Millennials (adults 20 to 34) represent a massive consumer audience with growing economic might. They are 74 million strong, accounting for 25% of the U.S. population and representing $170 billion in spending power. They grew up in a time when there has always been an internet, so their on-demand access to information and social networking has formed who they are as human beings and consumers. They represent the future of our industry… a world where marketing is a two-way ongoing dialog and the consumer has equal weight in the equation.
Because of their unique upbringing, they represent unique challenges to marketers. They’re not as easily swayed by traditional marketing techniques, are less materialistic and are much more media savvy than the over-35 crowd, especially when it comes to social media platforms and mobile technology. As a result of their influential shopping habits, media consumption and growing purchasing power, millennials are changing the way that all people shop and the way that retailers think about marketing, media and merchandising.
Despite all of this attention, millennials have been largely ignored within the home improvement category because they index comparatively low for home ownership and discretionary income. At HMG, we think that is about to change. The time to pay attention to millennials is now.
Here are the top 3 reasons:
- Millennials represent a huge and untapped audience that is growing older and more economically stable. The belief that all millennials are broke and live in their parents’ basements is a stereotype that is becoming more of a fading memory. This generation is growing up, getting educations and decent-paying jobs. In the next decade, 80% of them will be parents. And parenthood is usually followed by home ownership. On top of that, studies show that millennials are more likely to buy a fixer-upper than any other demographic group. And we all know what fixer-uppers need.
“In 10 years, 80% of all millennials will be parents.”
- Millennials are brand loyal. If you do your homework and connect with them on a personal level, this is a group that will adopt your brand and go to great lengths to support you. The millennial consumer feels empowered. They believe that they have the capacity to help your brand succeed or fail. And with the advent of social media, they do. As a savvy marketer, you have the opportunity to earn their trust and loyalty before your competitors do. If you are able to engage them in a mutually beneficial relationship and maintain that over time, you may earn a lifelong customer that will pay dividends.
- There are signs that millennials are finally ready to become homeowners. In February, Zillow reported skyrocketing apartment rents across the nation, which many economists believe will drive millennials into the housing market. Other factors that may turn tenants into title-holders include:
It’s getting easier to qualify for a mortgage again. Many banks are now offering loans with only a 3% down payment, making it easier for first-time buyers to own homes.
Home prices are settling down. The average home price has increased 25% in the past 3 years, but the pace of growth is slowing, according to economists.
The mortgage rates increase will be minimal. After reaching exceptionally low levels in recent years, mortgage rates may creep up slightly in the next year, but will remain historically low.
Any way you look at it, millennials are poised to impact the bottom line of every home improvement brand in the near future. In the short term, earning the business of this group presents an opportunity for incremental growth. In the long run, they are necessary for survival.
Heinzeroth has been developing marketing and merchandising strategies for targeting DIY and Pro audiences within the home improvement channel for more than 20 years. To discuss how we can help your brand succeed in the evolving marketplace, give us a call today, or click here to arrange for a free consultation.