Money Matters

56 Pages·2016·1.93 MB·English

Money Matters
How Affluent Millennials are
Living the Millennial Dream
Presented by
Money Matters
How Affluent Millennials
are Living the Millennial Dream
1 The Changing Face of Affluent Millennials p.1
2 Essential Questions p.3
3 Methodology p.4
4 Getting to Know Affluent Millennials p.7
5 Affluent Digital and Social Trends p.13
6 Key Insights p.17
7 Segmenting Affluent Millennials p.22
8 Activating a New Generation of Affluence p.38
9 Get Inspired p.42
10 Now It’s Your Turn p.48
All of the material in this document is copyrighted and may
not be reproduced in whole or in part without express written
permission. For permission please contact Jeff Fromm,
[email protected].
1
The Changing Face of
Affluent Millennials
Anyone who has yet to be inundated with Affluence has been a growing
the plethora of research and reporting buzzword when it comes to
conducted on millennials must have millennials in the marketing
been living on a well-stocked island over and business world. Across the
the last 10 years. We’re jealous. For those board, brands from Burberry
who have seen the books, stories, reports to BMW have been wondering
and documentaries, it would appear that how to engage a nascent
all things millennial have been well pored but growing population of
over, researched and sensationalized. Yet affluent young adults, due
as they say on direct response TV, “Just to their nontrivial impact on
wait, there’s more!” discretionary spending.
In the course of our consulting and At less than 10 percent of the 18- to
research over the past year with all 34-year-old population, these millennials
manner of clients looking to transform hold a disproportionate sway over both
their businesses in the wave of the dollars and influence. Brands and
millennial tsunami, questions began businesses are attempting to figure
to arise, especially in the luxury and out what makes these millennials tick,
finance sectors, about a small subset of as compared to their less affluent
millennials we had not previously paid counterparts, and what the best practices
much attention to: “affluents.” are to gain the loyalty and advocacy of
this powerful population.
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1 By the numbers, there are about 6.2 many segments being female-dominated
million millennial households that report and less than college-educated - think
earning at least $100,000 annually. early entrepreneur.
According to Unity Marketing, this group
will take over as the largest generational However, what ultimately defines the
segment in the luxury consumer market affluents is not that they are wholly unique,
The Changing around 2018-2020. While $100,000+ but that they are in fact the millennials
Face of Affluent HHI may not qualify for “affluence” in that the media has portrayed to us.
Millennials a lot of marketers’ target profiles, keep Unlike nonaffluent millennials who often
in mind that at only18-29 years old on say one thing and act differently (most
the younger end of the spectrum (46 millennials will say they buy organic but
percent of respondents), this younger then run through the store register with
cohort will continue to gain spending the off-brand peanut butter), affluent
power as they climb the corporate (or millennials are unfettered from issues of
noncorporate) ladder, start new firms general affordability. They do not have
and continue to find new ways to create to trade up or trade down; they simple
value and disrupt industries. buy the things they want. Essentially,
they can buy the products and services
Seventy seven percent of the 6.2 that fit their general millennial mindset –
million millennial households fresh, organic, fast, high quality – and do
we studied reported making over not have to trade up to get it. They can
$150,000 annually, customers take the great adventures, chart the less
every business would covet traveled paths and embrace the risks
today and tomorrow. they wish to pursue.
In this report, we will show that millennial Whatever conclusions you draw, this
affluents are not homogenous. In fact in report was designed to give you the
running a segmentation on over 1,100 data and insight to better understand
data points, four unique segments this unique cohort and its segments.
emerged, each statistically different In creating this report, we developed a
in behaviors, attitudes and general list of guiding questions that served as
demographics. Each segment will require a foundation for our research. We hope
a nuanced, omni-channel, uber-relevant that our curiosity matches yours and
approach to engagement. that through enlightenment your brands,
clients and customers will prosper from
Although conventional wisdom might the findings below.
suggest that affluents are male, highly
educated and single, this convention is
seriously challenged in our data. with
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2
Essential Questions
1 Who are affluent millennials based on general demographics?
2 What are the major differences between affluent millennials and
non- affluent millennials, previous generation of affluent adults and
the generation population?
3 What are the key insights regarding affluent millennials?
4 H ow do affluent millennials break down in terms of unique segments based
on behaviors, attitudes, demographics and values?
5 W hat are the best ways to activate affluent millennials to drive advocacy and
lifetime value?
6 What are the brands getting it right?
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3
Methodology
Upon developing our initial questions,
we worked with our data partners to
consolidate all of the optimal research
available to describe affluent millennial
consumers’ behaviors, attitudes,
lifestyles, media usage and preferences
– and all the nuances that guide the
creation of brand strategy and actionable
tactics.
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3 Our approach to conducting research Behavioral/Transactional
covered three separate parts:
Behavioral data was essential
1 Affluent Millennial in developing a deep, insightful
understanding of affluent millennials.
Behavioral Segmentation Behaviors can be expressed through
Methodology customer transactions and through both
By aggregating the best-of-breed syndicated and proprietary research.
U.S. consumer databases into a In fact, experience has proven that the
comprehensive dataset, our partners most predictive segmentation solutions
at Consumer Orbit LLC utilized data are those in which transaction-based
representing over 110 million U.S. behaviors are combined, statistically and
households and more than 230 million simultaneously, with consumer database
individual consumers to develop four behaviors and survey research behaviors.
segments of affluent millennials between
the ages of 18 and 34 making more Attitudinal
than $100,000 annually. Overall, this
research process painted a robust, data- While behavioral information allowed
driven picture of the 6.23 million affluent us to gain insights into what affluent
millennials living in the United States millennials do in the consumer market,
today. we knew it was imperative to understand
why affluent millennials make certain
Demographic/Psychographic purchases. To accomplish this, we utilized
the wealth of attitudinal data available
As we studied these affluent millennials, in syndicated survey research based on
we focused on behavior-based more than 500 individual statements,
segmentation tied to actual transactions, the majority of which have more than 15
behaviors based on purchase history years of historical reference points.
outside consumer-based behavior data
collected from accredited survey research The use of consistent attitudinal data
work, and aggregated data from third- allowed us to utilize the descriptive
party companies. These data sets were statements as both drivers to certain
combined in a proprietary process that types of partitioning solutions as well as
allowed for a simultaneous solution using descriptors to our solutions.
disparate data sources.
Defining the Segments
Following a parallel timeline, we used
demographics to describe affluent With these extensive resources, we
millennials rather than define market performed rigorous statistical analysis in
segments. Each demographic may order to best determine the appropriate
contain up to 40 subsegments that number of segments that encompass
create disparate behaviors within each the different types of affluent millennial
demographic grouping. consumers. Then, using driver variables
related to luxury and financial factors,
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3 we partitioned the data into four distinct
segments: Calculated Go-Getters, Family YouGov BrandIndex is the only daily
Forward, Active Influencers and Big measure of public perception of consumer
City Bachelors, thereafter described by brands across a wide selection of industry
thousands of behavioral and attitudinal sectors. Each day, YouGov BrandIndex
characteristics. These segments will captures six key indicators of brand
Methodology be described in significant detail in our health, and two measures of recent brand
segmentation section of this report. awareness: General Impression, Quality,
Value, Corporate Reputation, Customer
2 Consumer Technographic Analysis Satisfaction, Willingness to Recommend
Attention and Buzz. Respondents are
Forrester’s data services provide deep drawn from proprietary online consumer
insights into how technology impacts panels of 1.2 million respondents. For this
customers’ attitudes, behaviors and report, we tapped into data collected
expectations in a rapidly changing from respondents in the 52 weeks prior
world. Leveraging Forrester’s annual to May 1, 2015.
survey data from more than 400,000
consumers in 20-plus countries, we We investigated brands that scored
looked at affluent millennials to gain a highly in regard to Buzz, Purchase Intent
deeper understanding of how these tech- and Former Customer. We compared
empowered consumers and prospects these scores to the nonaffluent millennial
make decisions. population and created a comprehensive
list of brands that have successfully
These data delivered insights across integrated themselves into the affluent
a range of emerging technologies, millennial consideration set.
behaviors, digital, mobile and social
engagement.
3 Affluent Millennial Brand Analysis
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4
Getting to Know
Affluent Millennials
Our research led to significant insights that Center, today’s young women are the first
will alter the way brands engage with a in modern history to start their careers
new generation of affluent millennials. But at near parity with men. Among female
before we get to the insights, let’s break workers in 2012, hourly earnings were 93
down the affluent millennial population by percent of what their male counterparts
the numbers. were making.
Surprisingly, the affluent millennial The narrowing of the gender wage gap
population is 64 percent female. When for young adults is attributed to higher
we think about affluence in the United education levels among millennial women
States today, the typical image that entering the workforce. Currently, females
comes to mind is a man. Overwhelmingly, are also graduating from universities at
men make more money than their female higher rates than men in the United States.
counterparts. Fortunately, the gender We have also experienced a relative
wage gap has begun to decrease among decline in median hourly wages for men,
millennials, a potential explanation for with a 4 percent decrease between 1980
the majority female affluent millennial and 2012, according to Pew Research.
population. According to Pew Research
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4 However, despite advances made Think about the most affluent millennials
in regard to gender equality when it of today. Mark Zuckerberg left Harvard
comes to affluence, we are still seeing a without a degree, after creating Facebook
predominately white affluent population – a throwback to an earlier generation of
of adults between the ages of 18 and entrepreneurs. Teen stardom, YouTube
34 making a household income of more and blogging fame, and even reality TV,
Getting to than $100,000 annually (78 percent) – all offer models for success, however
Know Affluent echoing trends of affluent consumers unlikely.
Millennials from previous generations.
On a smaller scale, as
When it comes to age breakdowns, it’s millennials become more
no surprise that the majority of affluent affluent, many see less value
millennials are in the older half of the in the traditional educational
overall millennial population. More than system, as they are more
50 percent of affluent millennials are capable to act on their
between the ages of 30 and 34. This is entrepreneurial ideas and
due in large part to the high percentage aspirations.
of affluent millennials who have reported
completing college, a higher level than the We can also attribute this to a changing
general U.S. population. Fifty-six percent value perception of the educational
of affluent millennials have graduated system. Traditionally, affluent adults
from college, which slightly outpaces connected their higher levels of income
the 52 percent of the general affluent with higher educational degrees. Now,
population. Overall, this number dwarfs unless a field requires specific advanced
the 30 percent of the total United States schooling (medicine, law, engineer,
population who are college graduates. etc.), the common mindset is that
undergraduate utility is enough to propel
Although graduation rates are high a career rather than spending more
among the affluent millennial population, money on an advanced education simply
it is interesting to note that graduate for the prestige of an additional degree.
school attendance for affluent millennials
is significantly lower than what it was for Ultimately, the conventional wisdom that
affluent adults from previous generations education drives wealth is true, but we
(index 74) and even lower when we factor have not seen affluent millennials jumping
in the population of affluent millennials into grad school at the same rates as
who have completed graduate school their predecessors. Only time will tell if this
(index 60). This is potentially a result of the trend will continue or if affluent millennials
entrepreneurial spirit of many millennials are simply delaying this next phase of their
who have the means to explore options educational careers longer than previous
outside of college. generations.
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