Adapting CPG Promotional Strategies to Target The Millennial Generation

The growing significance of the millennial generation as a target market for the CPG industry in US demands an accelerated evolution of promotion strategies towards channels and initiatives that resonate better with this technology savvy and price sensitive market segment. This whitepaper tries to throw some light on the results of some of the recent studies on the preferences and shopping behavior of the millennial generation in the US and how CPG brands and retailers can adapt promotion strategies to win and retain this allï¾Ãƒâ€šÃ‚Æ’??important customer segment. The millennial generation (aged 18 to 34) is a crucial market segment that will drive growth of CPG industry in the future and is expected to generate revenue of about USD 65 billion in the next decade. The Great Recession: A substantial section of this group entered into their productive life in a period of great economic uncertainty, around The Great Recession and the unemployment rate for this age group in 2011 was 12% (3% higher than US national average of 9%). The grim economic scenario has led to a conservative approach to spending by this generation that reflects in their attitude towards CPG products, especially personal care and packaged food where their focus on price is higher than that of older generations. 33% of millennials use atï¾Ãƒâ€šÃ‚Æ’??home beauty treatments more and 47% cook from scratch or use limited convenience foods to save money compared to national averages of 22% and 35% respectively. They are also keen on deals and value offers that will help their budgets. The Connected Generation: This generation is also unlike others in being the first generation to have reached adulthood in a perpetually connected world dominated by portable and personalized media. They are considered ï¾Ãƒâ€šÃ‚Æ’??digital nativesï¾Ãƒâ€šÃ‚Æ’?? with 80-90% using social media and 75% having a profile on a social networking site.?? Researching online for product information and user reviews is like second nature to this segment and validation from shoppers in similar life situations is essential before they make buying decisions. Though this trend is very evident in critical high-spend purchases like automobiles and consumer electronics, recent studies indicate that millennial generation of shoppers turn to a variety of new media for information and corroboration when making decisions regarding CPG brands as well. The influence of these new media channels on millennial shoppers has been found to be two to three times that on other segments. Shopping preferences driven by the prevailing economic scenario, life situation, social habits and technological advancement have made the millennial generation a challenging and unique target market that likes to spend conservatively without sacrificing indulgences.