Connecting with Millennials/GenZ
Millennials and Generation Z (Gen-Z) consumers are vitally important in terms of their buying power, with Millennials comprising up to 50% of the consumer market by 2025 and Gen-Z consumers have significant influence over which direction brands will take. Companies such as Toms and Starbucks are leading in terms of their engagement with these powerful generational groups, with tactics such as social responsibility integrated into company ethos, influencer marketing, and experience marketing.
CASE STUDY 1: TOMS
- Toms, a Los Angeles-based for-profit brand, is a younger shoe company that promises to provide a free pair of shoes to a child in need for every pair sold.
- Since its inception, the company has donated 60 million shoes to those in need.
- Toms leads the market in engaging Millennials and Gen-Z consumers with its capitalization on social responsibility through its one for one donation campaign.
- 94% of Gen-Z and 87% of Millennial consumers agree with the sentiment that companies should address social and environmental issues.
- Toms has integrated this value into their company's core mission, stating that the brand's business model is one that addresses the need and "health, education and economic opportunity for children and their communities around the world."
- The brand has continued its social responsibility efforts in 2019, donating $5 million to charitable organizations with causes that are significant to Millennials and Gen-Z consumers such as Everytown for Gun Safety and March for Our Lives.
Impact on Growth
- Toms' tactic to incorporate advocacy against gun violence into its business model, while risky, has paid off in generating growth for the company which had previously stalled, with 59 billion media impressions on its new platform.
- Further, new account openings have increased 20% since last year and online sales in the U.S. are up since 2018.
CASE STUDY 2: REVOLVE
- Revolve is a Los Angeles-based fashion brand that has experienced exponential growth since its inception in the early 2000s.
- The brand relies heavily on use of influencers and high-profile events, such as music festival Coachella, to engage its consumers.
- The brand's revenue valuation is an estimated $1 billion (USD).
- Revolve has attributed its strategic influencer marketing strategy to its success in engaging Millennial and Gen-Z consumers.
- The brand uses ground-level marketing tactics such as promoting its products on 416 influencers attending Coachella, producing a pop-up shop, and encouraging influencer posts and Instagram stories of events while wearing Revolve clothing.
- Revolve touts its use of experience marketing, a newer marketing strategy that encourages relationship-building between influencers/promoters and consumers and leveraging real life experiences to advertise and promote product consumption.
Impact on Growth
- Revolve brings in an estimated $650 — $700 million in revenue each year from its influencer marketing alone.
- The brand generated 4.4 billion social media impressions using its ground-level marketing tactics at events like Coachella, 5 times that of other famous competitors such as H&M.
The research team began with searches for expertly compiled lists of the top brands of 2019 engaging Generation Z (Gen-Z) and Millennials. Without any recent, relevant hits, the research team decided to scour reputable marketing research and finance publications (e.g., Forbes, Bloomberg) to identify brand characteristics that are most important for Generation Z and Millennials. Any characteristic that overlapped between the two groups was selected and searched to identify the brands leading in that particular space (e.g., most successful brands that endorse social responsibility). The two brands that best represent the characteristics among these consumer groups with demonstrable and significant growth metrics were selected.