By Madu Ratnayake
‘Millennials’,the generation born from the early 1980s to the early 2000s, are driving a major paradigm shift in the business-consumer relationship.
Currently numbering 2.4 billion people according to the Deloitte millennial survey, millennials will make up 75 percent of the global population by 2025. Hence, their attention and considerable spending power are greatly sought after by marketers.
However, the tried and tested traditional methods of attracting consumers do not work on this fiercely competed for segment. Marketers will need to rethink their approach and align their views with those of millennials if they wish to connect with them.
Not only are Millennials not swayed by advertising but also their preference for material objects differs from that of their predecessors. 78 percent of Millennials prefer to spend their money on an experience rather than on the accumulation of things. And when they do spend money on products, it is for access without the burden of ownership.This phenomenon is driving the current rise in the sharing economy (the model adopted by Airbnb, Uber, etc.),which by 2030 will be worth 335 US billion dollars. 57 percent f millennials say access is the new ownership, and 68% of Millennials say that they were willing to rent or share personal items.
So, if traditional methods do not work, how do we reach this rapidly growing segment of the population?
Authenticity is the key to engaging Millennials. According to an Elite Daily study in 2015,43% of Millennials consider authenticity more important than content when consuming news. This is the same reason why 33% rely mostly on blogs before they make a purchase compared to less than 3% for TV news, magazines and books. They need to trust the company or brand before they are willing to listen to what they have to say. Brands can no longer shout their messages at customers and assume their message is having the desired effect or even getting through.
However, before they can be authentic, brands need to occupy spaces that Millennials frequent and be present in the channels that they use in order to engage them. This means that brands need to be active on social media where 63% stay updated on brands. They also need to be accessible through apps on smart phones as 87% of Millennials are within reach of their smartphones at all times and are 62% more likely to be influenced by an app than traditional methods.
Once brands have established a presence on social platforms, they will need to encourage in conversations, listen and act on their customers’ suggestions and be transparent in their actions if they want to build trust and engagement. For this purpose, brands should not always be selling their products but rather interacting in subject areas which are still true to their brand story and also of interest to Millennials. And while this strategy may help convert a casual fan into a consumer, it also needs to translate into good product references because 51% of Millennials rely on a recommendation from a stranger before making a purchase and 49% rely on a recommendation from friends and family.It is no longer about making a sale but forging long lasting relationships to convert your consumers to real brand ambassadors.
It is clearly evident that Millennials are transforming the retail landscape and the marketing strategies of yesteryear will no longer work. While in the past brands had decades to adapt to new technology, that period is shrinking rapidly with the rate of new technological advancement. If a brand does not want to be left behind, they will clearly need to adapt quickly to a new way of engaging Millennial consumers.
(Madu Ratnayake is Chief Information Officer and General Manager at Virtusa.)