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How millennials are changing the economy, one ethical purchase at a time
Millennials represent the largest group of potential consumers in American history. But mere size doesnt tell the whole tale. Millennials behave differently, and their values and media savvy make them a hard nut to crack for marketers. - photo by Bob Lloyd
Samantha Okazaki bought her first pair of Toms shoes when she was in college. She didnt really like them. She found them comfortable but plain.

She ordered them anyway because the company pledged to give away a pair of shoes for every one it sold.

Their campaign of buy a pair of shoes and you donate a pair of shoes to someone in need, I feel like that really was what made them stand apart, says Okazaki, who is now 26, a photographer for the "Today Show" in New York and the owner of additional pairs of Toms shoes.

Its funny because if you look at their shoes theyre not all that attractive. Initially the draw was not their shoes. The draw was the meaning behind it.

For Okazaki, and those her age, it was a typical millennial move.

A few years ago, millennials made up a digitally driven generation that was often derided and underestimated. Sure they were light years ahead of their elders whenever a new electronic toy hit the market. But they were young, and lacked the buying power of their parents.

Now they have grown into the most critical group of all consumers, a generational powerhouse that both excites and perplexes those who want to sell them something.

Millennials that generation born between 1980-2000 represent the largest group of potential consumers in American history. Some estimate their numbers as high as 92 million, although most use a more conservative 79-85 million. Baby boomers, their closest competitors, numbered between 76-77 million.

But mere size doesnt tell the whole tale. Millennials behave differently, almost unpredictably, and their values and media savvy make them a hard nut to crack for marketers and manufacturers.

Their different sensibility has forced advertisers to rewrite the rules. They've thrown away spot ads, traditional media platforms and luxury pricing to reach millennials. Instead, social media, peer reviews, authenticity and bargain price points have taken their place.

A medium in itself

Millennials will even buy products just because they believe the company has a "soul," or they identify with its mission.

Take Warby Parker, an eyeglass company that like Toms makes a pledge of donating a pair of glasses for every one sold.

Warby Parker does minimal advertising and yet is a millennial sweetheart, blossoming, according to Brian Sheehan, associate professor of advertising at Syracuse University, because it understands the value of authenticity.

Because they stand for something thats emotionally important to millennials, says Sheehan, a former CEO for various Saatchi & Saatchi offices worldwide, they are sought out and shared.

And that is the key to making advertising work in the millennial age. Marketers and advertisers are discovering that the old ways of 30-second television commercials dont work as well, and this new generation of consumers demands more. When they get it, they can spread it faster than any spot ever produced.

Now millennials can seek out anything online, and when its effective and touches them, theyre going to share it, Sheehan says. What happens is millennials will share that for you. Millennials are now a medium.

How to reach millennials

That now means advertisers and marketers have to approach them differently, says James McQuivey, a vice president and researcher at Forrester Research in Boston. Technology has freed millennials from controlled messages.

They are empowered in ways alien and fantastic to previous generations. At the heart of their behavior lies technology. Millennials are widely considered the first "digital native" generation, a term McQuivey says means they grew up with access to digital tools like the Internet and cellphones. They were the first to embrace social media and the first to think that being connected to the world via a mobile phone was a normal and natural state of affairs.

Millennials still trust products and companies, but how they come to that follows a different path. Their parents watched television and accepted the news as delivered. Millennials can bypass all that. They can do their own research, critique the products, communicate with peers, choose whom they believe.

As a result, the range of ways they learn about the world and about products and services is much broader than it was for those of us who grew up in the 1970s with our four TV channels, McQuivey wrote in an email. It's not only broader, but it's also more organic in that it's not controlled by Walter Cronkite or Madison Avenue.

They learn about things from their peers on social media, they learn about things from tweets offered by celebrities, and they learn about things from viral YouTube videos.

Trusting their peers

Unlike their elders, millennials have at their fingertips a vast supply of product reviews. Those who have studied millennials say they tend to trust those reviews more than traditional advertising.

Laura Jungreis Kahn moved to Hawaii when her now-husband was stationed near Honolulu. They spend much of their discretionary income buying food, either in a store or restaurants. Peer reviews play a pivotal role in their decisions where to eat.

When we eat out, we always look on Yelp, says Kahn, 24, and a paralegal at a Honolulu law firm. We always want to see what people are saying on Yelp and look at pictures on Yelp before we decide we want to go somewhere, especially being somewhere where were not from.

Its really helpful, and its fun.

Engaging with brands

Millennials also believe they should have a say in how the brands operate in the larger world outside of marketing, says Christine Barton, a senior partner and managing director for the Boston Consulting Group in Dallas. They think their opinions matter and that companies should listen to them.

Millennials engage with brands very differently, Barton says. They have expectations that their relationship with the brand is going to be two-way, meaning they expect to influence the brand in terms of the products, in terms of the promotion.

And they have a very different media with which they engage with brands and they have a much more complex journey to how they purchase and refer brands.

Barton, who has co-authored studies about the generation, says millennials use social media to interact with both the brand and their peers. That sets them apart.

Her study found that millennials use technology to connect with a greater number of people, more frequently, and in real time. They demand information fast and now. They believe their peers on social media, read blogs and maintain larger networks.

That now means marketers and advertisers have to join them in their organic conversations rather than trying to influence them directly, McQuivey argues, a concept advertisers call earned media, as opposed to paid media, where you earn the impressions you get through earnestly connecting to the things that millennials care about and trying to join their conversations already in progress.

Some similarities

Millennials do resemble their predecessors in some ways, Sheehan says. The motivation is utilitarian.

When television started in the 1950s and 60s, it was used to enhance peoples lifestyles, enhancing it through easier access to information, easier access to entertainment. Millennials are doing the same thing, they just have more technology at their disposal, he says.

And that means advertising now is only effective when it touches millennials or offers something they find useful. The old ways of repeating ads over and over until the message sunk in just wont work.

Millennials are using technology to enhance their lives, Sheehan says. When your advertising enhances that by connecting with them emotionally or giving them information they need or want, they love you.

But when it disenhances their lifestyle, they hate you.
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