go to college” [1], have been pressured to take on student loans to complete their degree. As a result, college graduates under 35 are twice as more likely to have student loans than Generation X (born between 1965 and 1980). Nationally, there exists a total of $1.3 trillion student debt, meaning each person is indebted with $35,000 [2]. Due to such financial burdens they have, many Millennials are risk averse; more and more Millennials are becoming reluctant to invest and would rather hold onto cash. Only 19% of Millennials said they put their retirement savings into stocks, which is comparable to 26% of Generation Xers. Yet, it’s interesting because they are reported to be the ones with the highest retirement confidence [2].
What do Millennials value, then? For Millennials, experience is often considered more valuable than a sense of ownership. They seek to build unique, meaningful experiences. According to Airbnb, most Millennials prioritize traveling over owning a home or paying off debt, and over 80% of them look for unique travel experiences. Their focus on experience has greatly contributed to the growth of the sharing economy. For example, rather than investing in buying their own cars, many utilize car sharing services like Uber and Lyft. This sharing economy lets consumers choose the most cost-efficient option by offering a large variety of options. Uber targets a large audience by offering a wide variety of services from luxury rides for extra money and UberPool in which you share the ride for a reduced cost, and it has been highly successful. Airbnb, a house-sharing service that offers an opportunity for travelers to find cheap accommodations, also generated $93 million in profit in 2017 and experienced 120% growth in a year, thanks to an increase in the number of Millennial travelers.
Millennials do things differently from the past. They are the generation marked by unprecedented business style, consumption patterns, and buying decisions. Millennials are indeed reshaping the economy.
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