NASE News

Millennials in the Marketplace

They are the largest living generation in the United States, with more than 75.4 million members according to U.S. Census data. Surveys peg their expected spending in 2017 at $200 billion.

They are Millennials—Americans in the prime of their lives at ages 18-34, and a group often misunderstood by companies large and small. Some consider them slackers who never launch from their parents’ homes because they don’t want responsibility. Others misconstrue Millennial’s active digital lives as meaning they struggle to make human connections.

But small businesses should avoid making too many assumptions about Millennials, experts say, and instead, spend time getting to know them as customers and potential new hires, to tap into their power as an economic force for their business.

“The millennial generation is fairly expansive,” said Miriam Dushane, Managing Director, for Linium Recruiting in Albany, N.Y. “It touches on a lot of age groups.”

Born between the years of 1981 and 1997, Millennials are not just single twenty-somethings hanging out at coffee shops, snowboarding and snap chatting. For example, it’s estimated that 25% of Millennials have taken the plunge into parenthood.

“They are very individualistic. It’s hard to identify them as a single, cohesive group,” said marketing guru Pam Danziger, author of “Shops That POP!” and founder of Unity Marketing in Stevens, PA.

“It used to be, from maybe early Baby Boomers and the World War II generation, that there were distinct life stages people went through at a specific age,” Danziger said. “Today, ideas of life stage have expanded. We have women in their 40s having their first children. People are moving through life stages at a very individual timespan, so Millennials are a very nuanced generation.”

For example, as much as they enjoy engaging with large corporate brands, Millennials are inclined to buy from small firms. In a survey of 5,000 consumers (released just before Small Business Week 2017), AT&T reported that while 59% of Millennials have never worked for a small business, approximately half are willing to pay more for a product or service to support a small business. This compared with 38% of Gen X respondents (age 35–49) and 42% of boomer respondents (age 50–75).

Danziger believes this is one of the greatest myths entrepreneurs have about Millennials—that their propensity to shop online with big e-tailers will herald the demise of the Main Street small business.

“Amazon is the online shopping category leader, and has the best handle on meeting the shopping needs of this generation,” Danziger proposed. “Well, the fact is, Amazon is finding the need to open physical retail stores.”

In her most recent white paper, “Small is the BIG Story in Retail,” Danziger forecasts that “small, independent, local retail businesses” are primed for success. The key, she says, is delivering “new, different, personalized, specialized retailing experiences that no large national retailer can ever hope to achieve. Consumers today demand a true customer-centric retailing experience the way today’s specialty independent retailers deliver it, by both necessity and design.”

How Millennials end up at a small business cash register, however can be distinct to their age and experience. With more and more consumers living their lives online, social media is typically the most cost effective means for small firms to reach this prized audience, and that means entrepreneurs need a strong online presence.

Deloitte Consulting LLP estimates that 47% of all Millennial consumers use social media during their shopping journey, compared to 19% percent of non-Millennials. Similarly, 37% of Millennial consumers spend more due to their use of digital, versus only 23% of non-Millennials.

Facebook claims that more than 65 million small businesses have a page on its platform, and that approximately 80% of its users follow at least one small business. However, Facebook has a smaller level of influence with Millennials than it has for older generations, according to Sprout Social, the Chicago-based digital marketing and communications software firm.

A recent survey conducted for Sprout Social showed that while Facebook was the number one social media platform Millennials used (33%), younger Millennials (18-24) identified Instagram as their favorite social media platform (25%), followed closely by Facebook and Snapchat (24.4% and 23.3% respectively). In comparison, about 65% of Gen Xers and Baby Boomers cited Facebook as their number one social media platform in the Sprout Social survey, which reached 1,000 Millennials, Gen Xers and Baby Boomers online this January.

“Just as we were following celebrities ten years ago, Millennials are following people you might not view as a conventional celebrity,” said Stephanie Abrams Cartin, CEO at SocialFly, a New York-based social media and influencer marketing agency.

Cartin noted how Emily Schuman, of Cupcakes and Cashmere fame, has nearly 400,000 followers on Instagram, tracking her every post, review and endorsement. Deloitte recommends that “retailers should look for ways to ‘influence the influencers’ through their marketing campaigns. This channel offers an opportunity to build and maintain trust.”

While many entrepreneurs today build their word-of- mouth marketing online, Danziger says entrepreneurs should first look at their existing clientele. “Word of mouth from your current customers is the number one, most effective way of marketing to Millennials,” Danziger said.

She believes that they likely are gaining more endorsements and sales from good old fashion peer-to- peer communications that are driven by great customer service and unique service and product offerings.

“Good customer service isn’t strong enough. You have to do something extraordinary your Millennial customers don’t get somewhere else,” Danziger said.

Entrepreneurs should also look to tap into Millennials innate curiosity, she said. “We humans are curious by nature. We are compelled to satisfy that curiosity. Your business model should introduce mystery to the shopping or dining experience, in everything from your storefront, to how you merchandise. The curiosity factor is one the retailer needs to figure out more.”

“So many stores follow a similar blueprint. A coffee shop or pub, you know what it is going to look like. If you can make a coffee shop look like a fashion store, create that box of expectations around a different kind of idea, you can stand out.”

Danziger likes Doyle and Doyle, a jewelry store in New York City’s meatpacking district, as an example of what she is describing. “In the typical jewelry store, you go in and there are lots of cases, and the jewelry is displayed under glass. Doyle and Doyle puts all their jewelry on the wall, in a frame behind glass. It’s displayed like a piece of art. Those are the kinds of things you can do. Change things up to stimulate and invite people in. There is the pursuit of merchandise, or the imagination of experience.”

Finally, she suggested, a small business can also generate more analog word-of- mouth marketing by simply hiring millennials. “That’s very important,” Danziger said.

Don’t sell. Tell a Story

According to Sprout Social and other experts, 59% of Millennials tend to follow a brand on social media before they purchase a product from them, with one third of Millennials engaging with a brand each month. (In comparison, only 14% of Baby Boomers regularly interact with a brand online.)

To attract Millennial spending, small businesses should be using their social media platforms to entertain and inform potential customers, Cartin said. In fact, Sprout Social says 42% of Millennials follow brands to obtain information about their products and services, while 38% follow brands for entertainment value.

Interestingly, 58% of Gen X consumers are looking for deals and promotions, and another 41% are following a brand for contests. Baby Boomers are looking for a mix of deals and promotion (60%) and information (53%).

But if small business owners are going to drive sales through social media marketing, they need to be active and authentic, say experts. This means listening to your customers online, and building emotional connections.

Said Cartin: “With social media, it’s all about story telling—creating your brand through real experiences.”

Another key for attracting Millennials is cause marketing. More than nine in ten Millennials told Cone Communications that they will switch brands to one associated to a good cause. According to the 2015 Cone Communications Millennial Corporate Social

Responsibility (CSR) Study, Millennials are “prepared to make personal sacrifices to make an impact on issues they care about—whether that’s paying more for a product (70% vs. 66% U.S. average), sharing products rather than buying (66% vs. 56% U.S. average).

“Millennials tend to want to buy products and services where they can give back. It’s the reason why so many companies are popping up with cause marketing campaigns,” said Cartin at SocialFly.

Cartin cited New York-based Bombas, an online sock retailer. For every pair of socks Bombas sells, they donate a pair of socks to a homeless shelter. “Millennials want to know that not only are they getting something for themselves, they’re making a difference,” Cartin said.

What attracts Millennial shoppers, also attracts Millennial employees

At the same time that Millennials are impacting the small business cash register, they’re also reshaping the small business workplace.

By 2020, PwC estimates, 50% of the workforce will be Millennials, and how small business owners adapt to this generation’s wants and needs could very well impact their business’ success.

The first thing entrepreneurs should be aware of is that they are more attractive to Millennials if their values sync with this generation’s values. In the 2015 Cone Communications CSR study, 62% of Millennials said they were willing to take a pay cut to work for a responsible company (vs. 56% of the overall U.S. workforce).

Also important to Millennials is a company that will provide them with fulfilling work, the opportunity to have an impact on their employer, and a company that will help them grow personally and professionally.

Dushane’s Albany recruiting firm works extensively with educators, technology schools and high-tech firms to recruit employees. She finds that “money isn’t the ultimate factor” for Millennials. “They want meaningful experiences, the ability to continue to learn, though not necessarily to proceed in traditional professional development,” Dushane said.

Cartin at Social Fly finds differences between Millennials who have recently graduated from college, and those who have been in the workplace for a few years.

“When we hire directly out of college, it’s harder to keep them for a longer period of time. For them, we are constantly talking about career advancement. They want to get to the next thing quickly. They want to move as fast as possible. But if someone is 3-5 years out of school, they have seen what it is like to work elsewhere, they fall in love with the environment, and they collaborate more with us on their development.”

Dushane agreed with Cartin. “I’ve met Millennials who get out of college, and expect to be a manager or higher. But there are others who simply want a fair wage and a chance to continuously learn and improve themselves. If you give them the meaningful experiences, they’re much less interested in growing through the ranks quickly.”

At Movable Ink, a New York City software company that provides dynamic email marketing campaigns to large firms, 87% of their employees are Millennials. Alyssa DiGirolamo, who works directly with the company’s executives, said the question that Millennials ask the most is

“What’s the room for growth in this position?”

But growth isn’t “solely defined by internal mobility,” she said. “It’s more about what they can learn and accomplish in the next 365 days to become a more well-rounded professional. Giving them exposure to all facets of the business and providing support for their career goals, facilitates their development. By not keeping employees in a “box,” this allows people to learn and understand what they are really excited about and for us to move them around, whether it’s client service, product, marketing or sales.”

Millennials will determine if you are the right employer for them the same way they will research you as a customer—online. This means entrepreneurs need to actively curate their image as an employer.

Dushane advises entrepreneurs to Google themselves and their companies before embarking on recruiting. “What does your brand look like online?” she asked. To attract Millennials, “align your values with your Facebook, LinkedIn, Twitter presence. You need to be very vocal and visual in the community. What are the cool things that go on in your company? Market your social awareness.”

All of Social Fly’s 16 employees are Millennials, including co-founders Cartin and Courtney Spritzer. Millennials regularly communicate with Cartin and her company through social media long before they apply for a job. “They will reach out to us on Instagram, Twitter, engage with our content. Then, one day, they will send us a direct message asking if we’re hiring?”

“So we use our social accounts to recruit. We’re posting about what we are doing in the office, the fun we have at work here.”

Movable Ink uses a balance of technology and good old fashioned networking to recruit Millennials.

“Equally as important is to have outstanding recruiters on your team who are incredibly skillful at uncovering great talent, particularly those passive candidates who may not have otherwise applied. You can’t underestimate the value of referrals and empowering current employees to build and utilize their networks. It’s a great testament when employees refer other people because they love where they work.

Ultimately, Dushane said, today’s entrepreneur has to shed their assumptions about Millennials and embrace the possibility that hiring from this generation could be a fulfilling experience.

“Millennials are a great generation because they are more tech savvy, globally aware. We can build good employees for the future, but we have to embrace our differences and learn from each other. Just be open-minded about Millennials. They can teach you a lot.”