Submitted by Marshal Cohen, chief industry analyst, The NPD Group
Millennials (those aged 13- to 33-years-old) total 80 million in the U.S., according to the U.S. Census Bureau, and contribute $150 billion in sales per year.** They also seem to be the most sought after audience for retailers and brands. Millennials are the most elusive group of shoppers and the most challenging to keep pace with.
Licensed products complement the lifestyle of Millennial shoppers who tend to watch more sitcoms and reality TV shows than other generations.* Their viewing habits showcase their desire to be individuals and lead to opportunities for marketers to create unique products.
This is a generation, according to a poll by CivicScience, that is influenced by the Internet four times more, which makes understanding how a product or brand is consumed that much more important. CivicScience also reports that 58 percent of Millennials post online reviews of product they buy, and 50 percent of Millennials use a smartphone to research the product while shopping. Compare that to a total of 12 percent for all generations, and it is easy to see how brands can tap in to this group by providing content to share.
Millennials are three times more likely to research product before they buy.* Influencing this group to purchase a product is critical. Millennial's shopping conversion rate is 57 percent compared to Generation X, which is 66 percent; Boomers conversion rate is 69 percent; and seniors are 72 percent.** With Millennials having the lowest shopping conversion rate, it shows they are the most selective and most economically challenged.
|Millennials are harder to win over when they are shopping in stores: 57 percent convert to purchase.|
|Mass merchants captured 31 percent of the retail dollars spent by Millennials in the past year.|
While online has a greater share of Millennial shopper's spend–19 percent compared to the total market of 10 percent (average consumer spending for all categories)–the majority of the Millennials' dollars are spent in brick-and-mortar stores (81 percent).** Thirty-one percent of those retail dollars are spent in mass merchants. In order to sell across generations, there must be multiple messages and multiple touch points to reach the consumer.
Even though Millennials are the great opportunity of today, there is a bigger opportunity with the Boomer consumer. With greater discretionary spending, this generation has more buying power. Boomers will be living and working longer and spending more than prior generations.
Steeped in tradition selling licensed products to the younger generations, the world is a different place today. The licensing industry needs to look for growth within a broader audience.
**Source: The NPD Group, Inc./Shopping Activity Services/12 months ending April 2013