An Inside Look at Centennials

An Inside Look at CentennialsDave Bruno, Aptos

2:30 – 3:15

JUSTWhen We Thought We Had a Finger on the Pulse of Gen Y Shoppers…

WHO THEY FOLLOW

WHERE TO FIND THEM

WHERE THEY SHOP

BELIEVE IT OR NOTMillennials are already aging out of their

position as “most sought-after” consumers

But fear not. The effort and money you spent studying Millennials was not in vain.

IT WAS A WARM UP.

Meet the

Centennials

1996 2011born (roughly) between

Not just “digital” natives...“mobile digital”’ natives

They represent approximately

22% of the US Population

70Mpeople in this generation

Source: US Census Bureau

The first wave of Centennials haveReached Adulthood

14Mare age eighteen or older

Already they have impressive

Purchasing Power

$200Bby 2018

Their spending will reach

Source: Business Insider

And their influence

Extends their Reach

93%of Centennial parents say their children have some influence

on family spendingSource: Deep Focus

10%of Centennial parents say their

children influence 100% of family spending

Source: Upfront Analytics

20%of the US workforceIn just four short years, Centennials will comprise

Source: US News & World Report

PERHAPSit’s time to get to know them better

AUDIENCE POLL

How much of your customer base is made up of Centennials?

<25% 25% - 50% 50% - 75% >75% Unsure

AUDIENCE POLLDo you have a strategic marketing plan in place to study, target and cultivate Centennial shoppers?

YES NO PLANNED UNSURE

DO YOU EVEN SPEAK THEIR LANGUAGE?

BEFORE WE DIG TOO DEEP

#FOMOEveryone’s at Coachella hanging with celebs and I’m stuck in my backyard…

#PalmSprings #FOMO

BAEYou are holding my heart as well as my hand…

#MyOneAndOnly #BAE

On FleekSLAY QUEEN!!! Her eyebrows totally slay me

#LifeIsBeautiful #OnFleek

Stanning

WOO HOO!!! Just scored tix to the upcomingJustin Bieber concert!#Stanning #Belieber

Daaannng!!! This new Cap’n Crunch Frappuccino from Starbucks is TOO GOOD

#HiddenMenu #ExtraYep. That’s

a thing.

ImplicationsDeciphering shopper

feedback and sentiment is only going to get more

(and more) difficult

TECH MKTG MERCH STORE

AUDIENCE POLL

Is social sentiment analysis a meaningful part of your CRM and/or Merchandising toolkits?

YES, IN BOTH ONLY CRM ONLY MERCH NEITHER

CRM PLANNED MERCH PLANNED BOTH PLANNED

To really understand them, we mustLook Beyond Slang & Stereotypes…

HOW DO THEY THINK ABOUT MONEY?

The 2008 recession has been theirDominant Financial Event

Perhaps it’s no surprise then, thatSaving is Important

57%would rather save money than spend it immediately

Source: Forbes

even though most are still teenagers( )

They are equallyCautious About Credit

1/2the credit card debt

of college age Millennials

College-age Centennials maintain less than

Source: Money

And we have seen a correspondingReduction in Spending

31%from 1997 - 2014

US teen spending fell

Source: The Futures Company

However, spending decisions are driven by

More than Mere Price

Source: Money

Gen Z consumers cautiously weigh the practicality of purchases and critically consider the value equation of any purchase.“ Source: Ernst & Young

Spending patterns have also undergone

Seismic Shifts

I care a lot about whether my clothes are in style.“65%of teens

agreed in 1997

47%of teensagreed in 2014

Source: The Futures Company

Spending patterns have undergone

Seismic Shifts

15%Apparel share of teen wallets has fallen

Source: Piper Jaffray

in the last decade

Spending patterns have undergone

Seismic Shifts

While tech’s share has

DOUBLEDSource: Piper Jaffray

Whatever you do…Don’t Cut their Cord!

90%would be upset if they had to

give up their Internet connectionSource: JWT

76%would be upset if they had to

give up their cable TVSource: JWT

71%would be upset if they had to give up buying new clothes

Source: JWT

56%would be upset if they had to give up downloading music

Source: JWT

56%would be upset if they had to give up buying video games

Source: JWT

Relevance, value and influencing influencers are critical to achievingsustainable success.

Additionally, assortments may need to change to adapt to shifting consumer priorities

TECH MKTG MERCH

Implications

AUDIENCE POLL

Has your assortment strategy shifted to account for the growing share of wallet owned by technology?

WHEN THEY DO SPEND, HOW DO THEY SHOP?

Business as Usual

• Stores are always open• Pricing is completely transparent • Inventory is always available• Amazon can deliver within hours

Omni-channel shopping journeys:

This is all these kids have ever known.

For these smartphone natives, mobile shopping is just

Part of the Process

34%prefer to purchase

via smartphone

Source: GfK Future Buy

32%prefer to purchase

via desktop PC !

Compared to shopping in stores,

They <Prefer> Online

A Slight Majority PreferOnline in Most Categories

Sporting Goods 61%Accessories 57%Offline Games 56%Clothes 55%Shoes 55%Toys 54%Electronics 53%Beauty 51%

Source: JWT

}54%(all categories)

While they do prefer to shop online…

There is an Asterisk*

After Amazon, they generally choose sites with physical locations

Source: Piper Jaffray

AmazonNikeForever 21eBayVictoria’s SecretAmerican EagleUrban OutfittersEastbayBrandy MelvilleWanelo

123456789

Compared to Millennials…The Store Matters Much More

37%of Millennials prefer

to shop in store

Sources: Power Reviews, JWT

(vs 46% for Centennials)

Integrated shopping journeys are

Ubiquitous Behaviors

Source: Center for Generational Kinetics

100%surf the Web on their phones looking

for a better price when in a store

ImplicationsBe prepared for rapid growth in mobile purchases. User experiences must be streamlined and optimized.

While an active, engaging and vibrant digital experience is vital, effectively integrating stores presents an opportunity to build trust, enhance order size and grow loyalty (sound familiar at all?)

TECH MKTG MERCH STORE

AUDIENCE POLL

What percentage of your digital orders are transacted on smartphones today?

<5% 5% - 10% 10% - 25% 25% - 40% >40% Unsure

DO YOU KNOW WHERE TO FIND THEM?

HELPFUL HINT #1don’t waste time looking

in these places…

R.I.P.2011

R.I.P.2010

R.I.P.2006

HELPFUL HINT #2start your search online

When it comes to connectingThey Know No Boundaries

46% are actively online10+ hours a day

74% are actively online3+ hours a day

Sources: Wikia / Ipsos MediaCT

56% are actively online while in church

You think you are a Slave to Your Screen(s)?

Source: Sprout Social5Centennialsmulti-task using screens

Millennials? 21/2Source: Sprout Social

screens

Have all the screens (and all those cat videos)

Diminished Attention Spans?

30%since just 2011

Teen attention spans are down

Source: Bloomberg

Or have they instead (or perhaps also)

Sharpened their Filters?

While their options are limitless,

their time is not.

Gen Z has learned to

quickly sort through and assessenormous amounts of information.

So, despite continuous connectivity, theyPractice <Selective> Consumption

Centennials see being online as a tool for getting things done

To help filter, they typically

Rely on Each Other

And they also rely uponTrusted, Authentic Sources

10MYouTube followers

6MInstagram followers

3MInstagram followers

This selectivity may help explain the Widespread Love for Snapchat

77%of college students use

Snapchat every daySource: Sumpto

Selectivity may also help explain the Diminished Love for Facebook

14%of teens name Facebook their

“most important” social networkSource: BI Intelligence

As a rule, they are much less interested in chasing their

15 Minutes of Famethan were their predecessors

Selective | Discreet | AuthenticAndy Warhol

Discretion (and humor) may be the secret behind the

Rapid Growth of Whisper

20MJan 2016 monthly users

(2x Jun 2015)Source: International Business Times

Authenticity may shine a spotlight on thePersistent Appeal of YouTube

93%once per week

Source: Ipsos MediaCT

multiple times/day54%

Source: Ipsos MediaCT

POP QUIZ!how well do you know the YouTube

stars that Centennials love?

12Msubscribers

2.4Bvideo views

Source: VidStatsX

Growing Up Online

17Msubscribers

2.7Bvideo views

Source: VidStatsX

Comedic Lip Syncing

17Msubscribers

4.5Bvideo views

Source: VidStatsX

Humorous Gaming Commentary (???)

21Msubscribers

5.4Bvideo views

Sketch Comedy

43Msubscribers

11Bvideo views

Source: VidStatsX

Yelling Over Video Games

Oh, and “Brofists”

LET THIS SINK INFollowers of the TOP 5 YouTube stars…

Source: The Washington Post

DOUBLEall U.S. cable television viewers

NOT ONLYare they wildly popular, but they wield

Significant Influencewith Centennials

Source: Variety

$4.5M $1.3M$3.6M

Ages 13-17Scores

The recognized industry standard for measuring consumer appeal of personalities, characters, licensed properties, programs and brands.

Source: Variety

$4.5M $1.3M$3.6M

Source: Variety

AND ANOTHER THING:YouTube content has a growing

influence over purchases for (and by) kids

THE MYSTERIOUS APPEAL OF UNBOXING VIDEOS

Many YouTube “Stars”Simply. Open. Boxes.

60Mof unboxing footage was viewed onYouTube in 2015

Source: LA Times

6,850 yearsYeah. I did the math. That’s

Many, many unboxing videos are Developed for Kids

10Bvideo views

107,378,447 VIEWS“Angry Birds Toy Surprise Jake NeverLand Pirates Disney Pixar Cars2 Sponge Bob”

Now, many unboxing videos are Developed <BY> Kids

1.8Bvideo views

Source: VidStatsX

$1.3M2015 earnings

Source: Business Insider 8years old

We now fast-forward to the end of this ad.

Going Up: Fast Forward – GEICOby GEICO Insurance

Millennial Marketing? While Evan targets kids,

His Ads Target <Parents>

You can skip tovideo in 1

REALITY CHECKa couple data points to consider when

considering how to reach Centennials…

17,904,619

Evan, Mom and Sis…“Playing with Doggie Doo!!!!”

views of this single episode

America’s Pop Culture Queens

1.9Mviewers of one episode (01/24/2016 )

Source: The Nielsen Company

Social networks are far more important to this generation.

Engaging, interactive and integrated social programs are a must-have for any omni-channel strategy.

Leveraging social channels for outreach must be part of any marketing strategy.

TECH MKTG MERCH

Implications

AUDIENCE POLL

Is YouTube marketing (not just video posting) a budgeted part of your marketing strategy?

Outta Time. Gotta Dip.

An Inside Look at Centennials

Business

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