Yesterday afternoon I told you about Brandless, a company where you can buy anything from tissues to kitchen towels and hand soap all for $3. The objective of my presentation was to share the companies that are successfully reaching millennials through revolutionary business models; a task that has been proven to be challenging for big brand labels. When I say big brand, I’m talking about Coca-Cola, Starbucks, Lululemon, John Deere; companies that have been pouring millions into marketing and building brand awareness. The one issue is; millennials don’t care what that label says, they want an authentic product that offers value and efficiency.
Before I get redundant and you click back on this page, the purpose of this blog post is not to summarize my presentation (sorry for those looking down on their computers when I was presenting ;)), the purpose of this blog post is to provide greater insight into the research behind the thesis of my presentation; big brands are struggling to reach their younger consumer.
Millennials consist of anyone born between 1977 and 2000. They make up 25% of the U.S. population and are projected to contribute over a trillion dollars in direct buying power, while largely influencing older generations. Essentially, reaching millennials is vital for a product or service to succeed.
This generation gravitates towards brands that stand for more than the bottom line; they want to be a part of the community with 37% of millennials “saying they are willing to purchase a product or service to support a cause they believe in. Even if it means paying a bit more” (Who).
SO, what does this mean for marketing? Millennials are completely disrupting the old practices that consist of deceiving the consumer, building brand awareness and the concept of a customer base solely built around a label.
CMO’s positions are in jeopardy as Coca-Cola fired their CMO in May 2017 without any consideration for a replacement. Instead, they shifted their position to CGO, chief growth officer, who’s role will revolve around “focusing on consumer needs” (Andrew) in order to ensure “long-term revenue growth and company success” (Andrew). For Coke specifically, the move was part of a conscious shift to a consumer-centered company. It seems the primary issue with CMO’s is their inability to adapt to a marketing strategy that revolves around the concept of a digitally maturing organization. As I spoke to in my presentation, Goldman Sachs research states the new business model that millennials are demanding revolves around online migration. It’s no longer just the pipeline, it’s the platform too; and more often than not, the platform becomes more relevant than the pipeline.
Consumer experience is now about creating that connection, trust and loyalty while offering that value, efficiency and authenticity. Unfortunately for the CMO’s, the burden to adapt themselves as well as the company, is typically put on their shoulders. They are depended on for making that change within the company. Forrester Research projects that 30% of CEO’s may fire their CMO in 2017 for “lacking the skills necessary to pull off digital business transformation” (Melnick). As I shared in my presentation, mobile adaptation is especially vital for companies trying to sell their product today.
Take Dollar Shave Club as a leading example. They do not have a retail store; the start to finish interaction with the consumer happens directly online. Furthermore, they have improved and expanded on this model by setting up a reoccurring subscription that provides seamless, yet consistent interaction with customers. With DSC, consumers are skipping the retailer (Target, CVS, etc.) in order to efficiently obtain the product they want.
At the end of my presentation I was asked a question and it has stuck with me since. The question was whether clothing companies, i.e., Nike, Lululemon will have to digitally transform as their clothing swarms Boston College’s campus and they seem established enough to not have the burden of digitally adapting. I answered the question by addressing that retail industry is declining as a whole; stores are struggling to get the consumers into their stores to buy clothing, but that was not enough for me. I decided to research as a follow up and here is what I found: the trend is selling clothing directly to consumers. Why would you go to a department store to buy a shirt for $60, when it cost $7 or $8 to make? This rhetorical question is primarily why department stores are stressing.
My newest answer to your question is that established apparel brands, such as Nike and Lululemon, while they have such reach with their consumers, should follow the direct to consumer model, lower their prices to better match the production cost, while developing technology through augmented reality (AR), in order to efficiently reach consumers through digital platforms.
Ari Bloom, CEO of Avametric, a technology company that enables brands to deliver 3D renderings of their apparel and accessories says that this AR technology benefits both the consumer and the enterprise. A typical timeline for companies sketch to store is about 40 weeks. With this technology, companies can internally negotiate over the sketch, design, and see how profitable it is with their consumer, ultimately getting the apparel on the market to their customers much faster.
In conclusion, the millennial generation is not one that has been seen before, and it is disrupting the marketing role and several industries as it craves an efficient product with ensured value and authenticity.
Andrew, Debra. “Chief Growth Office: Description and Overview.” Fractional CMO, Marketri, 16 July 2015.
Melnick, Sam. “Five Lessons for All Marketers From the Departure of Coke’s CMO.” MarketingProfs, Marketing Profs LLC, 12 May 2017.
“Who Are Millennials.” Millennial Marketing, 2017 Millennial Marketing, 5 Oct. 2017.