How do you sell to a growing base of millennial consumers who value experiences over possessions? That’s the challenge manufacturers and marketers of products from personal care to personal computers now are facing in today’s “Experience Economy.” At 80 million strong, millennials represent one quarter of the nation’s population and starting this year, they will spend more than $200 billion annually, estimates Ad Age.
To set the record straight, the concept of an “Experience Economy” is not new. Back in 1998, B. Joseph Pine II and James H. Gilmore identified experiences as the fourth in a chain of distinct economic offerings that evolved over time from agrarian to industrial to service. They asserted that “…leading-edge companies —whether they sell to consumers or businesses — will find that the next competitive battleground lies in staging experiences.”
And so was born the notion that in order to transform a brand proposition and capture consumer’s hearts and minds, businesses must create memorable events and experiences. Over the past nearly 20 years since Pine and Gilmore advanced their theory, some companies have stepped up to the table. Starbucks, for example, is a brand often cited for providing their customers with not just lattes, but a special emotional experience
One thing is clear, for companies late to the Experience Economy, things will need to change. Among millennials, experience trumps ownership. And technology is making the case for experiences even more personal and powerful. The World Economic Forum says, “This vision of companies selling experiences is now becoming a reality. The breakthrough has been made possible by the explosion in connectivity, the advances in analytics and artificial intelligence, and the growing profusion of smart devices and sensors that we have witnessed over the past few years.”
Millennials impact technology development
In seeking a more personal experience, millennials have shifted their focus away from mass produced products. Not only do they want a great and customized user experience; they want one they can tell others about on social media where they may have hundreds, even thousands, of friends. And since product choice reinforces identity; millennials want devices that reflect their styles and values as well as needs.
The demand on the part of millennials for brand experiences is driving technology development. The most “connected generation,” who it is assumed can find their way around any device, has made it clear that they have no time to figure things out. Millennials want a straightforward, seamless and self-guided experience regardless of the device, website or app. If the experience doesn’t meet their needs or expectations; they will seek another.
When it comes to tech purchases, sleek, flexible and powerful are attributes that resonate with this generation. As more and more millennials, and the rest of the population for that matter, work remotely and from a range of locations throughout a day or week, they also seek more convenience. Smaller, lighter weight yet still powerful devices meet these criteria.
Purchase power extends to the workplace
Millennials also expect employers to provide the latest technology, whether for collaboration, to both create and consume content or to access the apps they need to get work done. In “Millennials at Work, Reshaping the Workforce,” PwC reports that 59 percent of the over 4300 millennials surveyed said that an employer’s provision of state-of-the art technology was important to them when considering a job.
Once inside organizations, millennials have considerable purchasing clout. A survey of 262 businesses by the Arketi Group, a high tech B2B PR and digital marketing agency, found more than half of millennials describe themselves as decision-makers for technology purchases within their organization. One-third of millennials report having the budget and/or sign-off on enterprise technology purchases of $10,000 and up.
Millennials seek shopping experiences
Millennials not only seek experiences in what they buy; they have raised the bar on the purchasing process. In its research on “Who are the Millennial Shoppers and What Do They Really Want,” Accenture found that 68 percent of all millennials demand an integrated, seamless experience regardless of the channel. The transition from smartphone to personal computer to physical store needs to be effortless as millennials seek the best products and services. (Research from TimeTrade found that despite the popularity of online shopping, consumers continue to find retail stores valuable because the in-store experience helps them validate purchasing decisions.) To satisfy this multi or “omni-channel” experience, brands need to align in-store and online experiences.
Some other findings from the Accenture survey that demonstrate how the millennial demographic shops:
- Online and mobile channels are important to millennials to find the best products and services. When it comes to mobile, marketers need to be sure that the experience is optimized for smaller screens. That means it needs to be fast loading and should have a clear call to action.
- Reviews, feedback and product ratings are important to confirm that both the product and vendor provide quality value and service.
- Millennials require a demand-centric shopping experience tailored to their needs and wants as a valued customer.
- Many seek personalized, targeted promotions and discounts in return for their loyalty.
- To reach millennials on social media, brands or products need to a routine part of the conversations regarding product information, updates and special offers.
- Above all, marketers and manufacturers need to be transparent. Millennials don’t want a sales pitch and relationships count for a lot. Same goes with facts. With mobile device in hand potential customers can quickly check facts if they doubt something they hear.
Millennials are not only changing what they buy but how they buy. As a result, successful brands need to keep delivering quality products packaged in memorable experiences.