Take a look at some of the challenges, opportunities, and trends from industry profiles updated by D&B First Research editors in recent weeks, with a focus on how the millennial generation is creating both opportunities and challenges for many industries.
Challenge: Millennials Shun Stock Market Investment — Nearly 80% of millennials are not currently invested in the stock market, mostly due to off-putting traditional investment practices, according to a Harris Poll survey recently cited by investment management firm Nexus Global Capital. Advisers that require high minimum initial investments make millennials feel they do not have enough money to invest or that it takes more money than they have just to get started. Young investors also distrust algorithm-based trading and money management, and they believe older advisers don’t have their best interests at heart. These factors have created barriers for financial advisers seeking to build relationships with this generational cohort. Instead, millennials prefer to use technology-based applications and invest in areas that they know because of their age and the potential for huge returns over time. Some of the more popular financial planning and investing apps among millennials, according to Investor Junkie, include personal finance software apps YNAB (You Need A Budget), Personal Capital, and Mint.com; microsavings apps Acorns and Digit; and digital stock brokers LOYAL3 and Robinhood.
Industry Impact — Financial planners and investment advisers may be able to attract first-time investors and younger clients by lowering investment minimums, preparing online how-to videos, and offering apps.
To learn more about this and other industry challenges, see our Financial Planners & Investment Advisers profile.
Opportunity: Athleisure, Millennials Influence Promotional Apparel in 2017 — Athleisure apparel and millennials are expected to influence promotional apparel the most in 2017, according to Mark Seymour of Next Level Apparel, a wholesaler of promotional clothing. Seymour recently outlined several apparel trends in the Advertising Specialty Institute’s (ASI) Counselor Magazine, an industry trade publication. Popular athleisure items, which are typically worn at the gym as well as for other daily activities, include men’s tank tops and women’s jogging pants. Millennials are increasingly influencing the market as they enter the job market and join the ranks as decision makers at advertising companies and startups. Other millennials who represent key markets for promotional clothing are college students in fraternities or sororities and those on school sports teams. The decorated apparel market accounts for more than a third of all promotional products sales, according to ASI.
Industry Impact — Promotional companies may benefit from targeting millennials with a variety of athleisure apparel options.
Find more information in the Sales Promotion Services profile.
Trend: Millennial Women Navigate toward Natural Looks — Far from Generation X’s dark and mysterious Gothic look, millennial women prefer their hair, makeup, and nails to be downright natural, indicating a trend in demand likely to influence the spa industry. More than a third of young women wait three or more days between hair washes, according to an Influenster poll of more than 5,000 millennial American women. Of the 48% of millennial women who wear makeup every day, their preferred eye-shadow colors are brown (32%), nude (29%), and gray (22%). The more nondescript pink and nude were also the group’s all-time favorite shades of nail polish, at 27% and 20%, respectively. A mere 9% of millennials loved the iconic Gothic black nail polish. Spa services millennials have tried and navigate toward include face contouring, no-makeup makeup, highlighting, professional blowouts, bold brows and brow filling, beach waves, gel/shellac manicures, nail art, ombre hair, and half-up buns. An encouraging trend for spas and wellness centers that sell makeup is that half of the young women polled own at least seven lipsticks; and if millennial women were allowed to wear only one makeup product, it would be mascara (35%), foundation (14%), or eyeliner (14%).
Industry Impact — Spa and salon operators must stay up to date on the beauty habits of millennial women, as this target audience will soon determine the direction of the industry’s most popular products and services. Stocking more makeup in natural colors is likely to boost sales with this demographic.
See our Spa Services report for more on this and other industry trends.
Trend: Video Fuels Sales for Interior-Design Commerce App — A new home-décor and interior-design app is using video to reach millennial consumers and drive sales. Lux is banking on its growing vault of how-to videos to boost its conversion rate past 4%, double the average for retail shopping apps, according to AdExchanger.com. The mobile app specializes in selling quirky home goods, such as solar-powered jar lamps, that are popular among home staging consultants and high-end interior designers. The company markets home items through how-to videos that demonstrate how the products work. Millennials, a sought-after demographic, are the most active video viewers of any US age group, according to eMarketer. Lux plans to add virtual-reality shopping capabilities as well, to spur users to spring for more expensive items like furniture and outdoor equipment.
Industry Impact — Interior-design services firms should consider partnering with popular home-décor apps to create private-label collections, using video and virtual-reality technology to market products to mobile audiences.
Check out the Interior Design industry profile for more.
Trend: Boomers Buying Homes Built for Millennials — Boomers who are downsizing rather than aging in place are buying homes specifically designed to entice millennials to buy into the American dream of homeownership. D.R. Horton launched its Freedom Homes line for boomers looking for an affordable, low-maintenance lifestyle after the national home builder noted that older buyers had purchased nearly 45% of the properties intended to appeal to millennials, according to Construction Dive. Home builder Taylor Morrison and Hanley Wood have collaborated to market homes under the NEXTadventure name to the 55-plus home buyer. Based on focus-group feedback, homes will feature a large kitchen island, “super shower,” and second-bedroom “snore room,” as well as an outdoor living area with pool, fireplace, and summer kitchen. What boomers want most when buying a new home is a friendly and welcoming community that balances open floor plans and indoor-outdoor spaces with location and price.
Industry Impact — Residential real estate agents must steer both millennial and boomer buyers to properties that are affordable and easy to maintain. Builders with new homes designed specifically for these generations are more likely to offer clients the communities and features on their wish list.
For more insight into the Residential Real Estate Brokerage & Management industry, check out our report.
Trend: Millennials Opting to Buy Mattresses Online — Millennials are more interested in purchasing mattresses online than most other home furnishings products, according to Furniture/Today. New research shows that 18% of millennials bought mattresses online in 2015. Of those who buy mattresses online, 55% are looking for the best deal, while 35% want the best customer service. One in 10 of those shoppers want to see a philanthropic program associated with their purchase. Also, the buying process for these shoppers is short, with most millennials spending just one week researching before buying a mattress. Consequently, mattress retailers need to maintain a constant — 24/7 — presence in the market to capture shoppers’ attention.
Industry Impact — Millennials’ affinity for purchasing mattresses online and their habit of buying quickly make online advertising ideal for reaching consumers, while traditional print and broadcast ads are best run weekly.
To learn more about this and other industry trends, see our Furniture Stores profile.
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Tracking the moves of consumer products makers since 2003, Catherine Colbert is an industry researcher, writer, and blogger. Previously, she spent ample time in magazine publishing, technical writing, ad copywriting, medical writing, and marketing. Follow her on Twitter.