Millennials, the 'Highest ROI Demographic'
Reasons to target the younger generation, and tips to help you get it done
CHICAGO -- Millennials love social media. Why? Because they "want to tell a story," said Darren Tristano of Technomic. "They may or may not be heard, but they can get their story out there."
Well, this up-and-coming generation--currently ages 21 to 35 and with $1.7 trillion in spending power--got plenty of attention during the opening day of CSP's Cold Vault Summit in Chicago.
"Millennials are the highest ROI demographic that you can target," Nik Modi, beverage analyst for RBC Capital Markets, told the group of about 65 convenience store retailers and suppliers.
Among the reasons Modi enumerated:
- Millennials love technology.
- They love social networking.
- They're very distrusting.
"They have a very low level of trust for institution," Modi said. As a result, if you, as a retailer, get on their bad side, they'll quickly share that message with their friends--in person and online--and those friends will consider the experience their own, avoiding that retailer. On the other hand, the millennial who finds a c-store or other business that is in stock of products they like, is clean and friendly, and leaves a good impression will share that message, too. When friends or online followers read that message, they'll have reason to seek out your store.
"It's when those recommendations start coming on social media that sales begin to improve," said Modi.
So how best to reach Millennial consumers?
They like variety in their product assortment. They seek out value. They're open to exotic and stronger flavors. But Modi says that doesn't mean a retailer has to stock every SKU offered by a manufacturer.
"[Millennials are] not as fickle as we think," he said. "You can still reduce the SKU capacity, but you need to supply newness" or a continual offer of new flavors.
Tristano, executive vice president of the Chicago-based Technomic consulting and data group, said these characteristics fit perfectly into the growing trend of craft beer.
"There's a distinct shift away from domestic beers with this generation," he said. "They're exploring craft beers and ciders and import beers" at a much younger age than previous generations did. "They're more willing to experiment; they like bolder flavors."
But the trick may be to treat them as something separate from the customer population at large. "If you can build the frequency--it's not loyalty but the visit frequency or the habit--with this generation, you can grow with them," Tristano said.
CSP's Cold Vault Summit continues in Chicago through Wednesday.