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What Makes Millennials TICK
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What Makes Millennials Tick?
The answer, of course, is you.
For years, Baby Boomers were the gravy to the home furnishings retailer’s train. Like clockwork, they’d waltz through your front door every seven years or so—sooner if that big promotion came through or they finally bought that lake house—looking for a sofa or bedroom group.
Only now that gravy train is slowing down. Baby Boomers are downsizing. Those 3,500-square-foot homes are now (gasp!)1,800-square-foot townhomes. Even worse, Boomers have grown accustomed to that 16-year-old recliner so there’s no sense in changing things now.
Millennials—consumers born between 1980 and 2000—are the demographic every home furnishings store is chasing and with good reason: With almost 80 million of them, they’re the nation’s largest population segment. That $170 billion in annual purchasing power they wield isn’t too shabby either.
And they’re only getting bigger. One Accenture study believes Millennials will come into their own by 2020 when their spending in the United States will grow to $1.4 trillion— that’s trillion with a T—annually and represent almost a third of total retail sales.
One more thing: Millennials want furniture. They spent more than $27 billion on
it last year, according to Furniture Today’s Consumer Buying Trends, compared to $11 billion in 2012. They account for 37 percent of all furniture and bedding purchases. The back-of-napkin math doesn’t lie: That’s a 142-percent increase over two years. Those same two years saw Baby Boomers’ furniture spending drop 17 percent.
For years, Baby Boomers were the gravy to the home furnishings retailer’s train. Like clockwork, they’d waltz through your front door every seven years or so—sooner if that big promotion came through or they finally bought that lake house—looking for a sofa or bedroom group.
Only now that gravy train is slowing down. Baby Boomers are downsizing. Those 3,500-square-foot homes are now (gasp!)1,800-square-foot townhomes. Even worse, Boomers have grown accustomed to that 16-year-old recliner so there’s no sense in changing things now.
Millennials—consumers born between 1980 and 2000—are the demographic every home furnishings store is chasing and with good reason: With almost 80 million of them, they’re the nation’s largest population segment. That $170 billion in annual purchasing power they wield isn’t too shabby either.
And they’re only getting bigger. One Accenture study believes Millennials will come into their own by 2020 when their spending in the United States will grow to $1.4 trillion— that’s trillion with a T—annually and represent almost a third of total retail sales.
One more thing: Millennials want furniture. They spent more than $27 billion on
it last year, according to Furniture Today’s Consumer Buying Trends, compared to $11 billion in 2012. They account for 37 percent of all furniture and bedding purchases. The back-of-napkin math doesn’t lie: That’s a 142-percent increase over two years. Those same two years saw Baby Boomers’ furniture spending drop 17 percent.
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MILLENNIAL MYTH: We Don’t Buy Furniture
One of the most accepted truisms about we Millennials—easily the most overexamined generation in history—is that we don’t want our parents lives of a house and furniture. That we value our free time and don’t want to be burdened with possessions. Except that furniture sales to Millennials has more than doubled—from $11 billion in 2012 to $22 billion last year according to a recent Furniture Today Buying Trends report. We may not like mom and dad’s 12-piece dinning room group, but we have our own tastes and desires for home furnishings. And we’re willing to pay for it. |
Marisa Peacock knows the importance of retailers hooking up with Millennials and has spent the past several years playing matchmaker.
“All these Millennials represent a huge opportunity for home furnishings retailers because they’re starting families and beginning to settle into homes just like their boomer parents,” says Peacock, whose company, The Strategic Peacock, helps small businesses target Millennials and their disposable income.
Her job is not as easy as it may sound.
That’s because Millennials don’t walk, talk and buy like Generation Xers or their Boomer parents. They’ve grown up in a world where newspapers, magazines and print advertising are heading the way of Morse Code. They get much of their entertainment and news from a laptop or tablet. They’ve seen what the Great Recession did to their parents’ retirement plans and are wondering if they’ll ever pay off those monstrous college loans. In other words, the tried-and-true ways of connecting with Boomers the past 40 years won’t work with Millennials.
“You have to understand Millennials before you can even begin to connect with them,” says Peacock. “Once you know where they’re coming from, the world they’ve grown up in, you can better engage with them.”
“All these Millennials represent a huge opportunity for home furnishings retailers because they’re starting families and beginning to settle into homes just like their boomer parents,” says Peacock, whose company, The Strategic Peacock, helps small businesses target Millennials and their disposable income.
Her job is not as easy as it may sound.
That’s because Millennials don’t walk, talk and buy like Generation Xers or their Boomer parents. They’ve grown up in a world where newspapers, magazines and print advertising are heading the way of Morse Code. They get much of their entertainment and news from a laptop or tablet. They’ve seen what the Great Recession did to their parents’ retirement plans and are wondering if they’ll ever pay off those monstrous college loans. In other words, the tried-and-true ways of connecting with Boomers the past 40 years won’t work with Millennials.
“You have to understand Millennials before you can even begin to connect with them,” says Peacock. “Once you know where they’re coming from, the world they’ve grown up in, you can better engage with them.”
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Home furnishings retailers willing to put in the effort to figure out the habits of the elusive Millennial are starting to reap the rewards. In Texas, Sam’s Furnitureconcentrated heavily on Internet advertising, hoping to capture Millennials who are glued to their tablets and smartphones. The company went to great lengths and dollars to maximize its search engine optimization. It even hired another employee to answer chat questions from its website. The result? Within a three-year period Sam’s Furniture nearly doubled its revenue. |
Live Chat Feature On Sam's Furniture
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In Ohio, Coconis Furnituretook a second look at the way it was spending money on its advertising. For years the store stuck to the traditional mediums of print, radio, television and direct mail. Last year the company dedicated about 15 percent of its budget to digital advertising and email marketing campaigns. Traffic to the store’s website has exploded. Bo Coconis, a buyer and merchandiser who pushed hard for the campaign, is so pleased with the results he’s pushing his father to buy tablets for store employees to expedite checkouts and is thinking of hiring a full-time employee to manage the company’s social media and answer questions at the store’s online chat.
“It’s all about finding out where Millennials are in their lives and meeting them
there,” says Coconis, who, at 30 years old, knows a thing or two about his generation. “You can connect with them once you know what makes them tick.”
And therein lies the $64,000 question, or in the case of the Millennials’ projected furniture buying power this year, the $35 billion, question: What makes Millennials tick?
For starters, no offense Boomers, but they don’t really care for your advice. Older Americans tend to trust the counsel of friends and family members when making a big purchase such as furniture. Most Millennials, on the other hand, don’t want their parents’ or peers’ help. Think back to the Great Recession, soaring unemployment and seemingly daily bailouts. Can you blame them?
According to a Harvard Business Review Study, 51 percent of Millennials say they not only trust but also prefer product reviews from people they don’t know.
“It’s all about finding out where Millennials are in their lives and meeting them
there,” says Coconis, who, at 30 years old, knows a thing or two about his generation. “You can connect with them once you know what makes them tick.”
And therein lies the $64,000 question, or in the case of the Millennials’ projected furniture buying power this year, the $35 billion, question: What makes Millennials tick?
For starters, no offense Boomers, but they don’t really care for your advice. Older Americans tend to trust the counsel of friends and family members when making a big purchase such as furniture. Most Millennials, on the other hand, don’t want their parents’ or peers’ help. Think back to the Great Recession, soaring unemployment and seemingly daily bailouts. Can you blame them?
According to a Harvard Business Review Study, 51 percent of Millennials say they not only trust but also prefer product reviews from people they don’t know.
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Buying Local
On a recent Saturday in Charlotte, N.C., Wendy Davis decided the wobbly legs on the kitchen dinette set she inherited from her grandmother outweighed the sentimental memories of the piece. She sold it on CraigsList the night before and had a list of four stores and one bigbox (Costco) she was going to shop—stores all coming from reviews she found online at Yelp, a website where people can review and recommend restaurants, shops, nightlife and more. “I never even thought about asking friends,” said Davis, a 31-year-old paralegal, who lives in Rock Hill, S.C. “It just seemed easier to go online and look on my own.” |
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Davis ended up buying a new table and four chairs at City Supply Co. in Charlotte because they had exactly what she was looking for and because of the glowing reviews she read online from complete strangers.
Stop right there.
We know what you’re thinking: A Millennial actually put down her laptop and smartphone long enough to enter a brick-and-mortar store?
Stop right there.
We know what you’re thinking: A Millennial actually put down her laptop and smartphone long enough to enter a brick-and-mortar store?
While Millennials have earned a reputation for viewing and engaging the world through a digital lens, they still venture outdoors. In fact, members of the digital generation prefer visiting stores to shopping online. “I need to see the chairs, the grain of the table,” says Davis. “You can’t tell something’s quality from a photo on the Internet.”
For years Bill Napier, a strategic consultant to several companies in the home furnishings industry has preached that retailers need to see the Internet as their partner rather than their enemy.
“Eighty percent of consumers including Millennials want to buy local,” he says. “Sure they’re going to do their homework online, but if you’re competitive on price and can offer a good return policy, Millennials are as smart as any other generation. They’re going to want to do business in your store.”
Davis said she did just that in shopping for her kitchen table and chairs, spending about four hours researching online over two weeks before heading out.
For years Bill Napier, a strategic consultant to several companies in the home furnishings industry has preached that retailers need to see the Internet as their partner rather than their enemy.
“Eighty percent of consumers including Millennials want to buy local,” he says. “Sure they’re going to do their homework online, but if you’re competitive on price and can offer a good return policy, Millennials are as smart as any other generation. They’re going to want to do business in your store.”
Davis said she did just that in shopping for her kitchen table and chairs, spending about four hours researching online over two weeks before heading out.
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That dependency on online reviews by Millennials is one reason Napier and others push retailers to come up with a system in which customers leave feedback online be it at Yelp or your store’s Facebook page or Twitter.
Napier suggests a follow-up email a week or two after the purchase reminding the customer that if they were pleased with the purchase they could go online and leave a positive review. Of course, don’t forget to include a link to the review sites you want to show up in. “It’s not enough to provide a good product and service and leave it at that,” he says. “Retailers need to be more proactive and prod the customer into getting their name and service out to others.” It’s also not enough for retailers to have a website and expect Millennials to show up at their store, printouts in hand. Peacock and others say Millennials are looking for a smooth transition from a website to a smartphone to your brick-and-mortar store without any hiccups or surprises. |
MILLENNIAL MYTH: We Want to Live in Cities, Not Suburbs
We prefer the bright lights of the big city, where they can walk or take the bus, subway, or Uber virtually anywhere they need to go. True. Sort of. The number of us living in midsize cities was 5 percent higher compared with 30 years prior. But not so fast. U.S. Census data from 2014, the latest available, shows that people in their 20s moving out of cities and into suburbs far outnumber those coming the other way. In the long run, the suburbs seem the overwhelming choice for us to settle down. It’s true that a smaller percentage of 20-somethings are moving to the suburbs compared with generations ago, but much of the reason why this is so is because we’re getting married and having children later in life. |
It’s not that Millennials are spoiled or possess a sense of entitlement, says Peacock, it’s the world they grew up in. Peacock likes to use a music analogy to compare Millennials to their parents. (Warning: the following paragraph might make you feel old. Very old).
“Baby Boomers grew up listening to their music on record players or eight-track tapes and then cassette tapes, and then they switched to CDs and later to iPods,” says Peacock. “Millennials don’t know anything but digital music. So when they walk into a store after viewing something they like on a website they don’t understand why the retailer is handing them a printed piece of paper with the sofa on it. They want to see it on a screen just like they did back at home or in the coffee shop. They leave wondering, ‘Why doesn’t the store have what the website has?’ ”
Evan Faller, business development officer for Furniture Wizard, believes one the biggest mistakes retailers can make with Millennials is not ensuring a seamless transition from your website to your store.
“If you put your website together and brand it as your store with 50,000 products available and then your store doesn’t match that experience, right off the bat you’ve got a huge disconnect with the Millennial,” he says. “And let’s be honest here, that statement probably goes for any consumer, but it applies even more to the Millennial consumer who’s used to having things a certain, consistent way.”
“Baby Boomers grew up listening to their music on record players or eight-track tapes and then cassette tapes, and then they switched to CDs and later to iPods,” says Peacock. “Millennials don’t know anything but digital music. So when they walk into a store after viewing something they like on a website they don’t understand why the retailer is handing them a printed piece of paper with the sofa on it. They want to see it on a screen just like they did back at home or in the coffee shop. They leave wondering, ‘Why doesn’t the store have what the website has?’ ”
Evan Faller, business development officer for Furniture Wizard, believes one the biggest mistakes retailers can make with Millennials is not ensuring a seamless transition from your website to your store.
“If you put your website together and brand it as your store with 50,000 products available and then your store doesn’t match that experience, right off the bat you’ve got a huge disconnect with the Millennial,” he says. “And let’s be honest here, that statement probably goes for any consumer, but it applies even more to the Millennial consumer who’s used to having things a certain, consistent way.”
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Just as home furnishings retailers spent years catering to Baby Boomers through their mediums of choice—print, television, radio and direct mail—it’s time to cater to Millennials, says Napier. “They grew up with video games, the Internet and now smartphones,” he says. “They’re focused on technology and have perfected using it to find everything; Restaurants, clothes, furniture decorating ideas and more. And they take the use of technology further; they read reviews and are highly influenced by them on social media and consumer websites.”
No other retailer knows this better than NAHFA member Seth Weisblatt whose store, Sam’s Furniture in Fort Worth, Texas, has been connecting with Millennials and Generation |
MILLENNIAL MYTH: We Prefer Uber Over Owning a Car
Cars are just not cool. They’re bad for the environment. They’re too expensive. And we Millennials live in a world where socializing online is just as meaningful as socializing in person. Sorry, not buying it. Neither is the car industry, which claims correctly that the economy rather than interest is why fewer Millennials are buying cars. The numbers show that more than three-quarters of us plan on buying or leasing a car over the next five years, and 64 percent of us say we absolutely “love” our cars. |
X consumers for years through a committed online presence. How committed? Half of Weisblatt’s advertising budget is invested in search optimizing on the Internet, live chats on his store’s website and targeted email campaigns.
Weisblatt says traditional advertising is lost on Millennials. “They’re living lives that are completely different to Boomers and even (Generation X),” he says. “You still need to advertise on all your traditional channels, but if you’re not advertising online, you’re not relevant to them because they’re not going to know anything about you. To them you don’t even exist until you’re online.”
Coconis agrees. “I don’t watch TV, I don’t get a newspaper and I rarely listen to the radio,” he says. “The best way to get hold of me is through email. Again, it all comes down to reaching them where they are in their life.”
Peacock takes that theory one step further, arguing that instead of waiting for Millennials to fall into traditional consumption patterns (“There’s nothing traditional about Millennials,” she says), home furnishings retailers should take the time to understand the complex factors that compel Millennials to spend.
Marketing strategies, she says, should be geared to where Millennials values lie, instead of where the status quo (read: Boomers) expects them to be.
A good example is the popular (and true) narrative that Millennials are more empathetic to our environment than Boomers or Gen Xers. “That needs to be part of your marketing strategy,” says Peacock. “Millennials who are looking to buy a coffee table might be reluctant if their afraid that it will be obsolete or thrown out when they decide to upgrade if they get married or have a family. It’s (the retailer’s) job to show that that product can be recycled or already was recycled in some fashion. Retailers need to ask themselves if they’re pursuing the wants and needs, sure. But at the same time are they pursuing the Millennial’s values?”
Weisblatt offers one more piece of advice about pursuing Millennials: A year or two from now, prepare to throw everything you’ve just read out the window. “Technology is such that everything changes so fast and Millennials are quick to adapt. What you implement today might be obsolete a year from now so be ready to change.” But when it comes to Millennials, they’re worth the pursuit.
Weisblatt says traditional advertising is lost on Millennials. “They’re living lives that are completely different to Boomers and even (Generation X),” he says. “You still need to advertise on all your traditional channels, but if you’re not advertising online, you’re not relevant to them because they’re not going to know anything about you. To them you don’t even exist until you’re online.”
Coconis agrees. “I don’t watch TV, I don’t get a newspaper and I rarely listen to the radio,” he says. “The best way to get hold of me is through email. Again, it all comes down to reaching them where they are in their life.”
Peacock takes that theory one step further, arguing that instead of waiting for Millennials to fall into traditional consumption patterns (“There’s nothing traditional about Millennials,” she says), home furnishings retailers should take the time to understand the complex factors that compel Millennials to spend.
Marketing strategies, she says, should be geared to where Millennials values lie, instead of where the status quo (read: Boomers) expects them to be.
A good example is the popular (and true) narrative that Millennials are more empathetic to our environment than Boomers or Gen Xers. “That needs to be part of your marketing strategy,” says Peacock. “Millennials who are looking to buy a coffee table might be reluctant if their afraid that it will be obsolete or thrown out when they decide to upgrade if they get married or have a family. It’s (the retailer’s) job to show that that product can be recycled or already was recycled in some fashion. Retailers need to ask themselves if they’re pursuing the wants and needs, sure. But at the same time are they pursuing the Millennial’s values?”
Weisblatt offers one more piece of advice about pursuing Millennials: A year or two from now, prepare to throw everything you’ve just read out the window. “Technology is such that everything changes so fast and Millennials are quick to adapt. What you implement today might be obsolete a year from now so be ready to change.” But when it comes to Millennials, they’re worth the pursuit.
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MILLENNIAL MYTH: We Have a Different View of Work
As Millennials entered the workforce and became a more common presence in offices around the world, the assumption has been that young people supposedly care more about wearing jeans and having flexible work hours more so than did Gen X and Boomers. Young people also want to be more collaborative, demand more feedback, and are less motivated by money than older generations. An IBM study begs to differ. “We discovered that Millennials want many of the same things their older colleagues do,” researchers state. There may be different preferences on smaller issues—like, say, the importance of being able to dress casually on the job—but when it comes to overarching work goals achieved in the long run, Millennials are nearly identical to their more experienced colleagues: They want financial security and seniority just as much as Gen X and Baby Boomers, and all three generations want to work with a diverse group of people.” 
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