A demographic change is underway. As populations age, Millennials are nearing the critical juncture for displacing Baby Boomers… as the country’s most dominant generational cohort.
Are we paying enough attention to them? Numbering some 72 million, Millennials are the most numerous and best educated demographic group in U.S. history.
While Baby Boomers’ cultural clout and spending power has overshadowed the 65 million Gen Xers — those born between 1965 and 1980 — it wasn’t until the Millennials started to hit their 30s that major shifts in generational spending behaviors became apparent.
These older Millennials of child-bearing age recently have moved into the real estate market in a truly significant way. And their approach to home and building products purchasing makes them stand out from previous generations.
By the Numbers
According to a recent study from Green Builder Media’s Cognition Smart Data, three principal generations — Baby Boomers, Generation Xers, and Millennials — make up the buyers in today’s real estate market. However, in broad terms, each group is seeking very different opportunities.
- Millennials make up 51% of today’s home buyers. They are the most motivated of the three groups. And are looking for spaces that allow them to work comfortably from home, provide advanced “connected” living and smart technology, offer home gyms, and — for young families, in particular — have larger yards.
- Generation X represents 32% of today’s home buyers… just slightly more than half the size of the Millennial cohort. Gen Xers have spent their working life navigating the economic tumult of the last 30 years, and — as a result — are more cautious when it comes to home buying. However, and of particular note to building product brands, this group makes up 30% of the home improvement market. In fact, Gen Xers spend an average of $12,000 per household annually on remodeling projects. DIY? Not so much… they hire professionals 85% of the time.
- Baby Boomers comprise only 17% of today’s home buyers. In fact, today’s Baby Boomers are much more motivated to downsize. As such, they want homes where maintenance is minimized. And they are certainly seeking sanitary finishes and hands-free fixtures. Air and water filtration systems. Energy efficiency. As well as features and technologies that will allow them to “live in place” as they age. They’re much more interested in private outdoor decks and patios… than large yards that will require lots of upkeep.
Millennials are Discriminating
As with prior generations, Millennials have distinct values, habits (and, yes, fears) tied to their earning and spending habits. However, there are some key differences in those values when compared to other demographics. And, as a result… the Millennial generation will bring with it lasting changes in how building product brands will market to this increasingly influential group.
Millennials, typically, are risk-averse. And less likely to spend money unnecessarily or frivolously… than previous generations. However, when Millennials do decide to part with their money, key patterns are beginning to emerge.
Millennials, by and large, prefer to do business with brands that demonstrate a social conscience. Sustainable manufacturing methods. And ethical business standards.
According to the 2020 Deloitte Global Millennial Survey, 60% of Millennials state they’re willing to purchase from businesses that took care of their workforce and had a positive societal impact during the pandemic. Additionally, nearly half of Millennials (47%) educate themselves on the environmental implications of the brands they consume. 5WPR’s Consumer Culture Report found that 83% of Millennials, in fact, want the brands they purchase… to align with their beliefs and values.
As such, progressive building product brands must make a concerted effort to promote their Corporate Social Responsibility initiatives and eco-friendly practices.
Not tomorrow. This is a “today” opportunity:
- After all, Millennials make up the largest share of the U.S. population, 22%.
- The size of the Millennial generation is growing and expected to peak in 2036 at 81 million people.
- U.S. Millennial households are the most ethnically diverse and hold the most college degrees of any other generation.
The spending power of Millennials has proven to be a driving force in the economy, as they typically start families later than previous generations. And focus on experiences… versus goods. Paying off loans. And saving for retirement.
- On average, Millennials make between $64,000 to $75,000 annually.
- Millennials spend an average of $47,256 per person annually.
- Millennial purchasing power will increase further, as their income reaches an estimated $8.3 trillion by 2025.
- Millennial women are more likely than women in any other generation… to consider investing.
- Single female Millennials account for 19% of home purchases (and, by the way… purchase more expensive homes). While single Millennial men only represent 8% of home buyers.
Millennials Value Authenticity
Millennials get information about products differently than their predecessors do. They process that information in distinctive ways. And then make purchasing decisions accordingly.
- 58% of Millennials state that they learn about new brands through video-based social media at least once per month.
- 75% of millennials said a brand’s social media presence impacts their purchase decisions.
- Nearly half of Millennials (47%) educate themselves on the environmental implications of the brands they consume.
- Millennials in the U.S. are six times more likely than Baby Boomers to view newer brands as better. And more innovative.
It’s clear that capturing the attention of this demographic requires that building product brands adapt any obsolete, “old school” marketing approaches.
So, where should your brand prioritize its efforts?
Consider the following five factors that building product marketers must leverage when marketing to Millennials.
Millennials distrust traditional marketing. According to a study conducted by the McCarthy Group, 84% of Millennials stated that did not like traditional marketing. And, what’s more… they didn’t trust it. Rather, Millennials typically will purchase based upon their “feelings” about a company. Rather than on a hard sell promoting a product.
They crave authentic content. Millennials spend an average of 242 minutes online or using apps per day. And they seek out content-driven media. They scour the Internet and social sites. And often share what they find. Millennials report that they trust what they feel is “authentic”. In fact, 90% say authenticity is important to them when deciding which brands they support.
They welcome user-generated content. Millennials are more than three times more likely than Baby Boomers to turn to social media for opinions on which products to buy. And they trust recommendations from others — even strangers — more than what brands themselves say.
They respond to influencers. Millennials rely upon social media to discover how brands are promoting themselves. And, most important, who is promoting and recommending those brands. When Millennials realize people they like and who seem credible — in particular, online personalities — support a brand… they will be more likely to select that product too.
They’re tech-savvy. It’s no surprise that, according to Pew Research, nearly 100% of Millennials now say they use the Internet. And nine out of 10 Millennials have a smart phone. Such widespread device ownership and use correlates with a higher likelihood of consuming web content. Notably, 54% of Millennials check YouTube daily… and the social platform reaches more Millennials than all television networks combined.
Content marketing is crucial. Millennials gravitate toward businesses that are dedicated to improving their customers’ lives through informative content. Millennials want e-books, whitepapers, blog posts, videos, and other how-to information… that gives them the opportunity to take a deeper dive into a subject, or product.
One thing is certain, the Millennial Generation is already a force to reckon with. And, if we learned anything from the famous advice offered to Woodward and Bernstein in “All of the President’s Men”,… it is to follow the money. Yes, reaching this group as customers — and influencing their purchasing decisions — will only continue to become more important with time.
As you look at your prospects for growth in next year’s strategies and budgets, think about what your brand can do to pursue this next generation of customers. If they’re not buying in large numbers from you yet, why not? After all, they are open and willing. And smart building product brands will have a warm welcome ready.
Are you searching for ways to leverage your building product brand strategy for generational changes? And creating better, more targeted customer experiences… that will help your brand stand out from the competition? Send an email to Steve Kleber at email@example.com to learn more.