Summary: With Millennials’ spending power increasing at an exponential rate, companies are eager to discover successful marketing strategies targeting this new wave of consumers. The Millennial’s consumer behavior will significantly influence the type and production of future retail items to an immense extent, drawing in the discourse of sustainability, one of the main issues of the new generation. Research suggests that the key to appealing to this generation of socially aware individuals lies within the business approach of corporate sustainability, which not only promotes a “greener” product, but strengthens the loyalty and total revenue that can be acquired from the Millennial consumer base.
In the year 2020, the majority of Millennials will reach their peak of economic influence. Already a dominant and dynamic force, the Millennials – born between the years of 1982 and 2000 – now number 83.1 million and spend an impressive $600 billion throughout the year, exceeding that of the 75.4 million Baby Boomers. Once Millennials reach their prime shopping years, they will increase their annual spending by a whopping 1.4 trillion and will represent 30% of total retail sales. Due to this increasingly dominant presence in the consumer marketplace, companies are eager to understand the average Millennial’s consumer behavior in order to maximize their economic potential.
Climate change is the issue of the millennial generation. Although we live in a technologically advanced world, if nothing is done to counter climate change, our generation and the following decades will have to have to face serious economic and environmental consequences, resulting in damage to property and infrastructure, lost productivity, mass migration and other security threats. This tension places Millennials in a tug-of-war between an era of limitless potential for advancement and a retrograde of human development. In this paradoxical situation, what does consumer behavior and the career choices of Millennials suggest about the future of the economy and the planet? A study conducted by Cone Communications revealed that nearly 80% of Millennials surveyed would prefer to work for a company that cares about how it contributes to (or impacts) society, and that 70% consider a company’s social and environmental commitments when making purchasing decisions. The study also reveals that 70% of Millennials are willing to spend more on brands produced by companies that positively impact society.
Yet perhaps, in a departure from past attempts to confront climate change, young people are also aware of our own agency to be a part of the solution.
Given the Millennial generation’s affinity for social and environmental impact, this beckons the question of which particular causes that they will support. The environmental state of the planet in particular is an issue of the Millennial generation, a problem caused by preceding generations, many of which will never experience the full consequences of the irreversible damage done. A study recently conducted by the Clinton Global Initiative and Microsoft illustrated this imbalance: 76% of Millennials claim that they care about the environment while only 24% of their parents generation do.
Addressing environmental concerns now is essential to ensuring a world habitable 30 years from now. As Earth’s surface temperature continues to rise, thermal expansion paired with melting glaciers will continue increasing global sea levels. Coastal waters will rise high enough to submerge every city on the East Coast of the United States from Boston to Miami in addition to all cities around the world with similar geography. The resulting displacement effect will make approximately 100 million people climate refugees by the year 2050. Drastic swings of climate also disrupt production of food and availability of fresh water, increase climate-related catastrophes, and could drive one-fourth of the Earth’s species to complete extinction.
The accumulation of evidence related to environmental catastrophes motivates Millennials to support the environmental healing cause. However, once the initial impression of the severity of the environmental crisis dissolves, environmental conservations reveals itself as an excellent potential marketing strategy. Grace Farraj, SVP of the Public Development & Sustainability at Nielsen explains, “Brands that establish a reputation for environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending Millennials too”. The notion that a Millennial will readily support a cause, paired with the finding that, if treated correctly, the Millennial is an extremely loyal customer, provides retailers a dream customer base: an extensive and increasing population ready to spend more and faithful to a brand.
Certain companies have already begun to implement this strategy by associating their brand with a particular social or environmental cause in order to attract this customer base. In perhaps the riskiest marketing strategy ever executed, Patagonia launched its campaign “Don’t Buy This Jacket” in order to minimize the possibility of an unnecessary, wasteful, and environmentally harmful purchase. The advertisement was paired with a request for customers to pledge to buy used clothing when they can. Patagonia’s request to make sustainable choices and avoid wasteful purchasing had a completely opposite and phenomenal response. The company’s sales increased nearly one-third to roughly $543 million in revenue.
Patagonia was one of the first companies to change the game of corporate sustainability and encourage other companies-such as H&M-to enact similar strategies that would appeal to a larger demographic. However, just because the average Millennial responds positively to environmental and social causes when considering retail purchases, does not instantly deem them as “environmentalists” or “socialists”. Recent studies reveal that while Millennials are environmentally conscious, their day-to-day habits and practices often differ with their beliefs. The average Millennial is better tailored as an “environmentalist” in the corporate sense, and would rather purchase a sustainable product than directly alter their lifestyle in order to decrease their carbon footprint. Being sustainable through a retail purchase presents itself as a facilitated version of how the Millennial can make their difference.
However, this tendency does not discredit the power that the Millennial generation holds. Living in a constantly interconnected world where social media and other forms of communication allow them to be aware of and spread knowledge, paired with their forecasted future economic power, could make the Millennial perhaps the most powerful consumer generation of all time. It is evident to corporations and businesses that social and sustainable causes are what will draw in a large percentage of this customer base. Tom LaForge, Director of Human and Cultural Insights at Coca-Cola, observed this behavior as people now buy with the motto, “The good I want to see in the world is possible if I partner with the right people.” As such, the time is now for companies to provide Millennials this possibility.
Alice Lemée is a rising Junior at the George Washington University pursuing a bachelor’s degree in Communications with a concentration in Sustainability. Originally from New York City, Alice’s interest in sustainable urban development started young and continues to grow as she expands her interests in the corporate side of sustainability. In the future, Alice plans to use her Communications degree to enable businesses and their clients / customer base to be in touch with sustainable infrastructure in order to create a more profitable business module and greener planet.
Donnelly, Christopher (2016). “Who Are the Millennial Shoppers?” Outlook. Accenture. https://www.accenture.com/us-en/insight-outlook-who-are-millennial-shoppers-what-do-they-really-want-retail
Cahan, Sarah (2014). “Perceptions, Millennials and CSR: How to Engage the New Leaders of Tomorrow.” Cone Communications. May 28, 2014. http://www.conecomm.com/insights-blog/csr-and-millennials
Timm, Jane C (2014). “Millennials: We Care More about the Environment.” NBC News Digital. March 22 2014. http://www.msnbc.com/morning-joe/millennials-environment-climate-change
The Steering Committee (2016). “Sea Level Rise from Climate Change Could Displace Tens of Millions of People.” http://en.occa.mard.gov.vn/Database-on-climate-change/Climate-change-impacts/catid/23/item/2868/sea-level-rise-from-climate-change-could-displace
Global (2015). “Green Generation: Millennials Say Sustainability is a Shopping Priority.” Nielsen. November 5 2015. http://www.nielsen.com/us/en/insights/news/2015/green-generation-millennials-say-sustainability-is-a-shopping-priority.html
Stock, Kyle (2013). “Patagonia’s ‘Buy Less’ Plea Spurs More Buying.” Bloomberg. August 28 2013. http://www.bloomberg.com/news/articles/2013-08-28/patagonias-buy-less-plea-spurs-more-buying
Schuler, Kaitlin (2016). “Millennials’ Sustainability Attitudes Contrast with Actions.” Medill Reports Chicago. March 8 2016. http://news.medill.northwestern.edu/chicago/millennials-sustainability-attitudes-contrast-with-actions/
Kline, Maureen (2014). “Why Your Brand Should Appeal to Sustainability-Friendly Millennials.” Inc. September 30 2014. http://www.inc.com/maureen-kline/why-your-brand-should-appeal-to-sustainability-friendly-millennials.html