Editor’s Note: Before the current economic crisis brought on by COVID-19, MarketCast teamed up with Dow Jones to study the relationship between Millennials and money for a series of articles published in the Wall Street Journal. While this current crisis is affecting every generation, MarketCast believes the insights uncovered about Millennials and their finances remain timely and relevant.

Millennials Are a Big Deal: By the Numbers

Savvy brands are taking a close look at their relationships with the Millennial generation – encompassing consumers who are currently 24-39 years old. There’s no mistaking the impact this large audience is already having, and no doubt that it will continue to grow in significance. Consider a few key stats about Millennials:

  • 24% of the US population as of 2019 – just behind Boomers
  • 35% of the US workforce – predicted to rise to 50% by 2025
  • $30 trillion – what they’ll inherit in the next 30 years

As these numbers suggest, establishing a relationship with Millennials is critical for any company. Their buying power and influence are steadily rising, and they are poised to reshape the landscape, similar to how Boomers before them reshaped the culture in their own image. To better understand Millennials and their impacts, we have spent a lot of time researching the beliefs and behaviors that shape their brand relationships.

In one recent study, partnered with the Wall Street Journal, we looked at the relationship between Millennials and finance. Through qualitative and quantitative research, we looked at what makes Millennials distinct – their concerns and hopes, and the preferences and habits these shape. While the study focused on finance in particular, the lessons learned can extend to brands in almost any industry seeking to establish a deeper and more lasting connection with this crucial generation.

The Millennial Mindset

Our work with Millennials consistently shows certain mindsets; this study in particular shows three key themes differentiating this generation:

  • Inner Focus: Millennials strive for self-growth and independence, prioritizing their own needs first in order to be a better colleague, friend, and parent.
  • Fulfillment: They are not willing to settle and are insistent on living a meaningful life with fulfilling jobs, pursuing their passions, exploring the world, and constantly learning to expand their minds and their lives.
  • Global Impact: They are more mindful of their global and local footprints, and they place greater emphasis on making a wider difference today, recognizing that they are a part of an increasingly global community.

What Matters to Millennials?

This mindset shapes what matters to Millennials and how they engage with the world. We found that on average Millennials were passionate about more causes than Gen X and Boomers before them, and that they felt more strongly about these causes as well. Climate change tops the list, but is closely followed by human rights, poverty, and related issues around taking care of humanity and the natural world.

“We are responsible for the maintenance and care of the earth, and all of humanity has worth, so it should be valued and cared for — I fight for social/environmental justice.”

While Millennials tend to care about a broader range of issues, their time-horizon is in some ways more limited than that of prior generations. Millennials tend to be focused on the here and now. While the future is important to them, they are rooted in the present, and seek immediate impact. This is reflected in what they prioritize – like trying to balance spending time with loved ones, a healthy lifestyle, a successful career and their desire for constant self-improvement. In turn, things that are less immediate feel less important.

Millennials and Brands

These passions, values, and perspectives converge in how Millennials engage with brands. Millennials want companies to share their values and tend to buy products from those who do.

  • 55% of Millennials state that they currently purchase things that explicitly align with their values.
  • Just over half state that they would spend more on a product or experience that shares their values, even when there are cheaper options available.

Millennials and Finance

So, how do these perspectives shape how Millennials approach the issues of finance and money? The answers are influenced by the arc of history that Millennials have witnessed in their lifetimes. The idea of a stable and secure world has been elusive for Millennials. When most were teens, they experienced the traumatic events of 9/11. Only seven years later, the great recession dampened their ability to start or develop careers. And now, Millennials are facing the health and economic impact of COVID-19, just as many of them are establishing career paths and are supporting young, growing families.

Even before this latest economic crisis, stagnating wages and student loan debt had inhibited their ability to find a financial footing and establish the foundations of financial security. These circumstances (pre COVID-19), have had lasting repercussions for how Millennials feel about the financial system at large:

  • 50% feared that the stock market would crash again
  • 4 in 10 don’t know whom to trust with their finances
  • 1/3 explicitly don’t trust financial institutions

The combination of substantial debt, lack of financial knowledge and a generally pessimistic world view means that fully half of Millennials feel overwhelmed by their financial burdens. This distrust has also created a gap in financial literacy. Millennials are not engaging with the institutions that previously would have helped them learn how finances and investing work. As a result, perhaps the most prevailing question for Millennials and finance is simply: Where do I start?

What Should Brands Do? Align with What Matters

This mindset of anxiety and insecurity creates a strong challenge for Millennials, and the brands that want to connect with them. So, how can brands – both financial and non-financial – establish better, deeper connections with Millennials? The answer is both simple and significant: Trust.

Experts ranging from social influencers to traditional wealth managers believe that trust is essential to forming meaningful relationships with clientele. For Millennials, this means emphasizing things like transparency and accountability. They place a premium on clear and reassuring communication. And, they seek out reputable and robust sources of information and guidance.

From Priorities to Practices

Our biggest finding, consistent with our previous learning about this generation turning their values into actions, is that Millennials place less emphasis on ROI than Gen X or Boomers. Instead, they prioritize investments that align with their values. This suggests that there are significant rewards for companies that can successfully tap into Millennials’ values. To do that, we suggest three best practices:

  1. Know where Millennials are in their financial journey and meet them there. There’s a lot they need to learn.
  2. Establishing trust is a must. Millennials have a fragile relationship with finance and financial institutions.
  3. Identify how your brand can authentically align with Millennial values, from the brand mission to products and experiences. Doing so may very well lead to Millennials taking concrete action to support your brand.

Again, while we surfaced these findings in connection to finance with the Wall Street Journal, they suggest a broader application that can be extended to other types of brands. Meeting Millennials where they are, building trust, and authentically aligning with their values will become ever-greater priorities as we emerge from the COVID-19 crisis and Millennials continue to gain dominance in the marketplace.

We’d love to share more about how our unique expertise and solutions can help your business move forward. Drop us a line and we’ll be in touch!