Forget millennials, check out baby boomers, GenX, Xennials
Management consulting company Gallup says millennials on an average spent $20 less per day in 2016, compared with their 2008 counterparts. This is attributed to increasing loans, debts and stagnant incomes. The report highlights that in 2008, people in the 18-to-29-year bracket spent almost $93 per day, which is now down to $74.
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How the government's MDR reimbursement decision impacts youAs brands go ga-ga over millennial consumers, their spending prowess and tech-savvy buys, a report suggests millennial spending is actually shrinking.
Management consulting company Gallup says millennials on an average spent $20 less per day in 2016, compared with their 2008 counterparts. This is attributed to increasing loans, debts and stagnant incomes. The report highlights that in 2008, people in the 18-to-29-year bracket spent almost $93 per day, which is now down to $74.
Should brands take a cue and diversify their focus on more consumer group such as the baby boomers and Generation X?
“Millennials in India constitute almost 50% of the working population and are the ones with disposable incomes that drive consumerism. It is hard for any emerging brand to ignore this segment,” says Smita Murarka, head – marketing and e-commerce, Amante, MAS Brands India.
She says for Amante, their core communication is with young millennials who are early jobbers and are looking to upgrade their fashion choices. "While our highest value comes from late millennials and Gen X (consumers born between the mid-60s to late 70s) who are our brand advocates,’’ says Murarka.
Experts say while millennials are crucial, it is high time brands expand their focus on other consumers groups. Such as Generation Z (the demographic cohort born between the 90s to mid-2000s), baby boomers (those born between mid-50s and mid-60s), xennials (born between mid-70s to early 80s) and Gen X.
“Yes, the millennial segment is important, but one cannot ignore the existing customers from different generations at both ends of the spectrum,” says Nina Lekhi, founder and chief design curator, Baggit. Lekhi feels that no brand can grow and thrive by focusing on only one consumer segment. “While you must have an eye on the future, you also need to engage and be aware of the current audience preferences.” Lekhi thinks the micro-generation of Xennials are best positioned for brands to cash in on, since they are in their prime. Adds Murarka, “Any brand that needs to stay relevant would need to plan for Gen Z as this generation is just entering the workforce and would look to form the next wave of consumerism.”
Experts say brands should sharpen their messaging and create content that hits the right notes.
What will millennials spend their money on is the key question here, point out experts. Whether a consumer spends on a brand or not depends completely on the brand itself, says Lekhi.
“In the future, millennials who currently decide which brands to buy based on their own customised needs and the ethos of the brand will choose based on their crowd-sourced reviews. They connect with the conversation you create around your brand and the reality of the same. Your brand conversations have to be rooted in reality for the millennial generation to be a brand loyalist and the brand will have to work to retain that loyalty,’’ explains Lekhi.
Murarka feels brands need to deploy a two-pronged approach to target millennials. She says younger millennials need to be attracted to buy into the promise of the brand by adding value and connecting with them through emotional touch points. "While the older millennials, those entering their 30s, need to be approached with growing trust that can turn them into lifelong consumers, as it is this segment that has higher spending power.’’
Rashi Mittal Nair, co-founder and CEO, WOOP, a platform to grow trust via brand advocates, is of the opinion that if millennial spending is shrinking, then brands need to amplify their value proposition for consumers. This implies, choosing a target audience not based solely on their spending prowess, but on how relevant they are to the brand and how much value they can add.
“If consumers see value in what you are offering, they would be happy to spend. Instead of focussing on ‘’share of wallet’’ alone, brands should compete for ‘’share of time spent’’, or better still ‘’share of conversation’’. These will lead to a higher share of the market. And the best way to increase this is to drive more meaningful engagement with consumers which naturally leads to more authentic consumer advocacy of the value the brand offers, that’s worth spending on,” says Nair.
Lekhi feels brands need to delve deeper into subjects like sustainability, community building, gender equality, eco-consciousness and encourage your audience to be a part of a relevant conversation that you create around your brand.
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TARGET AUDIENCE
-$20 less per day was spent by millennials in 2016, compared with their 2008 counterparts, Gallup says
-50% of the working population in India are millennials and are the ones with disposable incomes that drive consumerism
-$74 people in the 18-to-29-year bracket spend per day, v/s $93 in 2008
Source: DNA Money
