Millennials are blamed for the collapse or death of many industries: chain restaurants, soap, golf, beer, napkins and even cereal. Instead of blaming millennials, the focus should be on the failure to adapt to new business models. Companies clinging to old ways of doing business fail to attract the millennial demographic.
Disruptors change the landscape for many businesses. Millennials aren’t looking for changes in existing industries, they’re looking for experiences that will entice them to spend money. For all the industries that they kill, millennials also save and start many more.
One of the biggest success stories of a failing industry experiencing new highs is the vinyl industry. Sales of vinyl records are projected to exceed $1 billion this year, selling more than 40 million units, still a far cry from its peak in 1981 when 1 billion units were sold. Close to 50 percent of vinyl buyers are 35 years or younger.
Another industry that may have been seen as outdated that millennials are saving is public libraries. Pew Research Center found that millennials are the group most likely to have visited a library in the last year — more than 50 percent of people 18-to-35 visited libraries, excluding university and school libraries. Millennials were also more likely to use library websites. Research shows that it’s attributed to a wide range of services now offered at libraries, enabling the modern library to act as a technological “petting zoo,” which gives people affordable access to technologies such as 3-D printers.
While millennials save more than other age groups, one thing they don’t hesitate to drop money on is coffee. Sixty percent of millennials regularly spend more than $4 on coffee, compared to 40 percent of Gen X-ers, and 29 percent of Baby Boomers. Millennials are drinking so much coffee that the world may experience a shortage, millennials make up 44 percent of coffee drinkers in the US. Daily consumption of 18-to 24-year-olds rose from 34 to 48 percent, and 25-to 39-year-olds went from 51 to 60 percent, from 2012 to 2016.
Many industries are failing to resonate with millennials. Golf is currently on the decline, despite being an Olympic sport and generating $70 billion of revenue per year. Golf doesn’t appeal to millennials because of its air of exclusivity. One area of the golf industry where business is thriving is the high-tech driving range company Topgolf.
Topgolf mixes a driving range with a social lounge where people can hang out. Microchips in the balls allow customers to track their performance and view via an app. Topgolf chief executive Erik Anderson says 53 percent of the guests were in the 18-to-34 age range.
Changing the atmosphere of the game attracted millennials. While golf on a course takes hours, and requires expensive equipment and knowledge of its rules, going to Topgolf can be a Friday night experience with a group of friends.
No matter what industry is trying to entice millennials to buy their products, it comes down to one thing: experience. Millennials prioritize experiences over material goods, 72 percent of millennials prefer to spend money on experiences rather than material goods. Social media plays a big role in enticing others to join in on the experience. Additionally, millennials don’t want to miss out and are motivated by that. Nearly 7 in 10 of millennials experience FOMO, fear of missing out. Being barraged with images of friends and loved ones on social media trying new things causes millennials to try these new things themselves.
Takeaway: Companies have to learn to market to millennials
Millennials are willing to spend money as long as they’re buying into an experience. Getting experiences is what’s driving millennials to spend. Vinyl records are an experience. They’re a material good, but the act of collecting, searching and being able to physically hold it lends itself as an experience, as opposed to a sea of digital music files that seem interchangeable when you can’t see them. Topgolf changes the way millennials see golf in their minds. Instead of a country club with old men playing golf for hours, Topgolf turned it into an experience you can go to with a large group of friends for a short amount of time. Companies have to learn to go beyond marketing mere products and sell themselves as unique experiences or lifestyles that will resonate with millennial consumers.
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