|By Marketwired .||
|November 8, 2012 12:01 AM EST||
BOSTON, MA -- (Marketwire) -- 11/08/12 -- Restaurants, apparel retailers, and shopping malls should provide more tailored offerings to capture the hearts and wallets of the Millennial Generation, also known as Generation Y, according to new research by The Boston Consulting Group (BCG).
BCG's Center for Consumer and Customer Insight, in partnership with Service Management Group (SMG) and Barkley, surveyed 4,000 U.S. Millennials (defined as those 16 to 34 years old) and 1,000 non-Millennials (ages 35 to 74) to find out how their attitudes and spending habits differ. The results appear in a new article Millennial Passions: Food, Fashion, and Friends, which is available at bcgperspectives.com.
According to the survey, U.S. Millennials love to spend on away-from-home food and fashion. They dine and shop in groups; crave exciting, exotic dining experiences and experiential, lifestyle shopping environments; want to share their experiences with friends; and exert a strong influence over others -- family, friends, and even total strangers -- thanks to their intense use of social media.
Their attitudes, needs, and preferences are often quite different from those of non-Millennials as well as those of one another, so restaurants, apparel chains and malls need to develop more tailored offerings to attract them, the survey found. Below are more detailed findings.
Restaurants Are High on Millennials' Spending List
Restaurant meals and drinks are high on the list of what Millennials like to spend their money on -- ranking above consumer electronics, apparel, footwear, beauty and cosmetic products, and accessories.
They eat out more often than non-Millennials (3.4 versus 2.8 times per week), regardless of their income or household composition, and they prefer fast, fast-casual, takeout, Asian, exotic, and organic foods more than non-Millennials do. They're more likely to get food to go than to dine at the restaurant -- particularly at breakfast. Millennials spend slightly more than non-Millennials on average; indeed, a subgroup spends considerably more.
Millennials are much more likely to eat out with friends and coworkers (reported by 65 percent of Millennials compared with 43 percent of non-Millennials). They want to feel that they are "exploring something new" and that they can "easily catch up with friends."
Millennials visit mainstream casual restaurants but prefer fast-casual options such as Panera Bread, Chipotle Mexican Grill, and Pei Wei Asian Diner. "Regardless of price point, Millennials expect a great dining experience," said Chris Egan, the chief operating officer at SMG and a coauthor of the report. "Affordable fast-casual and fast food restaurants with locally sourced goods, exotic flavors, and service levels historically reserved for higher-quality restaurants will most likely garner a disproportionate share of Millennial dining spending."
Shopping for Clothing -- in Groups -- Is a Favorite Millennial Activity
Forty-seven percent of Millennial women reported shopping more than twice a month, compared with 36 percent of non-Millennial women. This difference in shopping frequency was even more striking among men (38 percent for Millennial men versus 10 percent for non-Millennial men). Millennial men spend twice as much on apparel per year as non-Millennial men; Millennial women outspend non-Millennial women by a third.
Fashion magazine articles and editorials, retailer websites, apparel brand websites and social media, fashion blogs, and store associates are top sources of trusted information on trends, products, and brands for Millennials.
As with dining-out preferences, Millennials tend to shop in groups and consider the opinions of others more than non-Millennials.
Millennials and non-Millennials prefer different apparel brands. Among the Millennial favorites: for women, Old Navy, Forever 21, Target private brands, Express, Aéropostale, Hollister, and H&M; for men, Nike and adidas. "Dual gender" favorites are Gap, American Eagle Outfitters, and Abercrombie & Fitch. Levi's, a non-Millennial favorite, is popular among Millennials, but less so.
Millennials prefer an experiential, lifestyle environment (such as that offered by Hollister or Abercrombie & Fitch), like to receive help and approval from fashion consultants rather than just basic sales assistance, and value store environmental factors more than their non-Millennial counterparts.
Retailers, Malls, and Restaurants Can Win Over Millennials
To win over Millennial consumers, the article says, retailers and shopping malls will need to consider several factors. They should emphasize group-shopping experiences, create in-store events and social forums, use mobile apps and social media, integrate their in-store and online offerings so that Millennials can compare prices on their smartphones or return their online purchases in stores, and in general make shopping fun, fast, and easy. Malls will want to ensure that they have the right mix of stores and restaurants to drive traffic.
For restaurants, the keys to success will include faster service (along with ready-to-eat and to-go options), fast-casual formats, and happy-hour, late-night, and bar experiences. Technology should again play a central role -- options such as online reservations and self-ordering systems will appeal to Millennials. And social media will matter to restaurants as well. Finally, menus themselves should include unusual, exotic, organic, or local ingredients, including "crowd sourced" options.
To stay relevant to Millennials over the next three to eight years and retain their popularity with the succeeding generation that will begin to emerge in stores and online in this time frame, stores and brands that target teens and young adults must reinvent themselves.
"For brands that appeal more to non-Millennials, as well as luxury and accessible-luxury brands and multibrand, multicategory formats like department stores, the challenge is fundamentally different: how to introduce their goods and brands to Millennials at the appropriate life stage and with authentic and relevant products," Christine Barton, a partner at BCG and lead author of the article, said. "And, importantly, when to do so, given that Millennials are not their core customers today, but will be in ten years."
To succeed, all companies must use language, marketing messages, causes, and spokespersons that relate to members of this generation.
Millennials' Impact Will Be Significant -- and Not Just on Their Peers
Millennials have a strong influence on each other -- they value experts but have redefined "expert" to mean someone with firsthand experience, often a friend or peer, not a critic or academic. "Millennials' impact will extend beyond generational lines," said Jeff Fromm, an executive vice president at Barkley and a coauthor of the report. Millennial brand preferences and buying patterns are early indicators of trends among non-Millennial consumers. Millennials live their lives on social media. Their attitudes spread quickly among their peers, then reach across generational lines. For example, non-Millennials report influencing the spending and product and brand preferences of spouses and kids; by comparison, Millennials perceive their influence to be over parents, siblings, grandparents, classmates, coworkers, roommates, and even complete strangers.
"Interestingly," Barton said, "Millennials report more likelihood to broadcast negative experiences or to look for 'knockout' criteria on a brand or product online compared, for example, with non-Millennial women, who report willingness to post positive as well as negative reviews and stories."
Research on Millennials can begin close to home. "Most retailers and restaurants already have access to a powerful tool: the Millennials on their own staff, who can be a valuable source of advocacy, insights and new ideas," Barton said. "Quick research close to home can be the key to winning over the Millennial generation."
To arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or firstname.lastname@example.org.
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients from the private, public, and not-for-profit sectors in all regions to identify their highest-value opportunities, address their most critical challenges, and transform their enterprises. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 77 offices in 42 countries. For more information, please visit bcg.com.
About BCG's Center for Consumer and Customer Insight
The Boston Consulting Group's Center for Consumer and Customer Insight applies a unique, integrated approach that combines quantitative and qualitative consumer research with a deep understanding of business strategy and competitive dynamics. The center works closely with BCG's various practices to translate its insights into actionable strategies that lead to tangible economic impact for our clients. In the course of its work, the center has amassed a rich set of proprietary data on consumers from around the world, in both emerging and developed markets. The Center for Consumer and Customer Insight is sponsored by BCG's Marketing and Sales and Consumer practices, with support from the Global Advantage practice in emerging markets. For more information, please visit BCG - Center for Consumer and Customer Insight.
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About Service Management Group
SMG helps its clients drive business results by improving customer loyalty and employee engagement. SMG has a rich history in innovation, providing proprietary data-collection, reporting, and insight tools for front-line and executive levels. Each year, SMG collects and evaluates over 70 million surveys in 65 countries and 29 languages for more than 225 brands. To request more information about SMG, email Joe Sciara at email@example.com or call 816-448-4500.
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