Why Millennials Matter

The Millennial vote will be pivotal to winning the election in 2012, just as they were in 2008.  In 2008, Millennials made up 17% of the electorate. Collectively, they accounted for a significant part of Barack Obama’s national popular vote.

In 2012, even more Millennials will be of legal voting age. Millennials are projected to make up nearly one fourth of the electorate next November. Many of these young voters will be casting ballots for the first time, and are likely to be more ‘independent’ than partisan.  Nevertheless, Pew figures from November 2011 show Obama with a 26 point lead over Mitch Romney among 18-29 year olds in a hypothetical match-up.  A lot will depend on how many Millennials actually show up to vote as well as what both candidates do to capture their attention in the next 12 months.

Millennial Mood Shift

In the recession-dominated four years since the last Presidential election, Gen Y has gone from being optimistic and ‘hopeful’ to discouraged and angry.  The shift seemed to have happened quite suddenly, triggered by the realization that trillions of stimulus dollars, gigantic industry takeovers and costly bank bailouts were insufficient to create  jobs and give young adults a toehold in the economy.

Why ‘sudden’? Even as little as a year ago, I would never have predicted anything like the Occupy Wall Street movement. In fact, when Jon Stewart and Stephen Colbert launched their “Rally to Restore Sanity/Fear” in Washington DC last October, I wondered whether it would resonate with a generation notable for its lack of protest and desire to work within the system to create change:

“… the truth is, this generation does care. They are caring by not participating, by disassociating. Stewart also understands this; he gets their approach. They are conservative liberals. They want to change the system without marching down Main Street. Without lowering themselves to the same tactics, name calling and bickering they detest. It’s hard to have a voice when you are disgusted by the tone of the conversation. So instead of joining, they are quiet rebels who challenge the status quo by the way they live, not how they protest. …. The “Rally to Restore Sanity” was a TV staged event they attended, not a grass roots rally they created. Just like Demand TV or ITunes, it was offered up and they clicked “attend.”

When you’re hurting, inequity is an easy concept to grasp — just ask any four year old.  In 2011, evidence of unfairness was easy to find.  The concept that lit the spark was growing lopsidedness in wealth distribution. The target of resentment was easy to find, as well – Wall Street. The way money is made by corporate fat cats and Wall Street bankers became the focus of Millennial discontent, not those who set the rules in Washington. This is good for Obama, and bad for Republicans who are more associated with the 1% than the 99%.

What It Will Take to Win With Millennials

Winning with Millennials will require either championing the idea of inequality, or refocusing the dialog. Obama seems to understand this with his recent populist stance and anti-business actions, like the decision to block the Keystone Pipeline and the AT&T/T-Mobile merger.  The Wall Street Journal writes, “The deal landed just as the Obama administration was rolling into its rel-election campaign, which, amid a depresssed economy, will be about vilifying big business and playing to economic pessimism.” (“How AT&T Miscalculated”, WSJ, 12.21.2011)

Yet there is evidence that refocusing the dialog may be a better way to win the hearts of Millennials. Most people accept that wealth is inequally distributed and say that even in an ideal world, the top 20% should in fact control about a third of the wealth.  Millennials especially have been raised to believe that hard work and talent are what matters to success. What they struggle with is inequal distribution of opportunity.  In other words, it’s okay if someone has more than I do, as long as I have a shot at being part of the 20% myself.

Shifting the conversation to distribution of opportunity rather than wealth would resonate with Millennials, who contrary to myth, are not looking for a handout. Democratic pollster, Douglas Schoen, reported in October that the more radical ideas of those Occupying Wall Street are in fact out of step with the mainstream of Millennial thinking, which is more focused on a level playing field than redistributing wealth: “People are frustrated by an economy that does not reward hard work and responsibility.” (“Polling the Occupy Wall Street Crowd,” WSJ, 10.18.11)

Paul Conway, leader of the non-profit organization, Generation Opportunity, agrees with this assessment. He says the Occupy Wall Street protesters are out of step with most young voters:

“Despite this loud minority, though, most young voters believe lowering business taxes creates jobs, and that businesses are able to grow with less government interference…President Obama’s 2008 electoral victory was attributed in part to his support from first-time voters. But his public expressions of sympathy with the Occupy Wall Street movement, and his disdain for public spending cuts, could alienate a large number of young voters this time around.” 

Listening to young voters and getting the real message of Occupy Wall Street right could make the difference between winning and losing in 2012.

Michelle Nunn, CEO of the Points of Light Institute, concurs that the Occupy Wall Street group does not represent mainline Millennials who continue to be more interested in changing business from the inside out than via protest.

“The Occupy Wall Street movement is largely fueled by a relatively small set of young people who view the protests as a fight for their future. The vast majority, however, are getting up and going to work every day — or wishing they could. These individuals are part of a less dramatic but, perhaps, equally powerful movement of Millennials shaping the future of business.”  (“Millennials to Business: Social Responsibility Isn’t Optional, Wash Post, 12.20.11)

 

Creating a Meaningful Presidential Brand

We should be thankful to the Occupy Wall Street movement for making us recognize Millennials as a political force, even if they do not represent the majority of Millennials. If I were advising the President or one of the Republican Presidential campaigns, I would tell them to get busy. They need to engage with motivated young adults, who’s only request is that they get a fair shake and know a fair shake won’t come from Wall Street but from the politicians that set the rules — for how jobs are created and wealth is made, not how wealth is redistributed.  With Millennials becoming the most influential generation to vote in 2012 and beyond, I am hoping that this dialog starts soon.

Here are four ways Millennials are shaking up retail.

1. If You’re Not a Millennial, Chances Are You Overpaid

According to a new study released from Deloitte, nine in 10 shoppers know what they’re buying before they arrive at a store. Bloomberg calls this trend the ‘Rise of the Surgical Shopper’. Techcrunch heralds the “Death of the Impulse Shopper”. Whichever way you look at it, web-savvy Millennials ALWAYS do their homework before selecting a store. They know what they want and are more likely to treat every trip as a ‘mission’ trip.

The impact: Shoppers are visiting fewer stores, but spending more per store. “Typically traffic and sales growth rise or fall in tandem. Last year [they] spotted something new. Even as retail sales grew 3.5 percent, according to the NRF [National Retail Federation], traffic declined 0.5 percent.” This makes every customer more important, and requires a greater emphasis on ‘converting’ every shopper to a buyer. As a result, retailers can no longer rely on impulse buying to pay back the cost of loss leader promotions, and rewards for store loyalty. Instead, they are having to learn a whole new set of tricks to attract value conscious, socially motivated shoppers.

2. Gaming the System

Location-based services like Foursquare and Facebook Places have turned shopping into a game and taken loyalty programs to a whole new level.  “Millennials are even more willing to participate in loyalty and reward programs than their parents, but they expect reward programs to be free, easy and fast.”  According to a new survey, 77% of U.S. Millennials participate in loyalty programs, and 78% say they are more likely to choose a brand that offers a loyalty or reward program over a brand that doesn’t offer one.  Like older consumers, they prefer universal rewards that can be redeemed with a common currency.

The impact: Retailers can no longer rely on store-specific rewards programs. They need to tie into the larger eco-system, in creative ways. It will also be essential to respect shoppers’ privacy while providing them with offers that make shopping more fun and engaging. Finally, redemption must be seamless.  A recent collaboration between retailers, H&M and Sports Authority, and American Express enables shoppers to get cash back discounts on their AMEX cards  when they check into a venue using Foursquare and spend money using their American Express cards. H&M will give you $10 back on a $75 purchase, while Sports Authority will reimburse you $20 for spending $50.

3. Why Stress? Shop Online.

Multi-channel shopping is a reality for most Millennials who are just as comfortable ordering online as in the store. Last week, Millennial student, Tara Hunt, wrote a survival guide for Millennials for Black Friday which advised her peers to skip the event altogether and shop online. Here’s her description of the check out line:

If you survive the parking lot, the tsunami of people and the flames and demons from the toy aisle, you will find yourself standing for eternity at the check-out counter. There, you will find an exhausted and irritable employee wearing something nauseatingly festive like a reindeer antler headband or elves’ ears. They will greet you with a forced grimace and bid you adieu with a nonsectarian, monotone “Happy Holidays,” and in between make certain that you know that working there is the best form of punishment man could devise. Smile and leave quickly.

Millennial fashionistas know the best goods and prices can be found through online shopping clubs like Gilt.com, Shopitome.com and Designer Social or OneKingsLane.com. An apparel retailer we work with reports that half of their sales are online. Today is Cyber Monday and I suspect that much of the activity will have been Millennial-fueled.

Impact: Retailers will need to find ways to make shopping online as easy and fun as shopping in stores. Amazon, Zappos and Target are leading the way, keeping it simple with no shipping costs, easy returns and peer reviewed merchandise. I especially like how Target displays navigation for clearance, coupons and the weekly ad prominently on the home page, acknowledging the importance of bargains. Similarly, OneKingsLane.com offers ONLY sales and they last just a few hours or days. Neither site feels like ‘discount’ merchandise, rather they extend the ‘thrill of the hunt’ to a different venue.

4. Does This Dress Make Me Look Fat?

A University of New Hampshire researcher, Nelson Barber, investigated the shopping and purchase habits of different generations and concluded that one of the most distinguishing characteristics of Gen Y shoppers was their reliance on peers. Unlike older cohorts Gen X and Boomers, Gen Y wants assurance that their decisions will help them fit in and ‘conform with the crowd’.  Research conducted this year by Kansas City-based agency, Barkley, confirmed that Millennials shop for fun and relaxation, and they are twice as likely to shop with friends.

It’s interesting to note that female Millennials are twice as likely to shop with friends or significant others and they’re significantly more likely than older generations to see shopping as a pathway to relaxation. They’re also much more likely to consider access to shopping areas to be important in deciding on vacation destinations. Male Millennials appear to be much more comfortable with shopping than their predecessors; 30 percent say they shop for apparel two or three times per month, and 8 percent shop once or more per week.

Impact: If shopping is a social event, smart retailers should find ways to make it as fun and social as possible. Barber recommends greater use of peer-sharing tools, online and via mobile:

Barber recommends companies focus on attracting Generation Yers through peer interactions. Websites should be optimized with social networking, blogs, and live chat customer service. The mobile Web also plays an important role in how Generation Y socializes. “Because Generation Y is media savvy and conscious of being the target of marketing, brands that succeed will be those that open a dialogue, admit their mistakes, and essentially become more transparent.”

Post by Guest Blogger, Judy Hopelain

Brand managers have historically aimed for consistency in the online experience and have aimed to deliver a largely uniform presentation of their brands. Their websites house most, if not all, of their content and serve as the one-stop-shop for accessing it. This approach to online brand management has been possible as long as users could access a brand’s online assets through just one platform, the computer (whether desktop, laptop or netbook), and only a handful of operating systems.

Prepare for the Mobile Transformation of Brands

Brands are in for a thrill  — and brand management will be redefined — as Gartner forecasts that mobile will overtake the PC by 2013 as the main way users access the Internet. As Beth Murphy, CMO of the born-mobile site HotelTonight, told the audience at a recent SVAMA panel discussion on mobile marketing, “Mobile users have different expectations of their experience than their computer-based counterparts: they want it to be tactile and much more engaging.” Meeting these expectations will require redesigning the brand’s mobile experience, not just porting the computer-based web experience over to mobile platforms

Today, less than 30% of company websites are optimized for mobile access. Doing so requires understanding each mobile platform’s unique advantages and constraints — from text messaging on mobile phones to wireless roaming and apps on smartphones and tablets.  Google’s brand new gomo initiative is a reflection of the importance of optimizing for mobile, and the size of the opportunity.

New Demands for Brand Management

Brand management will mushroom as brand teams are called on to define the brand experience for specific mobile platforms, and to develop mobile style guides that define the user interaction and depth of experience on each one. They will also need to specify how the brand’s messaging hierarchy and overall brand positioning are expressed through mobile. In the process, mobile may afford new opportunities for brand meaning that had not previously been understood. So, mobile may well inform brand strategy as well as be informed by it.

Brand managers will also have to ensure their existing websites are optimized for mobile. To make the case to management, they might want to run a few mobile promotions first so they have the numbers to justify the request.

Mobile is going to make user experiences and brand management a lot more interesting. They should also be a lot more fun!

Judy Hopelain is a brand strategy consultant and lecturer at the Haas School of Business, UC Berkeley.

Contact her directly at judy@brandamplitude.com

By 2009, that had changed with the growing awareness that Millennials were different and important. From 2009 on there has been a steady stream of free reports, many of them very good.  In July 2009 I  listed what I thought were the best eight studies and provided a more comprehensive list in December. Since then, I’ve maintained a wiki (millennialmarketing.wikispaces.com) to keep track of the latest research as it comes out. It’s time to once again highlight the best studies of the past 12 months.

Here’s my list of studies from the past 12 months worth reading (in no particular order):

Pew Research: “The State of Millennials“ July 2011 (slide presentation)

McCann World Group: “The Truth About Youth” June 2011 (slide presentation)

Kiplinger: “Make Way for Generation Y” December, 2010 (article and slide show)

Euro RSCG: “Gender Shift: Are Women the New Men?” December 2010 (pdf)

Higher Education Research Institute: “The American Freshman: National Norms 2010″ January 2011 (pdf)

Chronicle of Higher Ed: “Who Are the Undergraduates?“ December 2010 (interactive graphic)

Center for American Progress: “The College Conundrum” December 2010 (pdf)

MacArthur Foundation: “BluePrint for the Millennial America” 2011

Mr. Youth Agency: “Meet the Class of 2015,” October 2011 (video and pdf)

Edelman: “Millennials 8095“, October 2010 (pdf)

JGA and Achieve: “Millennial Donors 2011″

Want more? Check out our wiki: millennialmarketing.wikispaces.com

Did I miss something cool? Email me: carol@brandamplitude.com

Palace of Versailles

The best part of learning history is realizing how much of what happened in the past echoes in events and decisions of our own day. Last week Ken Burns’ new documentary series, “Prohibition,” spelled out the unintended consequences of  a well-meaning effort to fight an alarming social ill. The sad lesson about what happens when we attempt to ‘legislate morality’ still resonates.

A Turning Point in the French Revolution

I just learned that one event in 1790, over a year after the storming of the Bastille, turned out to be pivotal in securing the gains of the Revolution. This event, related in Paris: Capital of Europe by Johann Wilmm, seems eerily reminiscent of the current gatherings on Wall Street:

[On the morning of October 5] “A large gathering of people and unusual excitement filled the square in front of the Hotel de Ville, when several large groups of women, who had gathered in the districts, began to arrive; they asked to be admitted to the Hotel de Ville and stated that they wished to speak to the mayor and representatives of the Commune to inform them that they had decided to march to Versailles. They added that they would not permit any men to join them.”

This spontaneous movement of women had no leader and no demands, just a sense that something was not right.Ultimately, the National Guard did join the women’s march, and the rest as they say, “is history.” The author writes:

“In the revolutionary history of Paris there had not been, nor was there ever again, anything like that mass action of October 5. All of Paris went to Versailles – for reasons that varied greatly – and saved the Revolution by bringing the king back to Paris in triumph.”

On the evening of October 5, Louis XVI gave his written agreement to the decrees issued by the National Assembly between August 4 and 11. Not many hours earlier he had said he would never consent to these regulations. Furthermore, Louis agreed to move back to Paris, and so did the National Assembly. They all set out on October 6 and that evening the king in Paris “as a prisoner of his people.” Three years later in 1793 he was executed, as every 8th grader knows!

The Modern Day Parallel

Fast forward two centuries and we see some startling parallels between the October Parisian women’s march of 1790 and the October Occupy Wall Street events of 2011. Could this leaderless, demandless group ultimately do what no political party has yet accomplished? We will see. But meanwhile, I think it is foolish of politicians and pundits to dismiss it. Something is not right, and the people know it.   If there was a King Louis in New York, he would be on his way to Washington.

Millennials (Finally?) On the Move

Collectively, marketers know Millennials are a potent force. They are a large cohort, more homogenous than older cohorts due to their relative similarity in life stage and upbringing,  and uniquely empowered through technology to ensure their voices are heard. What has been more surprising up until now is why they haven’t mobilized. I speculated  in the past that it may be that they are less comfortable advocating on their own behalf than that of others. Now that the economy has given them a big enough cause, the time may have come for them to mobilize.

It is characteristic of Millennials that their movement is relatively calm, leaderless and still collaborating on its agenda. It may take a while for them to find their voice, but once found it is sure to be heard.

In fact, it is precisely their lack of unity and singular demands that may be its greatest strength, just as it did the Parisian women of 1790. Beka Economopoulous, an unofficial media spokeswoman for Occupy Wall Street, told the International Business Times that she feels the lack of one specific demand actually gives the movement more strength.

Much of the media attention on Occupy Wall Street has centered on the lack of singular demands and unification amongst the hundreds of protesters camped out in Zuccotti Park. “The longer the occupiers don’t have demands, the stronger they are,” said Economopoulous, a vice president at Fission Strategy,  a social media company specializing in strategies for nonprofits and foundations. “I don’t believe there will be a stand on one particular reform that we want to see happen. We believe the system is fundamentally broken.”

According to one young marcher, the Occupiers want to preserve a system where everyone has an opportunity to pursue their dream which now seems corrupted. The writer, Dax Devlon-Ross, claims that the movement is actually inspired by the death of Steve Jobs and his widely circulated Stanford commencement speech:

It may not seem that way today, but in the beginning nobody wanted to listen to the Occupiers either. Even now most of us still won’t allow ourselves the permission to dream of a world without widespread greed and corruption. Most of us are still resigned to just getting a piece of the pie. It’s understandable. Corruption and disillusionment rob our faith and steal our dreams.

This is where Steve Jobs fits in. In a rightly celebrated 2005 Stanford commencement address that has been viewed on Youtube some 10,000,000 times, Jobs talked about the inevitability of death and the urgency of life:

Your time is limited, so don’t waste it living someone else’s life. …

Occupy Wall Street is fundamentally about breaking free of the dogmatic thinking and policy making that has resulted in a wildly unjust social and economic order.

More than Just Millennials

I’m not sure what the modern day parallel would be to the National Guard of  1790, but given the mood of the country it may not be long before others join the young marchers.

According to Pew Research, it’s not just Millennials who feel this way. A recent report eloquently spells out a high degree of disillusionment with the system, and a sense that it no longer works fairly for everyone.

• Fifty-four percent of Americans believe “businesses make too much profit”.
• Forty-seven percent believe Wall Street ‘hurts [the economy] more than it helps.”

What’s more, Pew says these attitudes do not divide cleanly along partisan lines.  I also suspect they do not reflect age differences. Many trends that started with Millennials sparked change in other generations. Why not this one?

We are witnessing a cultural moment celebrating a life well-lived inspired by the death of someone who was NOT a politician, a sports or entertainment icon, or a religious leader.

What makes this  testimony so remarkable is the high degree of consensus about what made Jobs’ life admirable.

Steven Paul Job’s life, ideals and accomplishments resonate across the generations. He was born at the height of the Boomer generation in 1955, but in many ways he was the ultimate Millennial, and also the ultimate Gen X’er. His 2005 Stanford commencement speech has over 5 million hits on YouTube so far. Perhaps this says something about generational differences: they may be more on the margins than on the big ideas.

Above all, Job’s occupies a special place in the hearts of Millennials. On The Next Great Generation blog, Millennial, Meghan Ross, writes:

…the iPod, the iPhone and the iPad have granted us accessibility to the world at the touch of our fingers. These products (along with the MacBook and MacBook Pro) not only make an endless amount of tasks easier to accomplish, but they also are present for some of the most significant life events we experience. I had my entire music collection in my pocket the first time I left the country, read my first “real world” job offer email from my iPhone, and completed my final undergraduate projects on my MacBook.

In fact, it’s hard to imagine Millennial life without Apple products, as this infographic demonstrates. Would Gen Y be so “Millennial” without them? Ross goes on say that Job’s greatest contribution, however, was his exemplary life, “his unwavering beliefs and an acknowledgment of unavoidable death that drove him to take chances on life’s uncertainties that come with chasing your dreams.” Similarly, Melanie Shreffler write sin the Business2Community blog, “Although Jobs wasn’t a Millennial, he “embodied the Millennial spirit of innovation and entrepreneurialism, following his passions and not worrying about what the outcome would be.”

An entire generation now has a shared idea of what it means to be a leader that has nothing to do with titles held, degrees earned, fashion (turtleneck aside), or social media Klout. Being a leader is about who you are and what you stand for. Jobs inspired us to understand that leadership is about more about great taste, willingness to  collaborate and a laid back working style.  As Shreffler explains, the Genius of the Genius bar is that it demonstrates, “Anyone can be an expert, even if they’re young and wearing jeans and a t-shirt.”

Above all, Jobs’ enduring contribution will be his demonstration that it is possible to live your values.

The power of the Stanford commencement speech comes from Jobs’ commitment to his sense of self even in the face of devastating loss and death. In the end, Millennial values are not that different from those of other generations. They aspire to be successful, to make a difference in the world, to have functional marriages, and to be good parents. 

What will make Millennials unique is — if they can manage it —  is to hold on to their sense of self and values even as life presents challenges that have caused other generations to make compromises. This is what makes Jobs so inspiring… and so Millennial.

Footnote: I am writing this on my latest computer, a desktop Macintosh, my first Apple that wasn’t a phone or iPad. Seems fitting…

Consequently, identifying and understanding Millennial passions is an important first step in designing effective marketing programs.

Last week the Kansas City-based agency,  Barkley, shared new research that shows Millennials have a greater range of activities they are passionate about than those over 35. Significantly, Milennials are more likely to define success in personal terms and to put greater importance on it than older generations. “Seventy-nine percent* define success as “doing what you are passionate about“. Today’s youth are not influenced by money or the image of success. In fact, even in their online communities, only 6% feel that “having lots of friends on Facebook” is an influential quality. The vast majority believe “Being True To Yourself” is inherently more influential in life (62%).” *

Millennials  want to be defined by their passions, not their careers.

Last week I moderated a panel at the conference Barkley sponsored to reflect on the findings of their research and its implications for marketers,  “Share.Like.Buy” in San Francisco. The panel was titled “Tapping Millennial Passions,” and the panelists were noted Millennial researchers:  Barbara Bylenga, CEO,  Outlaw Consulting, Alex Smith of Mintel, and Tracy Panko, CEO, Spiral16.

The session focused on how Millennial passions are expressed and how they differ from those other generations. The panelists also discussed the potentially disruptive implications of these differences for marketing products and services across a number of categories.

Alex Smith began by noting that while Millennials’ passions may be similar in some ways to those of older cohorts – the environment, causes, music – the way they express and pursue those passions is very different. They have more tools to express their passions, which are used to curate their personal identities and gain attention.  Their overall goal is to express themselves in a way that is true to who they really are.

Barbara Bylenga added that Millennials are especially passionate about things that impact others: the planet, the environment, social justice, poverty. They see their passions as a way to define themselves as ‘changemakers’. What other generations might consider an ‘interest’, Millennials see as central to who they are. They define success in terms of their ability to turn these interests into accomplishments or even a career. Hence their passions are especially motivating.

Use a lifestage lense to predict and plan for Millennial impact

Bylenga says lifestage is a good lense for thinking about how Millennials will change categories.  The latest Census data confirms Millennials are putting off childrearing, staying single longer.  Currently they are in the ‘explorer’ lifestage, but as they mature, many are entering the ‘spinner’ stage, forming households and settling down, and in some cases readjusting but not necessarily abandoning their passions. They still want to make a difference, but will realize (rationalize?) that making a differences lies in the cumulative effect of small decisions, little actions, not necessarily a big career accomplishment. Every little decision is going to take on added significance. Marketers can leverage this insight by helping them feel like their consumer choices are helping make a difference.

Bylenga went on to say Millennials will increasingly see it as a stepping stone to independence, with many aspiring to be entrepreneurs rather than bind themselves to a sure paycheck.  (In fact, this prediction may be already coming true. There was a 250% increase in the past two years in the number of Millennials who choose freelance work over a job.)

Characteristics of brands that generate passion among Millennials

When asked the characteristics of brands that generate the greatest amount of passion among Millennials, panelists repeated mentioned the importance of authenticity. According to Barkely’s research, Livestrong is the number four most recognized charity among this age group, a position it achieved by being authentic according to research by Spiral16, said CEO, Tracy Panko.

Despite dramatic and controversial events surrounding Livestrong founder Lance Armstrong, the Spiral16 data shows that Livestrong has continued to successfully engage their community and turn them into passionate evangelists. Besides amassing a huge following on Twitter, Livestrong has also spread its influence and message across other social media platforms with a clear and concise message. Eight out of the Top 10 most influential web pages in the study are components of the Livestrong organization, while the remaining two pages were created by passionate Livestrong fans. (The RSS feed for the Livestrong blog ranked even higher — number two — than blog URL itself.)

Panko points out that this kind of community and presence is impressive. As much as brands would like to, they cannot just control online attitudes at will. A digital presence this dominating, nonprofit or not, can only be built up from years of consistent hard work and clear strategizing. She also cited Patagonia as another brand with a strong authentic brand with special appeal to Millennials. Patagonia’s willingness to willingness to show the less desirable parts of their brand suggests an honesty that allows them to win with consumers. Other brands cited for their authenticity were Trader Joe’s and In ‘N Out Burger.

Sunday evening Netflix CEO Reed Hastings announced via a blog post that the company will be splitting the brand in two – Netflix will carry on as video streaming service only, while the newly coined “Qwikster” will continue to offer the DVD by mail service upon which the company was originally founded.

Curious Move

The announcement came on the heels of reports that some 600,000 customers had left the company in response to their controversial recent price hikes (for some, allegedly as much as 60%), and was offered as a kind of half apology – not for the price hikes themselves, but for communicating poorly about why the changes where necessary at all.

By Hastings’ own admission, the manner in which these changes were made left much to be desired from a customer relations perspective. It doesn’t take more than 10 seconds on Google to find scores of angry Netflix fans expressing emotions ranging from  disappointment to anger to downright befuddlement. Indeed, their reactions are understandable, if not entirely justified. What originally was a questionable price hike (from the consumer’s POV) now comes with a generous side of hassle to boot. Two bills to pay, not one. Two queues to manage, not one. Two sets of ratings/reviews to parse, not one. It’s hard to imagine that ‘non integration’ wasn’t a guiding principle behind the decision.

Curious Timing

Yet perhaps as striking as the announcement itself is WHEN Hastings decided to break the news – on Emmy Sunday, when much of his customer base was likely either immersed in the award show itself or Sunday Night Football. It came across a bit like a teenager making amends with his parents just before church starts, or during a birthday party, or at some other equally opportune time. This wasn’t an apology that inspired much in the way of sincerity or confidence.

What to Make of It?

As a marketer, my first reaction to the news was actually quite different – wow, what a gutsy move, I thought! Whether it succeeds or fails, I have to respect the boldness of the decision, which Hastings consciously admits was borne out of a fear that his brainchild would suffer the same fate as other old media distribution giants like Blockbuster and Border’s.  And while I’m still scratching my head at whether it’s the right move for either the brand(s) or their customers, I can’t help but feel like from a brand image perspective, Hastings’ announcement was another giant misstep, another half measure.

If Hastings believes so strongly that this move is the ‘future’ of content distribution, then why not embrace that point of view wholeheartedly, even with some irreverence? Netflix was the future of video rental 10 years ago, and we’re doing it again. There will be a few growing pains along the way, so you’re either with us (and the future), or you’re not. Who’s on board? The most price sensitive customers in the bunch would have jumped ship anyway, and whatever core of loyalists Netflix has would have admired the audacity and confidence from the consumer’s perspective, much like I did from a marketer’s perspective.

Instead, he offered what can only be described as a weak apology without taking way any of the pain, and actually adding some! Sorry guys, it will cost you some more…and now you’ll have to manage two accounts…but…but…but…?

But WHAT? I suppose only time will tell, but if Hastings is smart, he’ll provide that answer, this time without apology, and soon.

Image link: http://www.pollsb.com/polls/p13684-explain_this

Meanwhile, large numbers of unsold and foreclosed homes are sitting empty, losing value by the month, and putting a drag on the real estate market and our economic recovery.

Are Millennials the Solution to the Nation’s Housing Crisis?

I’ve written before that lack of jobs and high student debt are holding young adults back from contributing to our economy as generations before have done. While this is more a symptom than a reason for our economic crisis, Millennials’ economic well-being is essential to the recovery. While  I am not normally an advocate of government spending its way to prosperity, some spending is more strategic, and dollars applied to young adults is more likely to stimulate the economy than dollars spent on older Americans.

Recently, Morley Winograd and Michael Hais, authors of Millennial Makeover, advocated for government action to translate student loans into home mortgage loans to benefit both young adults and the economy in general. Here’s the specific outlines of their proposal. (Are Millennials the Solution to the Nation’s Housing Crisis? 7.17.11)

Today’s housing crisis requires a radical reinvention of the basic home mortgage to be offered to those buying their first home. Under this proposal the length of the mortgage could be extended up to as many as 50 years, reflecting the increased life expectancies — and longer working careers — that most Millennials can expect to enjoy. Since no market for such debt instruments currently exists, it would be up to the federal government to create one through the process of reinsurance, just as it did in 1934.  

 

To further encourage home buying by Millennials, the federal government should also provide incentives to financial institutions to swap out the principle of the Millennials’ student loans in exchange for a new loan, whose principal would be collateralized by the value of the real estate the former student would be acquiring. The student loan would be paid off as part of the mortgage, making Millennials better able to afford a home and freeing up additional discretionary spending that current worries over student debt curtail. Today’s lower housing prices today might make this package both attractive to investors and financially viable.

Do Millennials Dream of Home Ownership?

This plan only makes sense if Millennials actually want to own houses. I used to think Millennials had turned their backs on home ownership, seeing it as a bad financial bet and opting for the freedom, flexibility and lifestyle advantages of renting close to where they work in urban areas.

Yet recent research suggests that may be changing and Millennials indeed are thinking of homeownership. 

According to Pew Research, 64% of Millennials say it is very important for them to have an opportunity to own their own home; twenty percent named it as one of their most important priorities in life, right behind being a good parent and having a successful marriage.  In the shorter term,  Trulia’s biannual American Dream survey shows 26% of Millennials have become more positive about owning a home over the past six months compared to 18 percent of 35 to 44 year-olds and 45 to 54 year-olds, and 22 percent of baby boomers.

With the oldest quarter of this cohort about to hit their thirties, perhaps its time to think about how to make it easier for the dream of homeowernship to become a reality? 

“Younger alumni are giving at lower rates, and are more difficult to retain as donors — even when compared to those who graduated just a decade earlier.” (Inside Higher Ed, 7.12.11)

 

 

“Millennials – also known as Gen Y and Echo Boomers – drive less than any generation that came before them. According to the U.S. Department of Transportation, the number of drivers between the ages of 16 and 19 has declined 15 to 25 percent over the last 30 years.” (at.ford.com)

 

“The NPD Group, a leading market research company, found in its recent National Eating Trends survey that members of the Millennial generation, also known as Generation Y, have significantly decreased their rate of dining out. …Twenty-somethings were once the group that dined out the most frequently but their incidence of dining out has decreased greatly in the past two years.” (What Drives Millennial Food Choices, 08.12.10) 

This list is just the beginning. I could easily cite similar statistics from housing, higher education, travel, home appliances and more. In category after category, the marketing trends are not what was expected, and the reason is largely due to diminished economic circumstances.  The jobs that ordinarily would go to young adults are not materializing, or being occupied by older adults who simply can’t move on as planned.

Growth in many mature markets depends on population growth, but that is really just another way of saying we need ‘new consumers’ and ‘new households’ to grow. Our population may be growing, but households are just getting bigger as twenty-somethings move in together or back home.

A Millennial, Reeshma Saujani writes in the Huffington Post (Advocating for Young Americans, 7.28.11), that “The dignity of work transcends class or race or gender — it is a universal American value, and we have an obligation to ensure that our young people have the chance to achieve their full potential.”  She’s right of course, but there is more at stake here, it’s the potential for our economy to get moving again.

Youth unemployment is an issue for everyone. 

According to Millennial expert, Don Tapscott, youth are under deep stress due to lack of jobs. In June he asked “Will Youth Unemployment Demonstrations Come to America?” (6.23.11).  

“This spring, more than 1.6 million students graduated from American colleges and universities. Many will simply join the swollen ranks of the unemployed. After taking on enormous debt to finance their studies, many are ending up competing for unpaid internships or working in low-paying jobs for which their education is irrelevant…

According to the International Labor Organization, youth unemployment in most of the world is stuck at about around 20 percent. “Young people [are] nearly three times as likely as adults to be unemployed,” says the ILO. In Spain more than 40 percent of young people are unemployed, in Italy it’s 28 percent and in France the rate is more than 20 percent.

In the UK, many young people are simply giving up. There, about 40 percent of all unemployed are age 16 to 24, which means almost 1 million young adults are jobless. More than half of the 18- to 25-year-olds questioned in a recent survey said they were thinking of emigrating because of poor job prospects.

These shocking figures should be a wake up call for everyone.   Tapscott concludes, “Young people need jobs, and we shouldn’t wait for mass protests before taking serious action.”  

When Congress and the government finally resolve the insanely self-inflicted crisis of the moment, it is my hope that they will stop talking about the economy in global terms and start facing the real issue – lack of  jobs for younger workers or we may see youth radicalization in the West before long .