story by Kim Souza
ksouza@thecitywire.com
Editor’s note: The Supply Side section of The City Wire focuses on the companies, organizations, issues and individuals engaged in providing products and services to retailers. The Supply Side is managed by The City Wire and sponsored by Propak Logistics.
While many have an opinion on the Millennial generation, there remains much mystery behind the mega demographic that wields more than $1.3 trillion in annual spending power and is eclipsing Baby Boomers in numbers and purchase potential.
Milliennials (those born between 1980 to 1995) now comprise 27% of the population with some 80 million adult consumers in the U.S. The Baby Boomer generation cohort is 76 million, according to U.S. Census Bureau.
Stacy Tholking, director of shopper insights for Proctor & Gamble, said the “sorry, not sorry generation” are interesting but there are also many misconceptions about this dynamic demographic. Tholking was part of a recent panel discussion on Millennials at the Excellence in Retail Conference held at the University of Arkansas.
“The common myth that Millennials are poor and living in their parent’s basements is just not true. Many are earning on average $60,000 a year and they have heavily invested in their education, more so than prior generations. Because they spent a long time in school they were not out there setting up their own households. Maybe that’s were the basement living myth got started,” Tholking said.
She said they have grown up in a different world, one of open access 24/7. They also understand they may not be safe in the movie theater or on their college campus. This view of the world has shaped the way they think, which is different from prior generations.
“They do believe there is a lot they can do in this world and they take that responsibility seriously. They have a fearless mentality and are not afraid to fail which is why many have chosen to start their own companies,” Tholking said. “The myth that Millennials are lazy is also false. They are not motivated by money per se, like their parents and grandparents.”
INSIGHTS SOUGHT
Matt Kistler, senior vice president of consumer insights at Wal-Mart, said Wal-Mart is actively engaging Millennials, but too often its supplier partners are not focusing on this important, yet different demographic. He said everyone is collecting data on the group, but data are not insights.
He said knowing what they buy or how they shop is simply not enough and does not get to the real insights needed by Wal-Mart. He said Wal-Mart is trying to figure out where the Millennial is heading so they can be there in the future, admitting that it’s a work in progress and one that suppliers may benefit being a part of as well.
“We need to collaborate more with our suppliers on this. We know Millennials want ‘now, new and always.’ Wal-Mart will also be Wal-Mart and that resonates as the now, but we need help with the new. That’s where our suppliers can join us and that’s the exciting part. This customer is moving faster. They are leading us more than we are leading them,” Kistler said.
One group retailers are wooing are the Millennial moms. They comprise 97% of all new moms today. Kistler said the baby is a big deal and Wal-Mart is constantly looking for ways to help with convenience and value, from direct-ship diapers to drive-up grocery.
Kistler said Wal-Mart doesn’t need more data from its suppliers. The missing link is data analysis that provides real insight into how retail can best serve the Millennial generation today and 20 years for now.
CONVERSATIONAL COHORT
Thokling said being out front with innovation is important to Millennials because they “hit the future first.” She said this group are active communicators and companies must work to engage a conversation that should be a two-way process though social media.
She also said immediate access is important to this cohort because they often live in the moment and record nearly every moment. Thokling said Millennials are more focused on savings than the previous generation. She said they actively save for retirement and shop for the best deal. It’s part of their DNA, she said. The group also looks for transparency and virtue in the companies it supports. Tholking said this likely comes from the group coming of age in an era of government and corporate mistrust.
Tholking sees opportunities for supplier companies to work with Wal-Mart to better reach and understand the Millennial generation.
“We should be leaning in where the Millennials are leading in growth. Wal-Mart is doing that with its smaller format and e-commerce investments. These are places where Millennials are over represented amongst the shopper base. Suppliers have an opportunity to jump in here and I think if we all play together, we will win,” Tholking said.
INNOVATION PUSH
She said investments geared toward the Millennial generation will likely cascade out to the older generations because they follow Millennials in terms of technology adoption.
“The Millennials are pushing the innovation, but other groups also use and want it. The Millennials are just the first in line,” Tholking said.
Kistler said Wal-Mart is trying to give Millennials what they want. For the holidays he said Wal-Mart expanded its app capabilities to give users access to research, reviews and product specs as well as provide shoppers with good lists and a geo map function that helps them locate items within a physical store by aisle number and shelf location. He said these are geared to helping Millennials save time and make informed purchases.