13 June 2019
The make-up of the world’s workforce, and therefore people with money to spend, is changing. In the US, for example, there are currently around 92 million Millennials. In just a few years, by 2025, this group of young people – born between 1981 and 2001 – will account for 75% of working people. And this generation has plenty of purchasing clout too, representing some $2.75 trillion in spending power globally.
But, as we are so often told, this generation is different. Special, even.
Buoyed by globalization and a more progressive view of a politically and economically disrupted world, Millennials tend to be more curious and suspicious than the generation that came before. They are willing and able to ask more questions, particularly of brands and the activities of companies. As such, this generation is not in the market to buy just anything.
Trust has become a form of currency in today’s retail market. Alongside this has been an explosion of interest in environment, social and sustainability issues. There appears to be an increased desire for collective action, to rid the planet of harmful practices and bring to account those that continue to pollute or cause unnecessary waste.
Today, brands big and small recognize the market potential for sustainability – not just as a way of ensuring business survival, but as a market requirement fostered by increasingly savvy Millennial consumers. Whether you’re a manufacturer, retailer or supplier, it is all about transparency.
The latest Nielsen study has it that 81% of global consumers say it is ‘extremely’ or ‘very important’ for a brand to implement programmes that will protect and improve the environment. Consumers in developing markets, such as India and Colombia, feel even more strongly, with 97% and 96% of respondents respectively saying the same.
In another report, surveys suggest 87% of millennials would be more loyal to a company that helps them contribute to social and environmental issues.
Individual consumer action is also important.73% of Nielsen respondents said they would either ‘definitely’ or ‘probably’ change their consumption habits to reduce their environmental impact. Additionally, 38% claim they would pay higher-than-average prices for products made with sustainable materials.
While there is some way to go before the majority of consumers vote with their wallets at the point of purchase – clearly sustainability is important to them.
And companies will need to keep pace in such a rapidly changing world.
They can do this by acknowledging the wider impacts of what they do as a business – and start to address what it will take to be more sustainable. IT procurement, for example, used to be a straightforward process; stick to what you know when upgrading systems and keep it simple by focusing on quality, performance and cost.
Now, sustainability needs to be a central component of any purchasing decision. Considering the environmental impacts of IT manufacture, for instance, as well as what happens when assets reach the end of their life, are now important factors in determining what IT equipment is best suited to the task in hand. In a world dominated by more environmentally-conscious employees, such considerations are becoming increasingly important to procurement strategies.
By establishing a reputation for environmental stewardship and social responsibility among customers, you will have an opportunity to build brand loyalty with a power-spending Millennial generation– a generation that continues to demonstrate increasingly less brand loyalty than the Baby Boomers that went before.