Today is National Pie Day, a day where the public finds their local bakery and Instagram their enjoyment of a fruit or meat filled baked good, as they should. Of course, in the finance world, getting a piece of the pie goes beyond flaky crust and filling - it means capitalizing on a niche, trend, or demographic, and advertisers and businesses alike seem to want a piece of the millennial pie.
Millennials are defined as those born between 1980 and 2000. Not since the Baby Boom generation has the world seen this large of a group transition into their prime spending years. According to the US Census Bureau, there are a total of 92 million American Millennials, with over 79 million of them aged 18 years or older. Unlike Generation X and generations before that, Millennials are a unique group in that they have grown up during a time of rapid change. Thanks to technology, social change, new education, career opportunities via the -Internet, and an instant gratification consumer culture, this group is living with their parents longer, getting married and having children later, and, according to Vision Critical, has a purchasing power of $1.68 trillion.
While infographics and studies are informative, it’s always preferred to hear news directly from the source. Being an individual born in 1985, here are four ways to get a piece of the millennial pie.
Cash-Free, Automated, and Simple From an App
Having more options to access and securely transfer or spend money is definitely a plus for Millennials.
Companies like Postmates, Uber and Lyft have made purchases easier and safer with a cash-free model. By simply saving a payment method to a secure account, one has the ability to seamlessly make a purchase and leave a tip via an app without having to hand over their credit card or dig through their wallet for cash. Domino’s Pizza, Inc. (DPZ) took it one step further by allowing hungry individuals to order food by texting a pizza emoji.
Furthermore, financial institutions have had to keep up with the times by implementing transfers, check deposits, automatic payments, and bill pay on both desktop and mobile platforms. Alternative payment methods, like PayPal (PYPL), are popular among Millennials at checkout. However, fees and a cumbersome interface can be a bit of a drag. Paypal, specifically targeting Millennials, acquired Venmo, an app that securely transfers funds. Venmo was acquired through Paypal’s 2013 acquisition of Braintree for $800 million. As long as transfers are made via one’s Venmo Balance, bank account, or major debit card, the transfer is free, another word Millennials, like every other generation, love to hear.
Brands With A Purpose
For an increasingly socially conscious demographic, a great product or service coupled with a cause is a very attractive and mutually beneficial purchase. Toms Shoes LLC’s One for One campaign advertises that for every pair of shoes purchased, a pair will be donated to a child in need. Sevenly, an online merchant offering music-inspired apparel, creates seven-day cause campaigns inviting customers to make purchases that gave $7 to a weekly charity. Although the popularity of these types of business models have been at times attributed to “the halo effect,” businesses that reflect social responsibility can be very appealing to Millennials. In actuality, Millennials are more generous than they are given credit for.
According to CEB Global, Millennials spend a good portion of their income. However, millennials also factor in a percentage of their income to save, invest, and donate. Despite being the generation with the highest student loan debt, 84% of millennials made a charitable donation in 2014, and 70% donated an hour of their time, according to CNBC.
Social and Media Rich
Want to get a millennial’s attention? Make it personal, have a social media presence and make it visual. More importantly, prompt purchases and brand loyalty with video content. According to Contently, millennials not only follow brands on YouTube (GOOG), 70% of millennials are most likely to watch a company video when shopping online. Tone down the promotion, focus on storytelling in relation to a product or service, and watch those YouTube views (and revenue dollars) rack up.
Access Over Ownership
Netflix (NFLX) was an answered prayer to every struggling young adult who couldn’t afford cable and was tired of Blockbuster late fees. Spotify and Pandora (P) have changed the music industry where, come to find out, people will pay a monthly fee to listen to what they want and when they want, rather than cluttering their studio apartments with CDs and hard drives. Instead of having to choose between magazine subscriptions, Texture solves this problem by letting one read as many magazines as they want for a single monthly fee.
In the search for the most bang for our buck, contract-free and low monthly fee options trumps a cable bill, a phone bill, and thanks to ride sharing apps, a car payment. This successful business model has proven that the frugal minded and, at times, cash strapped generation prefers access over ownership.
The Trillion Dollar Pie
While the rest of the country can easily obtain their desired slice on National Pie Day, advertisers and marketers have their work cut out for them. The Millennial trillion dollar pie is up for grabs; companies just have to move them on a personal level, engage them with social media and videos, and make it easy to purchase products and services from their smartphone, and all for one low monthly rate.
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