At 50 million strong in the U.S. today, millennials, defined as adults aged 18-34, are demonstrating more volatility and showing less fiscal confidence than average shoppers. These views are significantly impacting their purchasing attitudes and behaviors. Understanding these shoppers is critical to CPG and retail success, because millennials are predicted to spend $65 billion on CPG products during the next decade. SymphonyIRI announced these and related findings of its inaugural SymphonyIRI Shopper Sentiment Index in the latest Times & Trends research, “Millennial Shoppers: Tapping into the Next Growth Segment.”
Findings from the Shopper Sentiment Index reveal that millennial shoppers have demonstrated a more cautious and volatile outlook compared to other age groups during the past 18 months. This reflects the environment in which they live at a critical juncture in their adult lives. For various reasons, millennials tend to head larger-than-average sized households. Meanwhile, they have relatively low levels of household income. They are 11% more likely to have incomes of $25,000–49,000, 14% more likely to have incomes of $50,000–99,000, but 18% less likely to earn six figures than other Americans. As an added hardship, the recent recession has hit millennials hard; the Bureau of Labor Statistics reports a 2011 unemployment rate for this group of 12%, as compared to 9% for the general U.S. population. Underemployment, too, is a huge challenge.
SymphonyIRI’s MarketPulse survey also notes that millennials are coping through several money-saving activities. This group is 46% more likely to use at-home beauty treatments to save money, and is also 18% more likely to “self-treat” where possible to avoid spending money on doctor’s visits.
Another report finding is that communication through new media has an outsized impact on millennials. A group that has grown up in the age of digital media and smart devices, this technology-savvy group is the first “always connected” generation. As expected, new media are essential to millennials’ process of learning about CPG products. When making brand decisions, millennials are 262% more likely than the average shopper to be influenced by smartphone apps, 247% are more likely to be influenced by blogs or social networking sites, and 216% are more likely to be influenced by in-store touch screen displays.
“Millennial shoppers remain an important group to consider when creating pricing and marketing plans,” says John McIndoe, senior vice president of marketing, SymphonyIRI. “A nuanced group that behaves much like the savvy, cost-conscious consumers of the recent recession, they are very different in how they interact with CPG brands and in how they seek deals. Understanding the unique characteristics of the millennial generation, or any group of shoppers, is essential to building powerful and lasting relationships.”
This newly released Times & Trends report is based on the findings of SymphonyIRI’s second quarter MarketPulse research, an ongoing survey series that studies and analyzes CPG shopper attitudes, perceptions and actions impacted by the economy. MarketPulse also reports on the economy’s impact on shoppers’ personal financial situations, lifestyle and money-saving strategies.
SymphonyIRI designed the new Shopper Sentiment Index to shed new light on purchase behavior in terms of price sensitivity, brand loyalty and changes in spending required to maintain desired lifestyles. “The Shopper Sentiment Index was created as another lens to study shopper behavior,” said Susan Viamari, editor of Times & Trends, SymphonyIRI. “Shoppers of all ages, income levels and demographics continue to evaluate and evolve their shopping rituals based on an economy that shows some signs of strength, but still many ongoing signs of weakness.”
The June/July Times & Trends Report, “Millennial Shoppers: Tapping into the Next Growth Segment,” is a free report available from SymphonhyIRI.