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The Council of Economic Advisers at the White House, financial institutions offering investments and parents all over have set out to figure out what makes Millennials tick. But why are Millennials so difficult to understand in the first place?
Well, the concept of a generational gap is certainly not new. Children rarely see eye-to-eye with their parents and the tendency to rebel seems to be a relatively consistent characteristic of youth. The desire of younger generations to act in contrast to their elders is probably as old as the tendency of parents to use the fact of being parents as leverage over their children in arguments.
The difference today is the scale of the generational gap between Millennials and past generations. In our rapidly changing, tech-fueled world, younger people who have always enjoyed unlimited communication and access to information have naturally developed unique generational characteristics in strike contrast to their elders. Even when the other generations try adopting Millennial ways, the gap between Millennials, their parents and other such “Aunt Hillarys” of Facebook usually remain clear to all of those involved.
Millennials constitute the largest living generation in the US, specifically consisting of people born between 1981 and 1997 (elsewhere between 1980 and 2000). As a very diverse generation, Millennials share much less in common with each other than old-timers may think. In fact, the most distinctly Millennial characteristics are those related to socioeconomic factors, which may explain some of the unfair characterizations of Millennials as lazy, sheltered or financially irresponsible. Beyond socioeconomics, however, Millennial politics are complicated, their loyalties are fickle and they embrace social change. All of these factors make it difficult to generalize about Millennials as a whole.
But even the largest and most diverse generation cannot get away from its own brand loyalties - fickle as the generation may be. Despite it being more difficult to come by than with past generations, a distinctive feature of brand loyalty among the Millennial generation is that it tends to be heavily based on social factors. In other words, Millennials like brands because other Millennials like them.
And since Millennials like certain brands and companies because other Millennials like them, the argument can be made that these company and brand loyalties are actually more constant than their behaviors and habits, and thus easier to analyze than they are themselves. In other words, maybe Millennials don’t actually know what they like until they see it - or until other Millennials show them what they should like. Rather than describing Millennials, let us thus describe Millennial-approved companies in contrast to those approved by past generations to see what they reveal about Gen Y and its future.
Since Millennial company loyalty is heavily based on social factors, it should come as no surprise that many companies favored by Millennials have a social component which promotes Millennials interacting with each other. For example, in contrast to their parents and grandparents, Millennials would prefer to “share” a ride rather than “hire” a car or taxi. They’d prefer to “crash” on a couch or live with another person rather than get a hotel room. Throw a good phone app into the mix and it is easy to see how companies like Uber, Lyft, Couchsurfer and Airbnb have found their places in today’s economy.
But why are Millennials so quick to share rides and space instead of hiring taxi services or renting hotel rooms? Are Millennials less interested than previous generations in car ownership and privacy? What came first? The chicken Millennial who was afraid of committing to his own car or the egg-heads who developed the Uber app?
In the past, some sought to explain low levels of car ownership among Millennials by ridiculing the generation as “[N]arcissistic. Apathetic. Pampered” – and this was despite recognizing Millennials’ financial woes! But the truth of the matter is that Millennials do want to buy cars as much as past generations. Studies show that as economic conditions improve, so do plans for car ownership among Millennials as well as the next generation of Gen Z’ers. A corresponding trend is predicted with home ownership.
The sharing economy instead demonstrates that the Millennial generation is uniquely adaptable to the realities of its time. Despite the aforementioned social aspect of ride-sharing, the actual single-most important factor dictating whether Millennials will try a new product or service is its value and price. This suggests that the sharing economy is not something which Millennials like for its own sake but that it is rather a response to the economic hardship which they have experienced as a generation.
Though participants in the sharing economy have been proven to be more open and less risk-averse, the reasoning behind this seems clear when you also consider that they are only “more willing than the average person to buy other brands, switch their utility provider, and shop at another store if it means saving some time or money [emphasis mine].”
Viewed from that perspective, it certainly appears as if there is nothing especially unique about Millennials’ tendency to partake in the sharing economy over any other struggling socioeconomic group. Though Millennials demonstrate a preference for products which have a social component, it would appear that this is at least partially due to the fact that these products tend to more affordable.
Continuing on the path of explaining negative Millennial stereotypes in the context of socioeconomic factors, we should also consider the fact that Millennials are not known for their strong investment habits. And if you have been following along, you might have guessed that the limited amount of investment among Millennials is largely due to a lack of disposable income rather than a lack of desire to invest. Indeed, stereotypes about Millennials’ lack of financial responsibility ignores the fact that Millennials begin saving almost a decade earlier than was the case with the Baby Boomer generation (check out the interactive infographic below to see more millennial myths).
Economically disadvantaged people rarely have kind things to say about the more-privileged members of society, and Millennials are no different. If the presidential candidacies of Bernie Sanders and Donald Trump demonstrate anything, it’s that young people are uniting more and more under the banners which showcase either the real, or perceived, inequality and lack of fairness in today’s economic and political systems.
But despite the frustrations of young people with the “establishment,” Millennials are not necessarily willing to give up on attempting to improve their station in life through capital gains and investment. Aptly-named applications like Robinhood and Loyal3 allow Millennials to trade stocks without being charged commissions, a method which at least has the perception of being more fair to the consumer – and thus more likely to be used by Millennials.
There is even an exchange-traded fund, or a compilation of several different stocks, based on Millennial spending habits which is marketed specifically for those wishing to invest in Millennial-themed companies. The list provides some interesting insights but, ironically, one of them is that Millennials would be unlikely to invest in the fund itself.
This is because Millennials also love companies which enable them to DIY – “do it yourself.” The most obvious examples of this are the Millennial preference for companies like Home Depot and Lowe’s for assisting with home improvement. By now, you might be able to guess that the reasoning behind this is that DIY projects are usually much less expensive than hiring someone to do the work for you.
But the preference for DIY goes far beyond home improvement. Millennials are also a fiercely entrepreneurial generation, starting twice as many businesses as Baby Boomers and, on average, doing so 8 years earlier.
Likely spurred by the lack of good jobs elsewhere, and perhaps a slight distaste for the big businesses which helped cause the financial crisis, Millennials who start down the path of entrepreneurship nowadays are able to chip away at the difficulties of starting a business through the use of technology. Not only are Millennials able to acquire software and hardware at bargain prices thanks to global competition, they are able to utilize web products which were unavailable to previous generations.
If you start a business nowadays, you need not be a web designer in order to start your own website. Applications like WordPress enable Millennials and others to design a reasonable-looking website without hiring an entire web design team. For graphic designs, Millennials can take advantage of applications like Visme, which enables them to create eye-catching visuals for a fraction of the cost of hiring a graphics design team.
Even with such an individualistic pursuit as entrepreneurship, Millennials have revealed a preference for companies and brands which contain a social aspect which enables them to help each other down the path of starting new businesses. Cloud technology has enabled collaboration on a level previously unseen – allowing entire businesses to function remotely without the need for an expensive physical space. Companies like Lending Corp, Lending Tree and Kickstarter also enable Millennials to appeal directly to other people in order to get help with funding – regardless of whether the funding is directly related to a business activity.
If there is one quality universal amongst Millennials, it is simply the fact that Millennials are not a single cohesive group in strike contrast to other generations. Millennials do, or can, share the same dreams and ambitions as Baby Boomer or Gen X’ers. The difference is that, as a generation, Millennials have (quite appropriately, given their name) needed to respond to the trials of the 21st century.
Raised in a world where they’re expected to go heavily into debt in order to get through school, where they’re expected to get a “real job” despite a weak economy and where they’re sometimes scoffed at and ridiculed for trying to improve their own situation, it may ultimately come as no surprise that Millennials have found clever ways of supporting each other through companies which emphasize community and sharing. The only alternative would be to fight the losing battle for individualism and independence which is no longer as feasible as it was for previous generations.
The bottom line to be taken away from all this? Maybe the relationship between Millennials and companies themselves should also be treated more like a social contract. Millennials have it hard, but if you throw us a bone in the form of a good, affordable product, you’ll win our loyalty and that of all our friends.
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