Millennials are now the largest age group but retailers and advertisers in general haven’t quite figured out how to reach them.
Millennials are not as interested in drills, machine shop workbenches, gardening, and any number of do-it-yourself items as their boomer parents.
Why should they be? Home ownership is far lower and their boomer parents did not have mountains of student debt. So what’s an advertiser to do?
The Wall Street Journal reports America’s Retailers Have a New Target Customer: The 26-Year-Old Millennial.
The Scotts Miracle-Gro Co. has started offering gardening lessons for young homeowners that cover basic tips—really, really basic—like making sure sunlight can reach plants.
“These are simple things we wouldn’t have really thought to do or needed to do 15 to 20 years ago,” says Jim King, senior vice president of corporate affairs for Scotts. “But this is a group who may not have grown up putting their hands in the dirt growing their vegetable garden in mom and dad’s backyard.”
The biggest single age cohort today in the U.S. is 26-year-olds, who number 4.8 million, according to Torsten Slok, chief international economist for Deutsche Bank . People 25, 27 and 24 follow close behind, in that order. Many are on the verge of life-defining moments such as choosing a career, buying a house and having children.
Companies looking to grab a piece of that business, however, have run into a problem. This generation, with its over-scheduled childhoods, tech-dependent lifestyles and delayed adulthood, is radically different from previous ones. They’re so different, in fact, that companies are developing new products, overhauling marketing and launching educational programs—all with the goal of luring the archetypal 26-year-old.
“They’re much more of a ‘Do-It-for-Me’ type of customer than a ‘Do-It-Yourself’ customer,” says Joe McFarland, executive vice president of J.C. Penney stores. “You don’t need a ladder or a power drill, you don’t even have to wonder if you measured your window right.”
In June the company [Home Depot] introduced a series of online workshops, including videos on how to use a tape measure and how to hide cords, that were so basic some executives worried they were condescending. “You have to start somewhere,” said Ted Decker, Home Depot executive vice president of merchandising.
Ready to Spend?
I question the general thesis that millennials have money to spend.
In fact, millennials have delayed marriage, home buying, and household formation precisely because they do not have money to spend.
Far too many millennials are mired in student debt and living with their parents out of necessity. Others feel an obligation to take care of aging parents.
Factor in dramatically different lifestyle preferences with greater importance on mobility rather than ownership, and it should be clear the setup is extremely deflationary, especially with anemic wage growth that does not keep up with inflation.
Mike “Mish” Shedlock