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It seems that retailers continue to underestimate the size and purchasing power of millennials, despite forecasts that this most important generation will outspend baby boomers by 2017.
According to a new study, “What Happens When Millennials Get the Wallet,” retailers do not fully understand the needs of millennials, and are employing marketing strategies that do not apply to them.
“Millennials have different motivations, attitudes and behaviors than previous generations, and retailers need to adjust their business strategies accordingly in order to thrive,” said Les Berglass, CEO of Berglass + Associates, the research firm that conducted the survey along with media brand Women’s Wear Daily.
Berglass believes that for the first time in decades, “we will see a new member of the C-suite, who will be responsible for driving two-way communication between the Millennial customer and the brand and for developing initiatives that will deliver long-term growth.”
Additional key findings unveiled in the survey include:
- Approximately half of respondents are unaware that millennials are expected to outspend baby boomers annually within five years.
- Millennials rely most on their friends to make buying decisions, yet more than a quarter of respondents mistakenly believe that online advertising is the number one influencer of millennials' purchasing activity.
- Of the executives that were surveyed, more than 30 percent are CEO’s or presidents, who plan to significantly increase their digital leadership over the next three years.
- 60 percent of respondents are not conducting any research or analysis of the millennial customer.
- Only 36 percent of respondents from companies with both physical stores and e-commerce sites offer a seamless customer experience, yet millennials expect the channels to be integrated.