As one of the largest generations, millennials are a constant topic of discussion. Businesses of all sizes are trying to figure out the best way to appeal to this large and diverse demographic of the population. Plenty of articles have discussed topics of what makes up the millennial generation, but millennials have changed as time has passed (as any generation does as they age). Who are the millennials in 2019? Have their wants and needs changed as they have become a larger section of the work force? How has that affected their buying potential?
Who Are The Millennials Today?
If the term millennial brings to mind young teens or college kids, then you better think again. The 2015 U.S. Census data they found there were 75.4 million millennials, based on Pew’s definition of the generation, which ranges from those born between 1981 and 1997. That means the youngest millennial is 22 years old, while the oldest is 38. With that age range comes a diverse set of needs and interests. When speaking to millennials, you aren’t just speaking to the young adult who’s starting a career, you are also speaking to the young couple starting their family and the person who is almost 20 years into their career.
They are also the most educated generation to date. In 2016 pew research found that 46 percent of employed millennial women ages 25 to 29 had a bachelor’s degree or more. For millennial men, it was 36 percent in 2016. Unfortunately, this education increase doesn’t mean higher salaries, since many millennials entered the work force during the great recession. According to U.S. Census Bureau, the median earnings for full-time workers ages 18 to 34 was $35,845 in 1980. In 2000, 18 to 34 years olds were earning $37,355. But during 2009 to 2013, full-time workers between 18 and 34 had median earnings of just $33,883.
Those lower wages are accompanied with student loan debt as well. As of June 2018, the national student loan debt total reached $1.5 trillion. Individuals who graduated in the year 2016 average about $37,000 in student debt. This, combined with the drop in salary, puts many millennials in a tough financial spot, which is reflected in many of their purchasing decisions.
Another trend with millennials in the workforce is their interests in entrepreneurship. A study conducted by America’s Small Business Development Center in 2016 found that 30 percent of millennials have already started some sort of business, and 49 percent of millennials dream of starting their own business sometime in the next three years. Many millennials have grown disillusioned with the type of benefits offered at different companies along with low pay. That, paired with the ease of access that current technology provides, makes the idea of starting one’s own business very appealing.
Beyond financials, millennials are the most racially diverse generation. The 2015 Census reports that nationwide millennials are 55.8 percent white and nearly 30 percent “new minorities”, meaning Hispanics, Asians, and those identifying as two or more races. In states such as California and Texas, the diversity is even greater, with Caucasians only making up only one-third of the millennial population.
Overall, while many try to paint over this large group of people with broad sweeping statements, it is always good to keep in mind how diverse they are—whether that pertains to their stage of life, their cultural and racial backgrounds, or their employment situation. Their spending habits are one of the few similarities.
How They Spend
Many have noticed that the spending habits of the millennials are not aligning with those of previous generations. Several different articles are making the rounds pointing out how millennials are choosing to forgo products such as napkins, diamonds, dryer sheets, and chain restaurants. These markets and others have had declines in sales. Many claimed this was because the millennials simply aren’t buying their products nearly as much as their predecessors once did.
At first, many assume a shift in culture. Multiple articles have claimed that the millennials were prioritizing their purchases differently, choosing local establishments over national chains or using other rare gems rather than diamonds due to ethical reasons. While there does seem to be some smaller trends in conscious consumerism among the younger generations, the main reason for their spending habits is simply money.
A recent study conducted in November of 2018 by the Federal Reserve Board found that the spending habits of millennials actually was not that far off from that of the previous Generation X and the boomers before them. What is different is the number of finical factors that are simultaneously affecting the younger generation. As stated earlier, millennials came of age during the economic recession of 2007 to 2009. They entered the work force with fewer jobs available and less creditors willing to give out loans. Those factors, combined with the rise of both education cost and healthcare cost, which has grown past inflation, only adds to a tighter budget. It isn’t that they aren’t buying the things their parents did out of choice; it is that they simply cannot afford to do so. Now what is up for debate is whether these conditions will affect their spending habits in the long run as their wages and the economy improves.
What they are spending their limited funds on is just as diverse as their demographics. As mentioned earlier, some trends are supporting more local business instead of larger conglomerates; this can be seen in the rise of certain things like craft beer and other artisanal items. In addition, millennials are eating and drinking at home more often than previous generations. They’ve also seemed to have greatly boosted the wine industry with their interest.
Moreover, the do-it-yourself movement has increased with the ability to simply Google any tutorial and watch a YouTube video with a thorough step-by-step process. An increase in the awareness of environmentalism and health concerns has them questioning many of the ingredients and packaging of the products they do purchase. For example, cleaning supplies, laundry detergent, and hygiene products have seen a rise in using ingredients that are simple and non-toxic as many millennials move to reduce the waste they produce, whether it is the amount of plastic they are throwing out to what they are washing down their drains.
Increasing housing costs across the country and their finical position has also pushed many to reconsider the number of things they own. Many are living smaller both out of desire and necessity. The Tiny House Movement, the push to build or purchase houses less than 400 square feet, has gained momentum in the last five years. Many choose to go this route to help eliminate debt, while others use it as a way to focus more on acquiring experiences as apposed to focusing on the acquisition of things. Millennials are much less likely to hold on to items handed down to them from previous generations. This is due to the lack of space they have in their own homes as well as the prevalence of websites and apps such as Facebook Market Place, craigslist, and Offerup that make selling their used items very simple.
As mentioned before, being an entrepreneur is a growing trend among millennials as well. With many new vocations appearing with the expansion of social media, such as YouTubers, bloggers, video game streamers, and freelancers, many are looking to turn their favorite hobby into something more lucrative. The trend is only increasing as more companies are outsourcing to freelancers and independent contractors. With fewer benefits offered at companies across the country, the appeal of being their own boss is pushing many to have a side gig. The internet makes this an easy reality with plenty of sights like Linda.com or Skillshare, offering courses in every topic imaginable from industry experts.
Across these trends there is a variety of interests within the millennial generation, but the common thread through it all is the push to gain better finical security.
Millennials And Self-Storage
The Self Storage Association’s 2017 Self-Storage Demand Study narrows in on how the millennials are utilizing the self-storage industry. As seen in Table 1, 28 percent of the millennial population is using self-storage. It’s no surprise that the millennials also have the largest percentages out of every generation of student and military self-storage renters as well. Millennials as a whole seem to be using self-storage for short periods of time and have stated they will continue to do so. The question then becomes will that continue as they age, or will they follow the same trajectory as the generations before and slowly start renting for longer periods of time?
This depends on how millennials spending habits will evolve. As stated above, it could be their shift toward being thrifty based on their lack of finical holdings may turn into a life-long point of view. So even as they do gain more finical stability, they could continue to cut costs wherever they find excess.
The Self-Storage Demand Study also backs that the millennials are the most educated and the most racially diverse generation to date. What’s more, millennials aren’t getting married nearly as often as previous generations. Many have attributed this trend to their lack of financial stability. The prospect of settling down can seem daunting when you are worried about just supporting yourself. The study found that the majority of millennial renters continue to be in the lower income brackets. As seen in Table 2, whereas 16.9 percent of all self-storage renters have an income of $125,000.00 or more, only 8.4 percent of millennials fall into that income bracket.
Millennials are still more likely to live in an apartment or condo than any other generation at 38 percent, but the majority (61 percent) live in a single-family home. This is again a reflection on their lack of ability to qualify for a home loan with the student debt affecting their debt to assets ratio. Millennials are also more likely to live in urban areas than the older generations, but this smaller space doesn’t necessarily translate to storing more in larger units. Millennials are more likely to rent smaller units, which, given the prevalence of different online platforms to sell unwanted items, there is little reason to store something when you could turn a profit. The number one reason for them to use self-storage is temporary storage while they change residences at 44percent; the second being not having enough space in their current residence at 36 percent.
The most intriguing findings involve the features the millennials consider important when renting self-storage and which of those features they would pay more. The most popular features were 24-hour access, electronic gates, pest control, and facility website with features such as online payments, reservations, etc. Millennials visit their units more regularly than the previous generations too.
Yet, every single feature was rated as important by at least one-fourth of millennials. This may be because of the easy access via the internet that millennials have to pursue multiple facilities in their area and see all the features offered.
The data also shows that millennials aren’t too keen on paying much more for these extra features, which makes sense given their financial situations. Millennials are the most likely to research a facility first online before stopping in, but simple facts about your product or service on your webpage won’t be enough to capture their attention.
How To Connect With Them
Millennials love technology because it allows for more interaction and connection. Social media has grown to be the main center of information for this generation because of the way the information is delivered. Across all platforms, whether it is blog post on a website, YouTube, Instagram, Facebook, Snapchat, or even something as simple as a review on Yelp, millennials are looking for one thing: authenticity.
The original draw of all these online platforms was that they were providing a more down-to-earth version of entertainment content. Production value could vary between lower quality to studio-quality photos and videos. What mattered was the personality behind them and whether there was a genuine expression from the creator. The content that performs the best is educational, entertaining, a combination of the two, and seeks to interact with its viewer.
The popularity of how to style content and behind the scenes of life in the form of vlogs (video blog) shows the millennial audience craving a more stripped back style of entertainment with which they can connect. The ease of access to create your own content is also an appealing factor. People on these platforms don’t need a huge production budget with fantastic editing skills to get their content seen. This reality makes the divide between the creator and the viewer smaller than that of Hollywood celebrities in movies, commercials, and TV shows. The ease of access to communicate with the content creator allows them to be way more relatable. Content creators who commit to authenticity find their audiences reaching out and interacting with their creations and brands on a much deeper level.
Social media is media that isn’t a one-way street. All the platforms allow the audience to directly interact with the creator. The social aspect of this technology creates a community-like environment where things are questioned and discussed continuously, allowing the viewer to feel more involved with the creation. This also allows for the creator to constantly adapt to what their audience wants.
Commercials and ads that play before videos or appear next to the content of a popular blog post are more likely to be seen more by the millennial population, but nothing will compare to making your own content for your perspective clients. With the ability to just turn to our phones or click away the second something appears on our screen that bores us, there is no better place to be than in the actual content itself. Creating your own is the easiest method; with the low barrier of entry with social media, any one can create videos, pictures, or write articles about an educational or entertaining aspect of their business. But building a following and getting your video seen can be a little more difficult today as more places like Facebook deploy algorithms that push you to pay to even get your content in front of all of those who have already opted into seeing your posts.
Influencer marketing is another way to get in front of those eyes without having to build a huge platform yourself. Sponsoring a video of a YouTuber or having another profile shout you out on Instagram as they are using your service or product will get you in front of many more people. Finding a YouTuber will a smaller audience under 100,000 people in your local area is especially beneficial as such influencers won’t be charging very much for a sponsorship; some may even give your business a shout out for free or in exchange for a free product. Using influencers as your marketing will not replace having your own presence within these platforms. As stated by the 2017 SSA Demand Study, millennials are the top generation to research a facility online first before calling or making an in-person visit.
Overall, as diverse as they are, the millennials have two common factors regarding their purchasing decisions: convenience and cost. Convey those two things in an authentic way across the different social media platforms and you will tap into the millennial market.
Samantha Traina is the publishing coordinator at MiniCo.