FOR SOME firms, attracting millennial buyers may be as simple as tweaking a colour. In February Pernod Ricard, a French drinks group, launched a “millennial pink” gin that the company said would appeal to younger drinkers. In April, Nestlé, a Swiss food giant, released a pink version of its popular KitKat chocolate bar. It is a simple formula that may prove successful. For most companies, however, the strategies for winning over this increasingly influential demographic group are rather more complicated.
Millennials—typically defined as those born between 1980 and 2000—account for more than a quarter of the global population. By 2025 they will represent three-quarters of the world’s workforce. While a surprisingly large number of millennials have delayed the traditional milestones of adulthood, such as marriage and parenthood, they are nevertheless entering their peak spending years. Shopping preferences formed during this period will last for years to come. Aware of this, established firms are adapting their products to better align with millennial tastes. Many are following three broad approaches.
One is to emphasise transparency. Everlane, an online clothing-manufacturer popular with millennials, discloses the conditions under which each of its garments is made as part of its philosophy of “radical transparency”. Halo Top, an upstart ice-cream brand, plasters its cardboard cartons with the number of calories contained in each pint, a trick now copied by several of its rivals. Selling experiences over “stuff” is another popular strategy. In 2016 JPMorgan Chase, a bank, launched Sapphire Reserve, a premium credit card with generous travel and dining rewards that has been a hit with well-off millennials. Products that are more flexible and that require fewer financial commitments are also attractive to younger consumers, who have more debt, fewer assets and less job security. Several big carmakers now sell subscription services for their cars, offering access to new vehicles without lengthy financial obligations.
Alas, some corporations may be fighting a losing battle. Being a big brand with plenty of space on supermarket shelves was once an asset; now it is a liability. E-commerce allows millennials to bypass traditional household names in favour of smaller niche brands. Big, slow-moving firms with long product life cycles cannot easily adapt to changing tastes like their more agile competitors. Such struggles are prompting some corporate behemoths to take drastic action. In August Procter & Gamble, one of the world’s largest consumer-goods firms, applied to America’s federal patent office to trademark several millennial-friendly acronyms including LOL, NBD, WTF and FML for use in its marketing campaigns. The 181-year-old firm’s move was met with scepticism by analysts. Many millennials simply LOL’d.