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BOSTON -- Retailers may need to change their offerings to capture the hearts and wallets of the Millennial generation, according to "Millennial Passions: Food, Fashion, and Friends," a new report by The Boston Consulting Group (BCG).
Millennials, defined as those 16 to 34 years old, are forming strong brand preferences and intentionally influencing the behaviors and brand choices of family, friends, and even total strangers.
"Millennials' impact will extend beyond generational lines," said Jeff Fromm, executive vice president at Kansas City, Mo.-based Barkley and a coauthor of the report. Millennial brand preferences and buying patterns are early indicators of trends among non-millennial consumers. Their attitudes spread quickly among their peers, then reach across generational lines. For example, non-millennials report influencing spending and brand preferences of spouses and kids; by comparison, millennials perceive their influence to be over parents, siblings, grandparents, classmates, coworkers, roommates, and even complete strangers.
"Interestingly," Barton said, "Millennials report more likelihood to broadcast negative experiences or to look for 'knockout' criteria on a brand or product online compared, for example, with non-Millennial women, who report willingness to post positive as well as negative reviews and stories."
Restaurant meals and drinks are high on the list of what millennials like to spend their money on -- ranking above consumer electronics, apparel, footwear, beauty and cosmetic products, and accessories. They eat out more often than non-Millennials (3.4 versus 2.8 times per week), regardless of their income or household composition, and they prefer fast-casual, takeout, Asian, exotic, and organic foods more than non-Millennials do. This consumer generation is also much more likely to eat out with friends and coworkers (reported by 65 percent of Millennials compared with 43 percent of non-Millennials).
Millennials visit mainstream casual restaurants but prefer fast-casual options such as Panera Bread, Chipotle Mexican Grill and Pei Wei Asian Diner. "Regardless of price point, Millennials expect a great dining experience," said Chris Egan, COO at Service Management Group (SMG) and coauthor of the report. "Affordable fast-casual and fast food restaurants with locally sourced goods, exotic flavors, and service levels historically reserved for higher-quality restaurants will most likely garner a disproportionate share of Millennial dining spending."
For restaurants, the keys to success will include faster service (along with ready-to-eat and to-go options), fast-casual formats, and happy-hour, late-night and bar experiences. Technology should also play a central role -- options such as online reservations and self-ordering systems will appeal to Millennials -- and social media will matter to restaurants as well. Further, menus themselves should include unusual, exotic, organic, or local ingredients, including "crowd sourced" options.
The report is based on a survey of 4,000 Millennials and 1,000 non-Millennials (ages 35 to 74) conducted by BCG's Center for Consumer and Customer Insight in partnership with Service Management Group (SMG) and Barkley.