Challenger brands face a number of difficulties when trying to carve out their place in the market. Appealing to a powerful block of shoppers could completely change the game and spur success and growth, but choosing the right shoppers is key. Millennials in particular offer an advantage, and not just because they’re young with plenty of future spending ahead of them. We will take a brief look at Millennial shoppers and how they can impact sales for challenger brands.
Millennial Shopper Insights
Millennials are no longer the youngest shopper segment or the only digital natives — that honor now goes to Gen Z — but at 80 million strong in the U.S., this cohort is the largest in the country. While their expenditures haven’t quite caught up to the biggest spenders (Boomers), it’s still significant: $600 billion annually. They represent 28% of all daily consumer spending per person, and are expected to represent 35% by 2030.
They also break some retailer expectations. Only 16% make a majority of their shopping purchases via smartphone, although roughly 41% have shopped online at least once per week. Another 35% of Millennials prefer to shop online for home delivery, but that doesn’t mean they don’t want to shop in-store. More than half (54%) prefer to do shopping in-store and take products home with them.
Nearly 80% are heavily influenced by price, making them more likely to choose store brands or off-brand choices than other generations. Millennials are also as likely to trade-up as they are to trade-down, especially Millennial moms. This is because Millennials are not only self-informed, but well-informed. They’ll seek quality and value, which means they’re also likely to avoid luxury brands when an affordable alternative meets their standards. A large majority of Millennial shoppers (78%) prefer experiences over things, and that means they’ll save money on certain kinds of purchases (like groceries) in order to splurge somewhere else. They tend to be time-starved, especially Millennial parents, so experience also means they put a premium on convenience. Nearly half (48%) say they don’t have enough time, and 43% of Millennials say fast checkout is a major factor in purchase decisions.
The Struggles of Being a Challenger
A fast moving marketplace and constantly evolving technology and communications options become even more difficult for challenger brands who are easily outspent by their big-name competitors. Disruption is often emphasized, but it’s also hard to come by for challengers that have to fight the inertia that underlies shopper loyalty. Traditionally, challenger brands have to find a way to break through by presenting the shopper with a well-distinguished category choice. Innovation of some kind is required to capture attention and stimulate growth.
Tips for Changing the Game
Millennial shoppers provide a great opportunity for challenger brands based on their shopping habits. With their willingness to either trade-up or trade-down, and once a brand has won their loyalty, Millennials will go out of their way to seek it out. This often relies on challenge through ideology. Here are a few more tips for reaching out to Millennials:
- Remember that Millennials are willing to pay more if there’s a good reason to. Don’t worry about trying to race to the bottom price, and instead find a good reasoning for your price point and communicate that.
- Cause marketing is highly effective with Millennials, as are shared values. Tap into their social and environmental beliefs when they align with your company.
- Transparency is a must. Leverage social media to give Millennials insight into who your company is and what you care about.
- Focus on what makes your brand unique and how that fits into the Millennial’s life. If you’re filling a niche that’s gone untapped, emphasize that. If you’re running a disruptive business model, focus on that.
- Remember that Millennials aren’t going to just trust your brand — they’ll trust their friends first, and reviews from other customers second. Enable, encourage, and engage with shopper reviews. Consider tapping into influencer marketing.
- Don’t rely solely on digital display ads, since Millennials are adept at identifying and ignoring ads, and are likely to deploy ad blockers. Traditional advertising still has a role to play.
- Since Millennials prefer experiences over buying products for the sake of having more products, build a brand experience they’ll want to return to and share about.
Millennials are a critical shopper demographic for any company, but challenger brands in particular have a lot to gain by earning their attention. By differentiating your brand through value, quality, and ideology, you can appeal to a segment that’s willing to spend more when the brand deserves it. Use the tips we’ve listed above and change the game for your brand.