We often discuss international marketing strategies and how consumers can be subtly or substantially different in different cultures and countries.
However, in this article, we’re discussing a generational change across the entirety of the human population across the globe, rather than differences between cultures.
The Millennial consumer is changing marketplace dynamics. This narrative has been around for a while and it is starting to become clearer that Millennials have a different decision-making process and mindset than previous generations, particularly Baby Boomers.
As of 2020, there were around 14.26 million Millennials in the UK, making it the largest generation at the time and even if you’re in the B2B space, understanding the modern consumer’s behaviour and psychology is essential.
Deloitte, interested in the shift, decided to launch a study into this very subject, taking emotion and impressions out of the equation to finally answer the question: “Has the consumer fundamentally changed?”
Understanding the modern consumer
Deloitte’s year-long study to understand consumer behaviour culminated in a report available to read on their website.
Starting from a point of various stereotypes attached to the Millennial generation – value-driven, socially conscious, experience seeking and narcissistic – Deloitte wanted to understand whether the consumer has fundamentally changed.
Or are the behavioural changes that have been observed triggered by wider societal forces from recession to COVID-19 and the digital revolution?
Taking in disparate sources from government data, client focus groups, interviews with industry leaders, analysts and primary interviews, Deloitte surveyed a representative sample of 4,000 consumers in the US.
The survey made use of location data and credit card transactions to understand patterns in buyer behaviour. By examining micro and macro factors, the researchers wanted to understand the broader factors influencing society which impact on the habits of consumers.
Deloitte explored the macro factors: demographic, cultural and economic trends affecting the US consumer. They also zoomed in on micro factors: regions, ethnicity and economic situation, including how people spend their money.
The findings – demographic factors
As an international marketer, it’s crucial to understand demographics to assess how the consumer is changing and to what extent. Interestingly, Millennials are more fractured and disparate from other generations. Might this have something to do with the breaking up of traditional media and the endless choice and ability to connect with like-minded tribes enabled by the internet?
More than just varied in their beliefs and values, the Millennial generation is more diverse in their ethnic makeup.
Stateside, Millennials represent 30 per cent of the population and are the most diverse generation in US history. Approximately 44 per cent belong to ethnic and racial minority groups, while only 25 per cent of Baby Boomers belong to ethnic minority groups. This is a staggering rise mirrored in the UK – although not to the same extent. In the last 10 years according to census data, there has been an increase in the number of people describing themselves in categories other than white. Those selecting ‘Asian’ on their census form increased from 4.4 per cent to 7.8 per cent, while those describing themselves as ‘Black’ rose from 2.2 per cent to 3.9 per cent.
As well as being more diverse than ever, younger people are moving to cities in greater numbers. Geography is a huge factor which shapes the needs and desires of consumers. The majority of current jobs and emerging sectors consist of sedentary service industry jobs, rather than manufacturing, increasingly from home or hybrid.
Additionally, the Millennial generational cohort is more educated than its predecessors. Over the last 20 years, the number of white and black Americans with college degrees has increased by 12 per cent, while the rate of increase for Hispanics is 7 per cent.
This has repercussions on the way they spend their money. Economic factors, such as recession, rising house prices and increasing debt, often off the back of further education, mean Millennials buy houses, marry and have children later in life.
Where do people spend their money?
Same, but different? There are many similarities in the places consumers tend to spend their money today compared to the recent past. From 2005 until today, retail spending has risen around 13 per cent.
In the last 20 years, consumers appear to be spending consistently across most categories. Grocery, alcohol, restaurants and housing expenditure is in line with 1997 levels.
Here’s the crux. The most measurable difference between what Millennials spend compared to previous generations is in essential or ‘non-discretionary’ expenses. These include education, housing and in the US where free healthcare is off the table, healthcare. So, what we’re seeing is less a change in consumer habits and tastes and more a change in the financial pressures younger consumers are under.
A think tank report looked into how Millennials are worse off than their parents. It revealed that real hourly pay for workers in their 20s dropped a dramatic 9.2 per cent between 2009 and 2014, as the global financial recession impinged on the very youngest entrants to the workforce’s ability to make money.
Additionally, Britain saw a 30 per cent rise in graduates in low-paid work at the beginning of the global recession; this rate remained higher than usual until 2015, with the slow recovery of the economy.
Other factors which cut Millennials’ disposable income include a rise in housing costs. Those born in the 1940s only paid 10 per cent of their wages on housing costs in their early career. For those born in the 1980s, the figure rises to 24 per cent.
Today, more young people also live with their parents into their late 20s. The rate increased from 24 per cent in 2007 to 32 per cent in 2018. The financial crisis stemming from the global pandemic has also led to further increases in this figure; Statista data shows that 43 per cent of males and 25 per cent of females aged 25 lived with their parents in 2021.
Keep an eye on emerging trends during international expansion
This fascinating look into the millennial generation’s behaviour, spending and fundamental cultural self-identification show how agile your marketing has to be and how you must adapt for a different generation. Throw into the mix language and country or continent variances and the landscape changes even more.
When expanding into a new market it is important to understand the micro and macro trends impacting your audience base. Different demographics face varying challenges and circumstances which may affect the amount of disposable income they possess too.
We’re here to help you navigate the language challenges you face and our expert marketing translators are graduates and post-graduates who can really understand your brand, segmentation and positioning of your source text to ensure the meaning and ideas are carried over perfectly.