Is the phrase 'targeting millennials' ripe for retirement?
There is a widely held perception of millennials being 20-something soy-latte-drinking hipsters with wads of disposable income and attitude.
Since the term was coined to describe someone who became an adult around the time of the new millennium, this demographic segment has been much sought after by the payments industry as the generation that will embrace and ignite innovation with an affinity for all things digital.
However, it is easy to overlook that, like baby boomers and Gen X-ers, millennials are not stuck in their twenties forever. They are becoming just like the rest of us.
Older. Wiser. Wealthier. Duller?
This week, the most recent version of the long running Harris EquiTrend Study further confirmed millennials aren’t the young upstarts they used to be. In a generational comparison, the survey ranks the top ten brands of the year by generation, looking at millennials, Gen X and Boomers. Two financial services companies appear in the millennial rankings, Visa and PayPal. As a key indicator of the way millennials are maturing, Visa is ranked #3 while PayPal is ranked #5, the traditional card network outgunning the (relative) newcomer in terms of brand respect. Comparing the generations, Gen X-ers rank PayPal at #4, but do not rank Visa in the top ten and Boomers rank Visa at #4, but don’t include PayPal in their top 10.
Further evidence of the maturing and financially conscious millennial comes from the increase in brand equity by industry vertical. Compared to the 2016 poll, the greatest increases in brand equity scoring among millennials came from companies in real estate (+3.9), insurance (+3.9), airlines (+3.6) and financial services (+3.3)
So what does this mean? With millennials giving greater respect to payment brands and financial services than Gen X-ers and Boomers, it means millennials are growing up, starting families and buying new homes to accommodate these life changes. Their financial requirements have outgrown ‘venmo-ing’ a share of the rent or pizza delivery, hence their new found awareness for companies that can enable financial freedom and flexibility. In short, millennials are increasingly middle aged, conventional and, yes, dull.
We’re all Millennials
The age range for millennials is not strictly defined, compounding the definition of millennials as a homogenous group. The de facto range for millennials are individuals born between 1980 and 1995, but some sources consider the birth of millennials to go back as far as 1976 and as near as the early 2000’s, a span of 24 years. Even with a more normal range, Millennials are far from a scarce commodity. Taking an average date of birth range for millennials (1981-1997) and using 2015 U.S. Census data, the Pew Research Center found that in 2016, millennials surpassed Boomers to become the largest living generation in the U.S. The research found there to be 75.4 million millennials compared to 74.9 million boomers.
Millennials are still distinct. Just not very.
Despite becoming older and commonplace, millennials are not morphing into gen-Xers or boomers. The American Express Digital Payments Survey released this week flags some ongoing differences between Millennials and the overall population of consumers. 20% of consumers report that they are not currently carrying any cash in their wallet, compared to 28% of Millennials. Further evidence of the difference in cash spending; 22% of consumers say they have not used cash to make a purchase in over a week compared with 26% of millennials. Millennials are different, but not that different.
The payments industry fixation on millennials as a target demographic for innovation may have made sense ten years ago when the average age of a millennial was twenty five. But today, with millennials becoming the norm, targeting this group is effectively targeting the public at large. It may well be time to focus on the next generation.