Millennials: A New Generation of Family Values

On Saturday, I attended a wedding for the daughter of our friends. We knew the bride 10 years ago when she was graduating high school, but haven’t seen much of her in the mean time. So when the best man's toast made it clear that he expected the couple to have a family, I was startled. That simply wouldn’t have happened 20 or 30 years ago. Yet, upon reflection, the presumption seemed completely logical. Millennials are in fact showing every sign of being one of the most family-oriented generations to date.

I first wrote on this topic last July when I speculated that babies were becoming cool (What the Cool Kids Want, A Baby). The post evoked this response:

"For first-wave Millennials like myself, we were coming of age just as all the characters on FRIENDS were starting to settle down and even have babies. I think girls my age thought "Why am I going to waste a decade trying to find myself, when in the end what I'm looking for is a family?"

There's more than anecdotal evidence that a baby boomlet may be on the way. Birthrates per women reached the magical 2.1 population replacement rate in 2006 for the first time since 1971. More babies were born in 2007 than even during the height of the baby boom. Studies of values shows Millennials put having a family as a goal. According to longitudinal survey of high school students conducted by the College Board, 77% of students nationwide say “raising a family” is an “essential” or “very important” life objective. In 1977, by comparison, just 59 percent of students gave the same level of importance to raising a family.

What will Millennials be like as parents, and what does that mean for marketers? I have a few predictions:

Gen Y will be attentive parents, albeit for different reasons than the parental-attention-starved Gen X’ers who’s extreme parenting styles seem to be about making up for what they missed as kids. In contrast, Gen Y, enjoyed some of the most child-centric parenting ever known. There is every reason to think they will continue to dote on their own offspring, most likely with help from grandparents. Boomers are unlikely to back out of their kids lives now just as things get really fun. We may even see multiple generations under the same roof again, by choice and in some cases, by necessity.

Millennials will put their kids ahead of their careers.Young, well-educated young mothers and fathers, will find a way to balance their career expectations against their parental responsibilities. Millennials who have already shown willingness to decouple identity from work. (Think of the character Ryan in The Office relative to Michael for examples.). A young cousin of mine and her husband each have part time jobs in LA to ensure that someone is always home with their r 2-year old son. I would also expect young parents to leverage their expectation of job mobility to enjoy alternating periods of working and staying home, or working from home. The direct implication is that there will be more sharing of responsibilities, including shopping, cleaning and child care, putting men squarely in the target for many CPG products.

Millennials’ interest in healthful, locally produced and organic foods will accelerate. According to Mintel, interest in shopping at Farmers’ markets, in food co-ops and community gardens all jump with the presence of children. For example, 6% of households without children buy local goods at a farmer’s market and 3% at a food co-op. That jumps to 9% and 7% respectively with the presence of children.

Millennials will emphasize family experiences over material things. An emphasis on travel, learning and experiences is characteristic of their generation and a pattern they are likely to carry over into their parenting. Again, this may be a function of necessity as well as values. Whatever the reason, look for houses to be smaller and greener, toys to be fewer and family activities to be more common. When my mom was a kid, she and her family used to go to ‘family camp’, and I have recently heard several young couples say they have been doing similar things.

Millennials will evolve their use of social media to focus on their lives as parents. The need for the support of friends and community, for documenting one’s life through pictures and video and for sharing milestones accelerates with parenthood. No doubt we will see many more applications and parent-specific social media sites spring up to fill the need. Already Promo magazine and Fast Company have noted that Millennials are more likely to turn online to make her life run efficiently. According to Promo Magazine, "Gen Y moms were also more interested than their older counterparts in tools that let them create and maintain their own content." Here's what Fast Company has to say:

Age 27 or younger, Millennial Mom is the newest mom on the block, and she's the first generation to use technology to seamlessly blend work and life. Not long out of college or high school, she's facing many firsts: marriage, babies, insurance, jobs, maybe even owning a house. Hyper-connected and beyond tech savvy, Millennial Mom's world is both physical and virtual, bringing social connection and life-skills management as close as a computer or cell phone. She's busted out of previous generations' isolation challenges during those early, tethered-to-the-house years. You'll find her plugged into Myspace.com or TheNest.com, sharing worries, excitement, and ideas with her online family. Products like mythum mobile coupons and Infinity Broadcasting Visual Radio -- delivered right to her cellphone -- resonate with her values of connectivity and access, seamlessly going where she goes.

A Professor's Lament

Professors and other teachers who have the privelege of interacting with Millennials may find this amusing...

Professor to Class: For tonight's assignment, please memorize the alphabet and be prepared to recite it in class tomorrow. Any questions?

Which alphabet did you mean?

Is alphabetical order okay, or do you want some other version?

Can we use the song?

Do we have to sing? I'm not really comfortable singing in front of other people...

How long will we have? Will we be timed?

Will we need to dress up for the presentation?

I am learning disabled -- if I bring a note from the can I have extra time for my recitation?

Do you have a grading rubric?

Do you have any examples you can share of how students have done this in the past?

I have a conflict, I am supposed to pick someone up at the airport and want to know if I can recite it in your office day after tomorrow about 2:00PM?

Is this part of our grade or for extra credit?

Is there anything more I can do for extra credit?

Will this be on the final?

Sizing Up the College Market

According to the College Board, the cost of tuition at a 4-year public university doubled between 1980 and 2006. The pace of increase is accelerating with a 35% increase in the past 5 years alone. (Source: Economic State of Young America). According to the National Retail Federation, college students are expected to spend about $10.5 Billion gearing up for and attending college this year. But tuition is only a fraction of the story. According to a very cool graphic assembled this spring by Westwood College, just 19% of college student spending goes to tuition. Another 26% goes to to room and board. Where does the rest of the money go? Most goes to consumer goods and services – travel, apparel, textbooks, entertainment and ‘discretionary’. The National Association of College Stores says students spend about $750 in their college store, only $488 of which goes to textbooks and course materials.

However you size it, college, and preparing for college is big business. Department stores like JC Penney and Bed Bath and Beyond each have specific college directed efforts and there are dozens of web businesses like collegepad.com that would love to outfit your dorm. The College Board even offers a handy checklist to make sure you don’t forget the band-aids and Neosporin, much less a bottle opener or DVD player.

It's possible 2009 will see the peak for college spending. Not only has the recession put pressure on decisions about where students apply and attend, it may also alter how they go to school. According to Engage Gen Y, educators, parents and students are taking a hard look at these alternatives to expensive textbooks.

Chegg: Allows students to rent their book for class at a discount of more that 50% and have it delivered to their door. Chegg plants a tree for every book rented.

CourseSmart: Offers digital versions of traditional textbooks from some of the major publishers in the industry.

Textbook Media : Textbooks and study guides provided online through a web-based book reader, offered free to students through sponsorships from national brands.

Flat World Knowledge : An open-source textbook provider that provides online textbooks in a reader to students free of charge. Students pay for premium services.

Beyond text books, as online education becomes more mainstream, the ‘college experience’ itself, as least as I knew it with four years at college living on campus, may become the premium or luxury option, not the default. This summer, my son is taking an online high school ‘health’ course for credit from BYU.edu. If he likes it, it may shape how he thinks about college. And according to Time (July 29, 2009, "Can Community Colleges Save the U.S. Economy?"), community colleges are enjoying record enrollment surges from laid off workers and students looking to save on room and board.

Why Social Media Matters (in Less than 3 minutes)

This video by Tampa Bay agency, 22squared, is the cleverest explanation I have seen on how social media helps consumers find brands -- and how brands find consumers. While this post (my 200th!) isn't strictly about Millennials, it expresses an essential truth of Millennial marketing - what your friends think matters, and now it's far easier to know what your friends think.

Values Shift: Gen Y Sees Things Differently

There is more to this chart than meets the eye.

It is the result of a remarkable 20-year study of values by the Pew Research Center.(download entire pdf here). The latest wave of the study was conducted in April/May of 2009. This chart reveals two important findings: a decline in 'social conservatism' among specific age cohorts over time and progressively lower levels of social conservatism among each younger age cohort.

Here's how the report summarizes this chart:

"Younger age cohorts are less conservative than older ones, with Baby Boomers significantly less conservative than the Silent Generation and its predecessors, and Generation Y considerably less conservative than either the Baby Boomers or Generation X. Within age cohorts, the change over time in social conservatism is very modest, indicating that the societal change in these values is mostly a function of newer generations replacing older ones."

What that means is that Gen Y is distinct in its values from both Gen X and their largely Boomer parents. This finding was widely touted Monday, June 29, in many newspaper and online articles. Here is a sampling:

New York Daily News: "Survey shows widest generation gap among American children and their parents." A survey released Monday by the Pew Research Center shows a widening generation gap on issues ranging from religion to marriage, creating divisions not seen since generational clashes over the Vietnam War, civil rights and women’s rights 40 years ago.

Yahoo News. "Study finds widening generation gap in America." From cell phones and texting to religion and manners, younger and older Americans see the world differently, creating the largest generation gap since the tumultuous years of the 1960s and the culture clashes over Vietnam, civil rights and women's liberation.

MSNBC "Study: Generation gap in U.S. largest since ’60s." A survey Monday by the Pew Research Center highlights a widening age divide after last November's election, when 18- to 29-year-olds voted for Democrat Barack Obama by a 2-to-1 ratio.

Sounds serious! Yet, how can these headlines be reconciled with the common wisdom that Millennials get along famously with their Boomer parents? In the past, 'generation gaps' led to physical and emotional distance, but not so for this generation and their parents. Somehow, the culture wars appear to be, suddenly, over. They have apparently learned to 'mind the gap'. While they may not see eye to eye, these generations have no problem with that fact, and it's not that they are unaware of the differences in outlook; according to the Pew Study, almost eight in 10 people believe there is a major difference in the point of view of younger people and older people today.

The reason also has nothing to do with the nature of the differences or how strongly they are felt. Indeed, most said that the biggest differences concerned issues of morality, religion, and the social values surrounding lifestyle, family, relationships and dating -- hardly minor issues. Older people also cited differences in a sense of entitlement. Those in the middle-age groups also often pointed to a difference in manners.

Instead, the reason appears to have everything to do with a flourishing of 'tolerance', especially among younger people. If there is one value young adults hold above all others, it is tolerance. Apparently, this even goes for their parents.

Gen Y to Marketers: You Are Missing Your Blue Ocean

In 2005, a great business book called "Blue Ocean Strategy" challenged marketers to stop thinking incrementally and looking for 'white spaces' in which to compete. The book, now published in 41 languages urged mraketers to identify latent market needs. The authors maintained that too many marketers were playing a losing game by competing in crowded, fiercely competitive 'red oceans' when they should be looking for wide open blue waters.

Gen Y may present a remarkable blue ocean for many industries. Not only are they big, they purport to want something different and new. And many are literally begging marketers to 'think differently' about them.

Just today, Advertising Age carried an article by, Megan Meagher, a 25-year-old account planner at Taxi, New York titled "Millennials Are Evolving; Are You Keeping Up?" Megan doesn't understand why marketers aren't doing more to win over her age group, especially now when the recession has her retinking her spending priorities and brand preferences:

"I'm a changed person, thanks to this recession. I eat more meals at home and actually pay attention to the price of groceries. Living on my own for the first time, I find myself buying and using more household products, from dishwasher soap to stain remover. As a result, I'm newly receptive to advertising in those product categories. But what surprises me is how few marketers -- outside of clothes, shoe, food-and-beverage and entertainment marketers -- actually pursue my age group. I wonder why that is, when much of what I've learned about brand building in my work in strategic planning suggests that marketers that reach out to Gen Y may find that the payoff lasts decades.

In a few years my generation will be the moms and dads of the world, the major household buyers. Within the next decade, we'll be generating $2.77 trillion dollars per year. It's essential for brands to grab us now and reach out in ways we find meaningful. "

The number of marketers with explicit Gen Y appeals is fairly modest, and most tend to be from entertainment, technology or traditional youth marketing categories. For marketers in food, wine, financial services, travel, appliances, household products and for retailers, this article and others like it should be a wake up call to start sailing in the blue ocean -- before it turns red.

Millennial Wave to Hit Imported Beer and Microbrews

I've never understood why more attention isn't paid to demographics! Thanks to the remarkable efforts of the Census Bureau, we KNOW what the population will look like in 5-, 10- and 15-years (which is, by the way, the reason there is little excuse for overcrowded schools).

Yesterday, I shared SeekingAlpha's conclusion that demographics trends may be unkind to Wal-Mart. Today, I am going to share SeekingAlpha's conclusions about the impact of these same shifts on beer. According to SeekingAlpha.com, Gen Y will " undoubtedly break the beer drinking records set by Boomers in the late 1970s and early 1980s." Here is an editted version of their analysis:

"As 78 million Baby Boomers started to exit the prime 21-34 beer drinking age bracket in the early 1980s, they were replaced by a much smaller potential-beer-drinker cohort, Generation X. This led to years of flat to declining volume in the beer industry. Now, as Generation X ages out of the prime beer drinking age, it is being replaced by the much larger Generation Y. This new generation of potential beer drinkers is currently mostly age 24 and under ... and it is the largest generation in U.S. history. In 2008 alone, more than 3.8 million members of Gen Y turned the legal drinking age of 21, 100,000 more than turned 21 in 2007. Their entrance into the prime beer drinking age bracket may already be making a difference. Industry data indicates that beer consumption has been on the increase since at least 2006."

Which types and brands of beer will benefit most from the shifts? According to their analysis, first and foremost it will be the big U.S. breweries (and their foreign owners), due to their sheer volume - 80% of sales. But the biggest gains will be seen by microbreweries, which are currently just 6% of sales, but already outpacing the rest of the industry. In 2007 the growth rate of microbreweries was estimated at 12 percent, (vs. 1.4 percent for the large domestic brands and imports). In 2008, microbreweries increased volume by another 5.8 percent, and increased sales more than 10 percent.

This analysis brought to mind an email I received from Marty Predd, a twenty-something Research Associate at Brand Amplitude who recently moved to Portland, OR from Indianapolis. He shared this a few months ago when we were working on a project for an imported beer client:

"As you may know, Portland is a mecca for craft beer...we have the most microbreweries of any city in the country, and I can think of about a dozen that are within walking distance of my loft. My girlfriend and I partake regularly and I'm sure we've become beer snobs to some degree. Bars we used to love in the Midwest seem less appealing now when we visit because of their limited selection of mostly huge national beers like Bud or Miller, or mega imported brands like Guinness, Smithwicks, Heineken, etc. With the exception of PBR, which has a nostalgic status in dive bars here, I can't think of the last time we enjoyed a mega beer brand that's not based here in Portland (i.e., Widmer)."

For data geeks like me who want to learn more, Ken Gronbach of SeekingAlpha has written a book,"The Age Curve: How to Profit from the Coming Demographic Storm". I've ordered my copy already.