Millennials are the largest generation, surpassing Baby Boomers, and possess significant buying power that marketers are appropriately paying attention to. More importantly, women of this generation are demonstrating significant spending power – more so than any other demographic. If you are one of the marketers who are not focusing in on this generation and the female sub-set of it, then count yourself among those who are missing out on a very profitable audience.
Millennials are entering new phases in their life such as getting married, becoming first-time homeowners and having children. With each of these significant life events comes an increase in spending and thankfully these women are coincidingly seeing an increase in pay to offset this spike in purchases.
In a research report from Merkle, Millennial women are proving to be dominant players, controlling and influencing 85% of all U.S. spending power with an estimated market size of $170 billion. This comes with a tremendous amount of power over making household purchasing decisions.
Buying Behaviors of Millennial Women
Millennial women are driven to work hard for what they want, and they are more likely to feel that their career development is a priority more so when compared to women of other generations.
What makes these women so unique from other demographics, is they spend more in both volume and velocity. Data shows that the top 60% of Millennial women spend 19% more on any given day and 25% more than the comparable segment of the U.S. population.
With these kinds of numbers, it is essential for marketers to pay attention and act quickly in understanding the buying behaviors of Millennial women. To offset the spike in spending, these young women are pursuing side jobs on top of their full-time careers to supplement the income needed to buy those extra desired items or experiences.
Eighty percent of Millennial women are employed full-time, and more than 40% of them have a side hustle; for most of them, their primary motivation for having a side hustle is simply additional income, while about 20% are pursuing their passion/hobby, and about 14% are trying to gain new career skills. Having more than one job opens up a wider range of buying options for this demographic. As a result, multiple interests place these women into a variety of marketing segments instead of just one.
How Millennial Women Want to Connect with Brands
The complex buying behaviors of Millennial women poses new challenges for marketers, as they previously targeted consumers who fell into just one category alone. Today’s complex female Millennial buyer is a driving force in marketers altering the ways in which they reach the different buying personas that these young women identify with.
Even though these young women are not afraid to spend cash and are looking to dish out more for what they want, they do so by looking for the best deals possible. The two criteria that this demographic appreciates the most in her favorite brands is price and quality, speaking loudly to finding the best possible value for her money. Over 81% of Millennial women said that when splurging on large purchases, they would do so only if getting a great deal.
Along with wanting the best value for their money, Millennial women want their favorite brands to customize products and advertising to their needs. They feel more drawn to brands that communicate their needs, and feel overall that brands are responding to what they want and value.
Millennial Women Choose Experiences over Things
A whopping 72% of Millennial women feel that spending money on experiences is what makes them the happiest, vs. spending on material items. Spending on activities, gym memberships, travel and dining out all speak of having fuller life experiences.
Women are not just looking to purchase experiences but also looking at the buying experience with a brand. They want brands to speak to them on a personal level, enhancing the buying experience. How does a brand succeed at providing a customized buying experience for consumers, particularly these young women?
Brands are focusing their efforts on telling their brand story, and more importantly, combining their story with technology to connect with Millennial women on an individual level. Telling a brand story is proven highly effective through social channels such as Instagram, where Millennial women are connecting with their favorite brands. A challenge that brands encounter is navigating social to find these young women to execute their story or message.
What Millennial Women Value the Most in a Brand
More so than in the past, this generation of young women wants to be associated with brands that align closely with their own values. They want to purchase from brands that make them feel good about using that brands’ product. Not only do they look for brands that share the same values, but they also care about the history of a brand, the founders involved and the overall story that makes them stand out from the competition.
In connecting with this audience, it is important for brands to be consistent with their message across all channels, making sure to deliver an authentic story. In delivering their message, they must demonstrate that they are listening to the needs and wants of Millennial women.
For example, Aerie has eliminated air-brushing their models, which translates into building trust with women. Brands such as J. Crew have listened to their consumers by bringing back favorite products that are currently out-of-season. The beauty of connecting with consumers via social channels is that it is a two-way communication spot where they can respond to a consumer’s needs and fully deliver the best overall buying experience.
Brands Connect with Millennial Women via Social
Brands are finding that social is a more valuable point of connecting with Millennial Women than any other channel, more so than word of mouth. Over 84% of Millennial women said that customer reviews, ratings, and influencer opinions weighed heavily on their buying decisions and made the shopping experience easier.
These young women don’t want brands to push their products but rather hear from actual users themselves. Millennial women value the reviews and comments from other users, which makes brands appear more authentic and trustworthy.
In stressing the importance of user reviews, 62% of Millennial women have made a brand purchase based on suggestions from a social media influencer that they follow and respect. Brands are realizing that using an ad with an influencer may have a greater reach and impact than a traditional brand ad. Brands that succeed in engaging with Millennial women must tell a cohesive story that resonates an overall positive purchasing experience.
Her Purchasing Power is Growing
As Millennial women continue to move away from the lower-paying jobs they had to take during the Great Recession, their income and savings continue to increase, as do their credit scores, translating to greater purchasing power.
Knowing that this demographic is willing to work hard and pay more for their preferred brands and products which represent their defined lifestyle gives marketers the foundation needed to create brand stories which resonate with this powerful group. Companies that execute well on delivering experiences which support their brand story will be on their way to capturing the growing purchasing power of Millennial women.