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Missing the Mark With Millennials

A look at the Millennials, or those under age 25, who wield more influence on family spending decisions than the two prior generations.

NEW YORK — It’s a big target — but that hasn’t made it an easy one for fashion marketers to hit.

This story first appeared in the February 19, 2003 issue of WWD.  Subscribe Today.

The Millennials, or those ages 25 and under, are 71 million strong, taking on more responsibility and wielding a greater influence on family spending decisions than the two previous generations, and are more worldly than their predecessors were at the same age.

The Millennials also have discretionary money to burn like no group before them. They’ve been growing up amid the greatest affluence America has known, when products have become more affordable than ever, and with parents who have showered many of them with hefty allowances and big-ticket gifts, from cars to computers and pricy vacations.

Indeed, teens and collegians are among the country’s most aspirational consumers.

Some generation experts go so far as to describe today’s teens as mini-adults. But if it sounds like a favorable scenario for the fashion business, think again.

The attitudes and lifestyles of teens and young adults, combined with their propensity to spend heavily on cars, electronics, entertainment and eating out, shorter-trend lifecycles due to the rise of new media and technologies, and the proliferation of marketing messages, have transformed the group into people:

Spending less of their wallet on apparel.

Buying a growing share of their clothing based on need rather than impulse.

Placing a greater priority on price than on brands.

Rejecting most marketing campaigns, which they perceive as being irrelevant, at best, or phoney.

The latter marks a major difference between the Millennials and the one generation still larger than them, the Baby Boomers, who have enjoyed and responded to advertising from fashion brands, among others, since they were teens. It’s a disparity most fashion marketers have yet to comprehend, observers noted.

“When a generation, such as the Millennials, is about to break into adulthood, they have a different frame of reference than the pop-culture makers, who are a generation before them — in this case Gen X,” observed generation expert William Strauss, who, along with historian Neil Howe, has written “Millennials Go to College” (LifeCourse Associates, 2003) and “Millennials Rising” (Vintage, 2000).

“Thirty-three year olds tend not to know what’s going on among 17-year-olds,” Strauss said. “What is funny or ironic for one generation will be wallpaper for the next. Marketers and the media have been slow to pick up on this.”

For examples, Strauss said, one need look no further than Pepsi Twist’s Super Bowl spot, which featured the Osbournes and the Osmonds, or Fox TV series “Boston Public.” Though both are aimed at teens, he contended teens either don’t know of, or relate to, the Osmonds, and find “Boston Public” irrelevant, as it’s an “exaggeration of late Eighties-early Nineties high school culture.”

Against this backdrop of marketing and media disconnect, fashion itself has been falling in the galaxy of teens’ and collegians’ priorities, marketing sources said. To wit: The share of girls ages 13-17 who listed apparel as “the newest thing they are buying or doing” in 2002 plunged 46 percent from its share just five years earlier — clearly a wake-up call for the industry, according to The Zandl Group, a consumer researcher that specializes in teens and young adults. Last year, 22 percent of girls ages 13-17 put apparel in the newest-thing-bought category, down sharply from 41 percent in 1998.

In contrast, categories gaining share as the newest thing bought by that age group, in the past five years, were cars, whose slice more than doubled, to 10 percent in 2002 from 4 percent in 1998; electronics, rising to 12 percent from 6 percent, and entertainment, also doubling, to 10 percent from 5 percent, The Zandl Group found.

The picture isn’t an entirely grim one for the apparel business, however. Between January and November 2002, people ages 24 and under — most of the Millennials — spent $46.2 billion on apparel. That amounted to more than twice the $21.1 billion expended by those ages 25-38 — the 37 million members of Gen X, plus fringes of the Boomers and Millennials — and 18 percent more than the $38 billion worth bought by people ages 39-55, or almost all 83 million Boomers, who are now ages 38 to 57, according to Port Washington-based market researcher NPDFashionworld. This means the Millennials accounted for 33.3 percent of the $139 billion in apparel bought between January and November 2002, while Boomers purchased a 27.3 percent share and Xers snapped up 15.2 percent.

Kenneth Cole, Banana Republic, Juicy Couture, Urban Outfitters, Old Navy, Gap, Pacific Sunwear and Hot Topic were cited by marketing consultants and researchers as offering above-average appeal to youths and young adults.

Nonetheless, recent consumer research shows teens and young adults are left cold by numerous fashion brands and most related marketing, and are less compelled to spend on apparel than many other things — a landscape fashion businesses will have to work hard to reshape if they expect to create a more amenable climate.

“With teen girls spending more money on their cars, computer upgrades, and cell phones, they have less money left for apparel,” noted Zandl Group president Irma Zandl. Adding to the problem, she said, is the shrinking number of apparel sales jobs held by teenage girls — slashing their access to discounts and curtailing the time they spend in the stores — and the increasing portion of teenage girls who are overweight, now 25 percent, who are hard pressed to find clothes that fit well, let alone styles that are appealing.

Then there are lifestyle changes. Today’s teens and collegians are spending less time than their predecessors vegging out in front of the TV, listening to music, talking on the phone with friends, or shopping. They are a more active bunch, pursuing a raft of interests, from extreme sports to travel. Participation is on the rise in high school theater productions, bands, and orchestras — the kinds of things, said Marshal Cohen, co-president of market researcher NPDFashionworld, that “you couldn’t get 10 kids to want to do, 10 years ago.”

Meanwhile, the 18- to 24-year-old crowd is spending unprecedented amounts traveling ($5 billion in 2002), and attending movies ($790 million), music concerts ($390 million), amusement parks ($318 million) and professional sporting events ($272 million), according to a fall 2002 survey of college students conducted by Harris Interactive for 360 Youth, the media and marketing arm of Alloy Inc.

“Apparel clearly has shifted in importance for teens,” said Cohen. In 1989, 73 percent of teens ages 13-18 said style was very important to their image, Cohen recounted. Last November, 51 percent said so. Style still packs a punch, though, when teens actually purchase apparel. In fact, NPD’s November research showed it’s the top trigger of those purchases, followed by brand and value. But the challenge is clear. “How do you market to someone who doesn’t want to look like everyone else and wants to do their own thing?” Cohen queried. “The whole [Millennial] generation wants to fly incognito. Fashion marketers are concerned because this is a group with enormous spending power.”

The continued use of the name Generation Y itself is evidence of the irrelevance of many marketers’ efforts, observers pointed out.

Young adults and teens view themselves as individualistic — even as they possess a group orientation and team spirit less evident in the two preceding generations — and they resoundingly don’t like to think of themselves as related to Gen X. Thus, generation experts said, teens and young adults prefer the increasingly common moniker Millennial generation, or Net gen — the Internet is integral in millennial culture — or Next gen.

As market researcher Zandl sees it, fashion firms have little choice but to become more responsive to such generational idiosyncracies. “There’s going to be a death knell for fashion if those companies don’t wake up to the broader lifestyle changes affecting today’s teens and young adults,” she contended.

Editor’s Note: This is the first in a two-part series about marketing to the Millennials. Part two will examine how best to market fashion to the group and the current mistakes that need to be corrected.