Millennials Not as Brand-Conscious as You Think, Study Finds

Want to bust a stereotype? Just track the shopping habits of the 25- to 34-year-old age group.

You’re more likely to find them in the aisles at Wal-Mart or Lowe’s than at H&M or Sephora, according to a new study published by Barkley, a Kansas City, Mo.-based advertising and marketing agency.

The agency dug into consumer records and attitude surveys covering about 10.8 million Americans in the older half of the millennial generation, and found some things that ran counter to the oft-stated impressions of millennials as brand- and trend-conscious consumers.

Some of them are. But something causes a shopping sea change: parenthood.

Jeff Fromm, Barkley’s executive vice president, said the data reveal “a new American pragmatism.”

There’s nothing like a baby to turn a shopper into a pragmatist.

The agency sees its “Marketing to Millennials” report as a marketing guide for companies that don’t want their messages to miss the target consumer – who’s likely conscious about health, the environment, social causes, saving money and raising children with strong family values.

“Let’s remind ourselves that the oldest millennials became young adults around 1999,” said David Gutting, strategy director at Barkley, in introducing the report. “They have experienced the dot-com bust, Sept. 11, and large banking and housing crises. Further, the Iraq and Afghanistan wars were largely fought by millennials.”

Those factors, Gutting said, have made millennial parents far more pragmatic than is generally assumed. Again, the key word is “parents.”

Demographers usually define the 78 million-strong millennial generation as those born between 1978 and 1995. About 31 million of them have become parents. About 9,000 millennial women give birth every day. Barkley’s research also indicates that within the next 10 years, 80 percent of millennials will be raising children.

The Barkley research centered on the older millennials, the 25-and-older group, who are most likely to be raising children. After pulling from nine different databases and drawing on other research from organizations such as Pew and McKinsey, the Barkley team and Vision Critical, a survey company, followed up with detailed surveys of 600 women and 400 men, all millennial parents.

About 7 percent retained what researchers called the “image first” stereotype, prizing trendy brand names and being early adopters of new technology. But by far, the majority view technology as just a tool to make lives easier.

“Gadget envy is dying,” Fromm said, nonetheless noting that millennials are huge users of technology to share information.

“Peer affirmation” is important. In other words, the report indicates, if young parents find a great deal on diapers, they’re likely to quickly and widely use digital tools to share the sale news with friends.

Time constraints also figure in shopping habits, said Christina Gepner, a 30-year-old wife and mother, who has a 22-month-old and a 3-month old and works full time.

“I do a lot of online shopping, and I definitely have need for items that I didn’t need before,” the Olathe, Kan., resident said. “My brand preferences haven’t changed as much, but I tend to use stores with easy return policies.”

She’s also paying more attention to organic food choices, and using Amazon.com and Diapers.com a lot.

“I shop convenience,” Gepner said.

Another big factor influencing millennials’ buying habits is that many are under financial pressure. The research found that these millennials generally hold less wealth at this point in their lives than did the boomers and Gen Xers at comparable periods. Many have large student debt, and about 4 out of 10 haven’t found jobs that their education prepared them to hold.

The research metadata showed that Wal-Mart is the practical, go-to shopping choice for millennial parents. It also showed that parenthood changes many brand preferences.

Nike remains the top favorite brand, pre- and post-parenthood, but other pre-kid favorites – such as Sony, Gap, Apple and Levi’s – sink in preference in favor of Target, Old Navy and, logically, Carter’s.

Gutting said some millennials will buy Coach handbags, for example, prizing the label and accepting the high cost. But far more of the generation will pay attention to the price tag first.

Beyond the 7 percent of “image first” millennial parents, who care about brand names and how they look, the report categorized the population in these groups:

• 26 percent “family first” – predominantly white, traditional, in married families, well-educated and using social networks to connect with family. They buy things that make their family lives easier.
• 17 percent “under stress” – ethnically diverse, high rates of unemployment, comparatively low use of social networks. They need bigger paychecks to become bigger consumers.
• 26 percent “style and substance” – ethnically diverse, educated, highest in income, global views, tend to traditional families but success-driven. They care about trends, but purchases can depend on price.
• 24 percent “against the grain” – hard workers but not much economic success, heavily Hispanic, use technology for practical functions. They tend to have more kids than other groups.

The study did reinforce some millennial stereotypes: Many are more interested in health, exercise and good nutrition than previous generations. Many are more interested in “cause marketing,” supporting brands that go beyond profit to support social causes. Many also will be fickle in brand preference.

Stores and products will need to continually reinvent themselves to gain or keep loyalty as the values and priorities of young parents evolve, the report said.

“The takeaway for marketers is that millennials aren’t a monolith,” Gutting said. “And kids vs. pre-kids makes a big difference.”