Millennials are no longer just the kids who grew up with technology. They are becoming adults, and now make up a quarter of the consumer population of the U.S.
We are in the midst of a generational hand-off – the baby boomers have just about lost their grip on the majority hold of the market and are no longer the main demographic for new companies to target. This is causing a complete shift in strategy for players in the fintech and startup sector who want to make sure they can capture this blossoming market and find exciting new business opportunities that have never existed until now.
Who Are Millenials, Anyway?
Every generation has its own unique characteristics, but millennials have been more polarizing than any other. Millennials are the generation that was born between 1981 and 1997 and were the first to grow up right alongside the technological revolution and enter the workforce during a great recession. As a result, millennials are more tech-savvy and have unique views compared to baby boomers. They are also the single most educated generation, with about 40% having earned at least a bachelor’s degree.
As millennials begin to settle in after college and get higher-paying jobs, their spending power is dramatically increasing. Their spending power is projected to reach $1.4 trillion, making them the highest spending demographic in the country in many of the fastest-growing industries including entertainment, fintech, and eCommerce.
If small businesses want to capture this budding new market, they will need to understand their spending habits and what makes them tick as consumers.
Being more tech-savvy and independent, millennials present a unique opportunity for small businesses who want to win their business. Some of the key trends they are displaying include:
- 94% of Millennials Prefer Using Digital Services and Coupons
If you want to capture the attention of the millennial market, digital offerings are a must. This is why companies like PayPal and Robinhood have done so well. Robinhood’s simple access to stocks played on millennials’ digital obsessions, their distrust of banks (link to article), as well as their craving to become financially independent and pay off student loan debt. These factors combined with the simple and intuitive user experience have allowed Robinhood to gain the undying trust and support of millennials.
- Millennials Love Subscription Services
Millennial spending habits have driven the subscription services industry to grow over 100% year over year for 5 years straight. Companies have discovered that offering an easy-access service for a flat rate every month is simple yet provides enough utility to justify a monthly payment. A great example is the shift in popularity towards video and movie streaming services we have seen recently. The ease of access and simplicity of these new platforms have caused nearly every big entertainment player to attempt to cash in on this trend including, Disney, Apple, and Amazon.
- Millennials Trust Influencers
The rise of influencer marketing is a trend that millennials are solely responsible for. What started off as a misunderstood fad has evolved into what is now the most effective form of marketing for small businesses. This new form of marketing may have its skeptics, but the data shows that over 80% of millennials get their buying decisions from trusted friends, influencers, and family rather than from traditional commercials.
Capturing the Millenial Market
Millennials have been slowly transforming small businesses and entrepreneurship as we know it. Giant companies have shifted their entire business plans to attempt to capture the elusive millennials, and new startups are taking unique and forward-thinking approaches to problems the world has never experienced before due to the technological revolution. If you want to shift your business to better capture the important millennial demographic, you will need to use technology to your advantage while striving to provide real utility that augments their daily life.