Retail Observer

RETAILOBSERVER.COM AUGUST 2015 42 Elly Valas Retail Views I recently got an email from a retailer expressing concern about the upcoming Millennial consumer. In his message, he expressed angst about this up and coming generation's lack-luster interest in owning things—like homes and cars. His concern is not unwarranted, but there's no need to panic. The group is generally defined as those born between 1980 and 2000 and at 80 million strong, represents the largest portion of the U. S. population. They have less wealth and more debt— mostly from student loans and a sluggish economy—than other generations at the same age. But according to the Pew Research Center, as of March there are more Millennials in the workforce than Gen Xers or Baby Boomers. The consulting firm Accenture estimates that Millennials will spend $1.4 trillion annually by 2020, and they are expected to inherit about $30 billion in the coming years. I've been closely watching the evolution of Millenials in my own small focus group of my six nieces and nephews and their three spouses—all 25 – 36. I agree with an article in the June 19th New York Times that suggests that just like previous generations, these young adults and their buying habits will evolve. "Why you're seeing the fervor now is just where Millennials are headed — out from the younger part of their life stage to where they're in their first profession, they're getting married, having children and influencing more spending," said Christine Barton, a senior partner and managing director at the Boston Consulting Group. Although three of my Millennials still live in apartments with roommates, the others are more permanent. Three are newly- married and two just had babies—one now owns a home (she's 26) with a kitchen full of appliances. She just bought a new dishwasher. Another couple is desperately looking for a home they can afford—in the meantime, they just bought a new washer for their rental house. Four of my clan had cars they had owned since college and one, living in New York, never had one. Fast forward to this year and with two new babies, one got her father-in-law's three year old SUV, and one bought a two-year-old BMW (for safety, of course!). The one from New York moved to Nashville for a new job and got my four-year-old car. No more beaters for these kids. As the Times article suggested, Millennials may really just mirror what all consumers want. Ravi Dhar, the director of the Center for Customer Insights at the Yale School of Management, said the attributes that businesses were ascribing to Millennials — including a dependence on technology — applied to the population as a whole. "How people shop and consume information, that's really changing beyond the Millennials," he said. This month, the market research firm Forrester issued a report titled: "The Kids Are Overrated: Don't Worry About the Millennials." It noted that consumers in their 20s were overwhelmed with educational debt and that those baby boomers were more affluent and bigger spenders, unhip though they may be. "While some businesses must target Millennials because of the nature of their products, most do not need to," the report said. I never advocate taking a "business as usual" approach and we will certainly have to meet these digitally native, tech savvy buyers on their turf—the web, social media, and through consumer and product reviews. But don't worry about the Millennials not buying—just like the rest of us, they'll get jobs, settle down, get married, have kids, and buy houses. And eventually, they'll fill those homes with appliances, electronics and furniture. Their old college sofas will appear on their lawns with "free" signs for the next generation to use until they, too, grow up. THE MILLENNIAL MYTH RO Elly Valas is the Marketing Services Director for Nationwide Marketing Group. She can be reached at elly@ellyvalas.com or at 303-316-7569. Visit her website at www.ellyvalas.com.

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