Millennials: No Longer a Fantasy Target
An old friend who owns a well-known specialty AV store commented to me recently, “My customers are literally dying. I feel like I’m going to a funeral every other week.”
The specialty retail/integration space has largely been built and sustained on selling home technology to Baby Boomers. But where are the Baby Boomers now?
By one study, the Baby Boomer (age 55+) share of the home technology market has fallen off a cliff, dropping from 36 percent in 2014 to 18 percent last year. At the same time, 25-to-44-year-old purchasers have risen to more than 50 percent of the home technology market. We’re at a crossroads.
The inescapable conclusion: Target Millennials or face declining sales.
But we’ve been hearing about these Millennials for years, ad nauseam. Our eyes glaze over because we hear it so often. It isn’t our target. It isn’t realistic to hope to sell them. They use GoPros and wear Fit Bits, for God’s sake! Not our customer.
But I’d argue that Millennials are no longer the fantasy target they once were for the specialty channel. They are a realistic target market, and one we must focus on right now, if our businesses are to remain vital growing entities.
Here are a few facts (and mostly accurate generalizations):
- Millennials are the largest generation in U.S. history. There are 92 million of them vs. 77 million Baby Boomers
- They are moving into their prime spending years. Their spending power is now reaching trillions of dollars.
- They are attaining senior professional roles, getting married, starting families, and buying homes. In fact, they are entering they peak home buying years right now. Many are literally moving from their parents’ basement to their first home, and there is real desire to enhance the new living space.
- They don’t value cars, and don’t allocate large portions of their discretionary spending to them. Think Uber. Think sharing economy.
- They don’t value luxury in the way Baby Boomers do. They are mistrustful of high price-points and expect brands to offer premium performance within their financial reach. Think iPhone.
Immersive Experiences: Do They Care?
Ah, but do Millennials even care about immersive experiences? It seems that a large portion of the A/V world thinks they don’t. Is this true? They are attending live concerts and big-budget movies in record numbers. They spend hundreds on three-day EDM (Electronic Dance Music) festivals - the fastest-growing segment in the music industry, which is not unlike being inside of a giant speaker. Where is the disconnect?
I would make the case that few brands are helping them do the math that they can have immersive experiences and compelling technologies in their own living space. That’s the challenge!
With 4K creating a single best-viewing experience in the home and more content at their disposal than ever before, perhaps there are opportunities to augment that convincing visual experience with home theater surround sound, automation, networking and other home technologies.
But Millennials need to be approached differently than Baby Boomers They have different values and they have different aspirations. Most importantly, they have different ways of engaging the world and learning about products and brands.
What drives Millennial preferences? Here is a thumbnail list, based on our experiences at SVS:
- They expect premium performance and aspirational brand positioning just like Baby Boomers do, but with pricing that is inclusive and within reach of broad-based audiences.
- They look for social media validation, buzz, and “virality.”
- They expect to find third-party validation, both user reviews and press reviews.
- They spend time in digital communities and blogs, sometimes just lurking and not necessarily posting or participating.
- They are heavily focused on mobile browsing and getting information instantly.
- Brand success arises from search penetration and proliferation, both organic and paid.
- They react to digital marketing visibility such as banner and retargeting advertising.
- When they engage with a brand or retail website, they expect to experience activity, vitality, and credibility.
- They do enjoy positive live product interactions, either through retail consumer events or via friends.
- They prefer a company with a “soul,” showing authentic and demonstrably customer-facing market engagement.
So where does that leave the retailer, if they are already being viewed through a lens of skepticism? To answer that question, look at the shared attributes of brands that are embraced by Millennials.
By choosing to work with brands that embody these future-facing qualities and by embracing them yourself, you will be sought out by the largest assemblage of technology buyers in history. Furthermore, by selling brands Millennials trust, you’ll begin to create lifelong relationships with customers whose appetite for technology will only grow over time as the connection between humans and technology becomes even more tightly intertwined.
Our industry is at a crossroads, and the choice is stark:
Follow Baby Boomers to the boneyard or embrace this vigorous and lucrative demographic group, and, of course, partners that can revitalize your business by engaging them with you.