Davis Brand Brief: May 2014


As the class of 2014 celebrates its current milestone achievement and graduation speeches get quoted across the nation, it’s difficult not to think about how this generation of graduates will navigate adulthood and the changing marketplace. This month, the Davis Brand Brief takes a look at millennials – now the nation’s largest and arguably most game-changing generation – exploring how they interact with brands and how brands, in turn, work to engage them. Which brands are doing well and which are struggling? Want to weigh in on the conversation? Share your thoughts with us on Twitter. #millennials



Be Social

Generation Y. The “Me Me Me” Generation. Generation Why. Generation Wuss.

There are many names for millennial generation, which is 77 million-strong (slightly bigger than the Baby Boomer generation), complex, innovative, independent-minded and entrepreneurial. Embodiments of contradictions, millennials have high-end tastes and low-end budgets. They love to shop but are unlikely to make purchases and are unpredictably brand loyal. They care about making a social impact but aren’t as connected to social issues as older generations. Originators of the “selfie,” they care about self-expression but are not self-absorbed. They value health and wellness but many are under-employed and skeptical of the Affordable Care Act.

For brands trying to crack the millennial code, this “social generation” is an exciting-yet-perplexing audience that seems to always be one step ahead of the game.

From a strategic perspective, brands working to attract millennials must walk the fine between “getting it right” and “trying too hard.” While it fits that technology brands like Google, Amazon and Apple are cornering the market on “getting it right,” it’s interesting to watch the efforts of other older, more established brands operate in this new frontier while maintaining their authenticity.

Take Oreo for example. This year, the brand launched the Oreo Trending Vending Lounge at South By Southwest. Understanding that co-creation and customization are important to millennials, who appreciate the use of data to create hyper-personal experiences, festivalgoers were able to tweet their Oreo flavor desires (#tweetthetreat) and use a 3D printer to “bake” the treats in real time.

Coca-Cola’s Sprite Films cleverly leverages the millennial desire for independent creation. The project, which encourages student filmmakers to showcase their talent for a voting audience, both invigorates the Sprite brand among a coveted audience while at the same time recruiting brand management talent. The winner’s prize? An opportunity to work on an exclusive Sprite video project.

In an effort to reach millennial men (and the people who love them), MillerCoors recently launched a sponsored segment on HuffPost Live called HuffBros Live. Each live segment features everyday bros discussing “the issues that matter to millennial men.” Designed to dive deeper into topics that millennial men may not discuss with alone with their friends, HuffBros Live is meant to show their more sensitive side. While HuffBros Live’s success remains to be seen, we applaud the effort to bring more depth to the oft-stereotyped “bro,” leveraging the MillerCoors brand as one that brings people together for fun and conversation. Smartly, the brand also has created the opportunity to learn more about how this key audience thinks and feels. We hope to see MillerCoors take this opportunity to leverage these learnings to create ever-more clever campaigns.

While many brands are working on modifying their strategies to appeal to millennials, certain brands, and brand extensions, have been created and conceived specifically to appeal to millennials.

Pivot TV, an entertainment network aimed specifically at millennials, launched in August 2013 and already is exceeding projections. Now available in 44.5 million homes, part of the reason for Pivot’s success, according to Network President Evan Shapiro, is by not referring to millennials as such because “it sounds like marketing.”

Speaking of sounds, music is proving to be an especially important tool for resonance with millennials. While this may not appear on the surface to be unique to one generation over another (after all, who doesn’t respond to good music?), millennials in particular believe that the brands that understand the music they listen to and the artists they follow understand them. Electronic Dance Music (EDM), for example, is a genre millennials feel like they own. The same goes for the proliferation of music festivals across the country. Being in-tune with millennials, both literally and figuratively, means living in millennial territory and being able to keep step.

It may be argued that the efforts brands are making to reach this notoriously less-gullible, digital native generation are raising the standards for brands in general, along with the expectations of consumers. It will be fascinating to watch and track all the changes and innovations along the way. 



Show Value

Millennials are the country’s most powerful consumer group, currently controlling $600 billion in annual spending. By 2016, the millennial generation is projected to become the most economically impactful generation in U.S. history. It is predicted that they will purchase $60 billion in consumer packaged goods over the next decade, approximately $100 billion for teen fashion clothing and accessories (twice as much as previous generations). And, as a generation focused on health and fitness, millennials are being watched closely by Goldman Sachs for “the commercial impact of a generation that gets their wellness on the daily.”

Yet, in the face of all this future spending, brands are struggling to understand what makes millennials tick. There are a few consistent traits, however, that brands can focus on to attract millennials and claim their piece of this very valuable pie.

They search for value and durability. Millennials have been hit hard by the sagging economy and have an average starting income of $34,500. However, this group is not opposed to shopping, and has disposable income. It does mean, however, that they shop differently than previous generations and actively avoid blatant marketing tactics. They also are more likely to buy store brands and use smartphone coupons.

They search for healthy options. Recent research from Nielsen shows that the healthy aging marketplace is not only of interest to baby boomers and older consumers. Younger consumers are increasingly driving sales in health care categories, such as supplements, vitamins and preventive care. Even bulk goods retailers such as Costco, which are suffering because young urban millennials tend to avoid buying houses and cars, is offering giant bags of kale to try to woo millennial consumers away from the convenience and accessibility of Amazon Prime.

They search for social connection. Millennials founded social media. Digital natives, they are marked by the fact that computers and the Internet have always been a part of their lives; the youngest millennials have never known a life without social media. Millennials are more loyal to each other than they are to brands and, while they are deeper than their Facebook profiles, they look to technology to help guide and execute their purchasing decisions.

While it is evident that millennials are a complex and evolving audience, they also are the first generation that literally shares its likes and dislikes, its personal and professional behavior and its purchasing habits. This makes for a rich territory for brands in more ways than one. 



Stay Connected

In many ways, millennial habits and nuances are changing and setting cultural tones. In addition to being budget- and health-minded consumers, millennials demand that brands be consumer-focused while also making a difference in their communities.

Unlike older generations, millennials are willing to exchange personal data for tailored experiences. They enjoy co-created and user-generated content (UGC), spending on average five hours a day with UGC through social networks, peer reviews and conversations with friends. Not surprisingly, traditional media, TV and radio are the least-trusted sources. Millennials are just as likely to trust a peer review as a professional one.

Fortunately, it’s easier than ever for users to create content and share personal reviews through social media networks, blogs and review sites like Yelp. The data show that brands must be willing to understand and live in this environment in order to get noticed, and they must be willing to make changes based on consumer opinion. It sounds cliché, but brands must consider millennials to be not just consumers of products and ideas but partners in creating and improving them.

It’s not surprising then, given the millennial desire for tailored, responsive experiences that traditional shopping experiences, including malls, are faltering at the hands of millennials. To millennials, browsing, not buying, is the experience they seek. The more interesting the browsing experience, both on- and off-line, the more likely they are to re-visit and purchase.

It’s also not surprising that expected, traditional experiences are pooh-poohed. Everyday casual dining? Not interested. (Sorry, Red Lobster). Cars? Preferably if they’re seamlessly connected. Soda? Preferably if it’s sustainable.

Here’s something that millennials do love (right now, anyway): gardening. The Home Depot Garden Party shows how the brand has been paying attention to this trend, tapping into the millennials desire to get hands-on experience and learn along the way.  



Speak Carefully

Given the complex and fast-moving marketplace, how are brands using creative expression to appeal to millennials? In a word: carefully. And while some are succeeding, others are clearly struggling.

Let’s start with those succeeding. In the media world, Kinfolk, a reigning example in the world of independent publishing, recently launched Ouur, a beautiful brand collection that also includes a magazine aimed at the millennial preference for small-batch publications. Currently available in Japan, Ouur soon will be launched in America, adding to Kinfolk’s highly respected group of publications. On the consumer product side, Fisher-Price smartly targets millennial moms and recently launched an all-digital campaign that relies on humor to position its products “not just as solutions for kids but as solutions for parents.”

The hotel industry is actively working to appeal to millennial travelers. Marriott’s Travel Brilliantly campaign is aimed toward frequent travelers and focuses on innovation, technology and inviting customer feedback. Choice Hotels’ Cambria Suites also is undergoing a rebrand focusing on technology and accessibility.

Now to the less on-point efforts. In the world of mainstream coffee, Maxwell House is working on attracting millennials through a packaging redesign and new ad campaign. Using words and phrases like “awesome,” “amazing,” and “that’s epic, bro,” the 121-year-old brand shows a middle-aged gentleman showing what can be accomplished while fueled by a cup of coffee. While this is an interesting attempt on the part of the Maxwell House brand, we can’t help but think that it tries too hard. Along the same lines, Wendy’s CEO Emil Brolick says the chain is evolving its menu and marketing to ensure it appeals across generations. “Red,” the raven-haired Wendy’s spokeswoman is a millennial who jokes with her “taste buds” and posts photos on social media. Knowing that millennials are more concerned about their health than previous generations, fast food has a tough row to hoe to gain trust and credibility.

It will be interesting to see how these and other brands evolve over time to meet the needs of the millennial audience.

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