Monday, May 4, 2009

4 Things Retailers Need to Know About Millennials

From the impact they are having on politics to their effect on the ways we communicate to how they are influencing every category of consumption to their spending and savings habits - Millennials are a force to be reckoned with. They are social. They want to be engaged. They seek authenticity and sophistication. Experiences that deliver will earn their loyalty.

The Economist Intelligence Unit conducted a study of Millennials last year and found that business executives believe them to care little about price, and most about convenience, style, taste, and peer recommendations. Are they right? Even when it comes to wine, recent research by Mintel/Simmons and the Wine Council shows that Millennials are different.

Here are key takeaways on what retailers need to know about millennials:
  • They want to be in the know: Millennials who drink wine are twice as likely to belong to a wine club (20%) and to drink at wine bars in the past three months (38%) than older groups, (Wine Council).

  • They want sophistication: Forty-one percent of Millennials who drink wine say they drink imported wine most often vs. only 24% of Boomers and 31% of Gen X'ers. For example 31% of Millennials have drunk a wine from NZ, compared to only 15% of Gen X'ers (Wine Council). And 40% percent of 25-34 year olds agree that more expensive wine tastes better compared to 31% of adults on average. (Mintel)

  • They are willing to spend more to make an impression: Millennials say they spend about $10 more per bottle than average across a wide variety of wine buying occasions. For example, Millennials say they would spend $40 on a bottle of wine for a special occasion compared to just $24 for all adults. (Mintel)

  • They value authentic experiences when they shop: Millennials are much more likely to purchase wine at a winery (33%), specialty liquor store (40%) or gourmet food store (20%). (Mintel)
Wine is a favorite discussion topic on Yelp, a vibrant millennial community. A quick review of the listings for San Francisco reveals a beehive of millennial (and other) enthusiasts advising one another on the pros and cons of different wineries, wine stores, wine clubs, and restaurant wine lists. Here's an entry by sascha "just let me" b. from March 20, 2009:
Berna, I do one of the K&L clubs (champagne) as well as the monthly club with Plumpjack. I enjoy them both for the fun of having new and interesting wines selected for me that I wouldn't necessarily seek out (or find) on my own. I think that K&L has some good buyers --- which is the key to a good club --- and PJs has a great buyer as well. Do I always like every wine? No. Am I always satisfied? Pretty much. The value is there, and if you can budget the guaranteed $40-$50 a month, it's a lot of fun, and will expand your wine horizons no matter what club you go with.

I also do some winery clubs, but that is a different value proposition: you're only getting one winery's output, and you better make fer dam sure that you know and like the winemaker's style and vision.
The headline for retailers trying to engage Millennials – make it real and create opportunities for Millennials to study up on your category, and to share their knowledge. Help them show they're in the know!

For food and drink marketers wanting a more intimate understanding of millennials, check out Brand Amplitude's upcoming proprietary study of millennial trendsetters, food and wine.

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