What You Think About Millennials Is Probably Wrong And Risky For Your Business

Alex Schulze is a poster boy for millennials: an entrepreneur who plays to the unmatched environmental sensibilities of Generation Y. The 27-year-old Floridian co-founded 4Ocean, which pays Pacific fishermen to collect plastic ocean waste that the enterprise makes into bracelets and sells for $20 apiece.

“It’s really a movement that we created a business around,” says Schulze, whose company stands to rake in about $50 million in its first year of operation.

But wait, maybe Stephanie McGuire is actually the face of the millennial generation. A 34-year-old legislative analyst with a one-year-old son, she and her 30-year-old husband recently moved from downtown Lansing, Michigan, to a two-story house with a yard and a white front porch in suburban Diamondale.

“Buying a house might be a dream delayed for a lot of millennials because of student debt and what the economy was,” McGuire says. “But that’s what a lot of my friends are doing once they have children.”

CEOs have long known how much is at stake with the most populous demographic cohort in American history, a collective 70-million-some shoppers born between 1981 and 1996, according to the Pew Research Center.

Some iconic companies have hit the shoals in large part because they’ve wrongly assessed millennial consumers. Harley-Davidson hobbled U.S. sales with an inability to lure enough millennials. Procter & Gamble is struggling with CEO David Taylor’s strategy of focusing on its huge existing brands over smaller, newer ones that millennials favor. And even amid a retailer renaissance in 2018, enfeebled JCPenney is flailing thanks to new clothing lines that don’t appeal to millennial women. Campbell Soup tried to bait millennials with soup in pouches and in zesty new flavors, but CEO Denise Morrison was ousted last summer in part because she couldn’t overcome the company’s association with traditional table fare in the minds of Generation Y.

“Millennials are buying bone broth in shelf-stable boxes because they think the products are better,” says Ken Harris, a long-time CPG advisor and managing director of Cadent Consulting. “Soups are doing just fine; but Campbell isn’t.”

But other companies are prospering in large part because they’ve figured out Gen-Y. Nestle is selling them the new Wildscape frozen meal-bowl brand, and startup Rind is peddling dried fruit pieces with the skins on. Ford is moving mammoth, $50,000 Expedition SUVs to millennials, while Thor Industries is getting them into recreational vehicles.

Why such varying track records? While of course millennials’ attitudes and behaviors range widely, some huge myths have grown up around their tendencies and values—the biggest of them being that millennials are unique.

“There are important differences between generations, for sure, but millennials and boomers are more alike than any of the other five generations in North America right now,” says Sheryl Connelly, Ford Motor’s futurist.

Richard Dix, CEO of home-builder Winchester Carlisle, believes that “millennials are acting very much like their parents—just in a dramatically delayed way. Their front-end life stages are much more elongated than [boomers’] were. When they take that next step and get married they tend to fall very much in line with what we look at as traditional behaviors.”

Winning CEOs in the coming decade will be able to separate fact from fiction about Generation Y and act accordingly. We examined some conventional wisdom about millennials, and found examples of how companies are making some of the right—and wrong—bets:

Millennials are all alike. Wrong.

Just as a 72-year-old boomer is far different from a 54-year-old boomer, a freshly minted college graduate doesn’t have a lot in common with a father of three kids who’s pushing 40 and has been in his career for 15 years—though both are millennials. And how they grew up may have exacerbated some of those differences.

“Someone in that first five to seven years of the millennial generation has a lot more in common with [older] Generation X than with a 25- or 26-year-old,” says James Rigney, Thor’s senior director of marketing. “So your marketing needs to double down on their particular life stage.”

Also, Generation Y was “split right down the middle by the financial crisis of 2008,” notes Ford’s Connelly. Visa Chief Marketing Officer Mary Ann Reilly adds, “You need to break them into older and younger. Older ones are more like their parents, and that really may be more of an age thing and where they’re at in their lives. They begin to have more similarities to older generations. But millennials who are 28 or younger, there’s a question whether they’re changing that way.”

Millennials love the city, hate the suburbs. Wrong.

The idea was that Generation Y would flock to old city centers like Detroit and Los Angeles and revive them, spurning the leafy exurban enclaves where many grew up. That has happened to a degree. But millennials’ migration to urban cores leveled off in 2015. In part that was because rents rose and availability of apartments tightened.

Another factor: It turns out millennials—like the generations before them—prefer suburbs for raising their children. “The oldest of them are starting their own families, at a later age than any time in U.S. history, and finding what other generations have found: that for families, suburbs are the best locale,” says Chuck Underwood, a generational-study consultant.

Dallas-based Winchester Carlisle is booming by building affordable starter homes for millennials in the suburbs of North Texas and elsewhere. “They’re a big part of the housing recovery,” Dix says. “And one way they are different is that they want more efficient homes. They want things that are more utilitarian than wasteful.”

Millennials don’t know the value of a buck. False.

After all, millennials are the Amazon Generation, shaking up traditional bricks-and-mortar retail chains from Toys R Us to Macy’s with their stay-at-home bent for e-commerce. They’re doing it for the savings as well as the convenience.

And millennials are the only generation currently increasing their use of coupons. “They grew up during the Great Recession and watched their parents live on a tight budget,” says Curtis Tingle, chief marketing officer of Valassis, a direct-mail promotion giant based in Livonia, Michigan. “They’ve gone through a decade-long recovery, but all of this made millennials the most promotionally sensitive generation.”

Meal-kit startups, one of the hot plays in the last few years, have found out painfully that millennials aren’t willing to pay through the nose just to have someone deliver a box of supper ingredients that happen to have been chopped up and portioned properly. Blue Apron and Hello Fresh are among meal-kit makers that are facing existential reversals, and Chef’d ran out of cash and suspended operations for awhile even with the high-profile backing of Campbell Soup and Smithfield Foods.

SC Johnson plays to this aspect of the millennial mindset by making sure its household-cleaning brands cover the price spectrum, not just the top tier occupied by its marques including Windex and Glade.

“You can’t just play in the premium-products segment,” says Fisk Johnson, CEO of the Racine, Wisconsin-based CPG giant. “You have to offer millennials more economic options as well, because some are very price-sensitive.”

Uniquely, also, millennials are dealing with the bulk of the student-debt overhang that has been rightly blamed for so much of their financial hesitance—and which, even amid the Trump Boom, still tremendously handicaps many members of Generation Y.

“Contrary to popular belief,” says Visa’s Reilly, “millennial women are more conservative spenders than previous generations. They’re more career-driven, but they also are concerned that they don’t make enough money.”

Millennials don’t want to own or drive vehicles. False.

Several years ago, automaker CEOs wrung their hands that millennials didn’t seem nearly as interested in owning or even driving cars—or getting their driver’s licenses, in fact—as earlier generations. Was this lack of automotive passion going to combine with a ride- and car-sharing future to pack a generational death blow to the car industry as they knew it?

Not so. It turned out that the financial constraints of the long recession hampered car ownership and driving. As Generation Y comes into its own financially, its members actually have been responsible for all new-car sales growth in 2018, according to Experian.

“Thirty-five percent of large SUV buyers are between the ages of 35 and 44,” a cohort that includes some GenXers, says Erich Merkle, sales analyst for Ford. “And as millennials age into this timeframe, there’s going to be even more of a need for three-row products.”

Spectrum Brand Holdings even sees a path to getting millennials to obsess over their cars’ appearance the way boomers do. Its Armor All brand has introduced car-exterior wipes that don’t require a hose or bucket. “Deep down, millennials have the desire to do this themselves and feel good about it,” says Jamie Kistner, vice president of Spectrum’s global auto-care division. “It’s about finding the time to do it.”

Millennials use smartphones for everything. False.

 That’s certainly how they take in and give out information, which has prompted companies to radically shift marketing that relies on social media and digital and mobile channels over old-fashioned television and print. But even with the prevalence of apps, augmented reality and artificial intelligence, millennials still want a strong human element for some services. For example, millennials’ use of traditional travel agents has increased by about one-third since 2015, according to Travel Leaders Group, a Plymouth, Minnesota-based outfit that has 52,000 agents around the United States.

“Conventional wisdom would argue that we’ve got this hyper-technology-enabled population of people who are obviously native to mobile and the Internet, so why would they possibly be interested in using travel agents?” says CEO Ninan Chako. “It turns out that the literally infinite resources online don’t help them come to decisions any better or faster. Plus, millennials want unique experiences and imagery that they can put on Instagram—and that’s where experienced travel agents are helping them.”

Meanwhile, the real estate comapny Winchester Carlisle has been astounded by this group’s demand for old-fashioned classroom instruction in the intricacies of life’s largest investment. “We offer two-hour classes on weeknights and four-hour sessions on Saturdays, and [millennials] come in and want to hear about every single aspect of the transaction,” says Tara Williams, president of the Carlisle Title division.

Millennials like only brands that convey “meaning.” False.

It’s millennials, not the Woodstock Generation, who forced brands to embrace sublime values beyond merely offering goods and services of high quality or at affordable prices. CEOs have adopted a broad mentality toward “sustainability” and other green values to satisfy Generation Y alone. However, “while millennials are more globally minded and politically active than other generations, they don’t need their brands to be,” says Jeff Cartwright, managing director of content for Morning Consult, a Washington, D.C.-based research outfit that recently surveyed millennials.

It’s true that only 25 percent of millennials surveyed by Morning Consult said they’ll buy goods or services from companies that they know have labor practices they don’t support. But only 29 percent said they avoid buying from companies with political positions different from their own.

So, brands should focus on imbuing meaning not in some politically declarative way but rather in the sense of “having a purpose and caring about [consumers] in a way that isn’t viewed as trite,” Reilly says.

That’s what Culver’s CEO Craig Culver had in mind in springing new TV commercials last summer for the line of new chicken sandwiches at the 650 fast-food restaurants owned and franchised by the Prairie du Sac, Wisconsin-based chain across the country. The ads feature him and his own daughter—a millennial mother of two—as they tour a Georgia chicken farm and talk with the owner about the quality of his flock.

Generational expert Underwood says that millennials have “no brand snobbery,” unlike boomer and GenXers, but care more about practicality and price. And because of social media, they are more able and willing to jump on brands that they like—or away from those they dislike. “They want to save the whole damned world and put their money where their values are, like boomers,” Underwood says. “But because they have unprecedented debt, they also have to be careful about their spending. They look for quality products at a good price.”

Read more: How To Lead Generations Y and Z