The Kids Are Overrated - Sucharita Mulpuru

For: eBusiness &
Channel Strategy
Professionals
The Kids Are Overrated: Dont Worry

About The Millennials
by Sucharita Mulpuru, June 1, 2015
KEY TAKEAWAYS
Educational Debt Is Crushing Customers Under 25
Since 1973, young shoppers under the age of 25 have been spending less money on
consumer goods. At the same time, their spend on education has increased sevenfold.
These challenges pose difficulties for companies targeting Millennials and makes a
persuasive case for those that dont to ignore them for the time being.
Big-Spending Boomers And The Wired Retired Are Huge Attractive Segments
While addressing older shoppers is often perceived as less sexy, they are a larger segment
of the population than those under 35 and have significant disposable income. They are
already spending more on shopping than young shoppers. eBusinesses that explicitly
and effectively target Boomers are best positioned to thrive into the next decade.
Lifetime Value Is Fleeting Because Retail Is So Competitive
Retail is more competitive than ever, with more physical and web stores now than in 2000.
At the same time, consumers are often willing to try new things, and the availability of
greater choice and cheaper goods means that few retailers are able to hold on to
customers for very long without significant investments in their products or promotions.
Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA

Tel: +1 617.613.6000 | Fax: +1 617.613.5000 | www.forrester.com
FOR EBUSINESS & CHANNEL STRATEGY PROFESSIONALS
JUNE 1, 2015
The Kids Are Overrated: Dont Worry About The

Millennials
Why eBusiness Pros Risk Missing A Bigger Prize
by Sucharita Mulpuru
with Carrie Johnson and Laura Naparstek
WHY READ THIS REPORT

It is human nature to be fascinated by youth. History has the exploits of Ponce de Leon and his search
for the fountain of youth dating back to the 16th century. Even today, retailers are obsessed with young
consumers and their interests, proclivities, and spending habits. Misleading media and hype lead
eBusiness executives to believe that these changes are somehow different from anything thats happened
before, and that they must address these generational variances immediately or perish. That perception is
misguided at best, false at worst. This report is a follow-on report to The Future Of Shopping and will
dive deeper into why Millennial dollars are difficult to attract and why eBusinesses should consider other
demographics over Millennials.
Table Of Contents
Notes & Resources
2 Headlines About Millennials Are Misleading
Forrester interviewed Abercrombie & Fitch,

Alex And Ani, Deloitte Digital, FutureCast,
IBM, Razorfish Global, SapientNitro, and
Urban Outfitters, and used data from the
United States Bureau Of Labor Statistics and
the US Census to write this report.
Myth 1: Technology Makes Millennials

Fundamentally Different From Other
Generations
Myth 2: Millennials Have Fundamentally
Different Tastes And Habits
Myth 3: Millennials Are Headed For Economic
Catastrophe
Related Research Documents

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2014 To 2019 (US)
12 There Is No Such Thing As A Customer For

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The Future Of Shopping
13 Sixty-Five Is The New 45: Older Shoppers

Are Big Spenders
The State Of Retailing Online 2015: Key

Metrics, Initiatives, And Mobile Benchmarks
Older Shoppers Should Be More Attractive To

Most eBusiness Professionals
RECOMMENDATIONS
14 Dont Fret If Your Business Isnt A Millennial

Magnet
16 Supplemental Material
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purchase reprints of this document, please email clientsupport@forrester.com. For additional information, go to www.forrester.com.
The Kids Are Overrated: Dont Worry About The Millennials
HEADLINES ABOUT MILLENNIALS ARE MISLEADING

There is a disproportionate amount of attention dedicated to the generation called Millennials,
which we define as those born between 1980 and 2004 (see Figure 1). The reality is that the future
of retail rests in the hands of far more than just Millennials. Conclusions about this generation
often provide convenient excuses for eBusiness executives who look for explanations of share loss
or business softness. These conclusions also compel eBusiness professionals to chase hyped new
technologies that purport to be Millennial magnets. The truth is much more nuanced and here
we expose key data points to debunk three myths about the opportunities and challenges that
Millennials present.
1. Millennials are fundamentally different from other generations because of their exposure to
technology.
2. Millennials have very different tastes and habits, which is why marketers and brands struggle to
attract them.
3. Millennials are headed toward economic catastrophe because they are in unprecedented debt.
2015, Forrester Research, Inc. Reproduction Prohibited
June 1, 2015
Figure 1 Thought Leadership Papers On The Millennial Segment Are Plentiful

Highlights
Timeline
January
2015
Mind The Gaps: The 2015 Deloitte

Millennial Survey (Deloitte)
December
2014
Homes Millennials Buy (National

Association Of Home Builders)
November
2014
The Rise Of Generation #hashtag

(Bain & Company)
October
2014
September
2014
15 Economic Facts about

Millennials (Presidents Council
Of Economic Advisers)
Returning To The Nest:
Debt And Parental
Co-residence Among Young
Adults (Federal Reserve Board)
Millennials believe business must aim to improve

society while also generating wealth.
They believe business environments must
nurture individuals.
Millennials home buyers are often first-time buyers.
They are most influenced by financial factors,
proximity to work, and quality of school districts.
A third wave of short and long media streamed
and purchased online is both driven by and
attracting Millennials.
Millennials face historic unemployment and
burdensome student loans.
They get married and buy homes later in life,
are the most diverse generation, and experience
more labor market equality than ever before.
Young adults ages 18 to 31 residing with their
parents are at an all-time high of 36%.
May
2014
March
2014
January
2014
2014 Millennial Study

(Wells Fargo)
Millennials In Adulthood
(Pew Research Center)
Millennials & Entertainment
(Verizon Digital Media Services)
Millennials: Breaking The Myth
(Nielsen)
The Reciprocity Principle:
How Millennials Are Changing
The Face Of Marketing Forever
(BCG)
June
2013
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Who Are The Millennial Shoppers?

And What Do They Really Want?
(Accenture)
Four in 10 Millennials report they are overwhelmed

by debt obligations, living paycheck to paycheck,
and unable to save for the future.
Millennials are the most politically and religiously

disaffiliated generation living today.
Millennials want access, speed, quality, and
personalization.
They will abandon online media quickly if
content doesnt meet these criteria.
Millennials are a uniquely diverse generation.
They crave contact through technology.
Millennials expect brands to hear them.
Social media amplifies Millennial interactions.
Millennials often prefer to buy goods in stores.

They dont treat retailers and brands the same
as people (friends, family) on social media.
Source: Forrester Research, Inc. Unauthorized reproduction, citation, or distribution prohibited.
June 1, 2015
Myth 1: Technology Makes Millennials Fundamentally Different From Other Generations

While Millennials are different from previous generations in that some were handed PCs and mobile
phones when they were as young as toddlers, it is critical to recognize that over the last several decades,
every generation has experienced some extraordinary change during its youth that has come to
transform communication, transportation, shopping, and payments (see Figure 2). Most changes tend
to be in media, entertainment, and communications, sectors that are rapidly evolving due not to what
young people adopt but to innovations that improve lives and increase efficiency for all consumers.
What is flawed about the argument of new technologies impacting Millennials most is that:
Millennials are not the only generation to have experienced radical transformation. While
todays Millennials have grown up in an era of wildly transformative technologies like the
Internet, so did the last several generations. One could, for instance, persuasively argue that in
the retail world, container ships, which arrived only decades ago, have had at least as significant
an impact on our economies and livelihoods as the Internet has in the last two decades.
Container ships drove the explosion of cross-border trade and now touch 90% of everything.1
Two decades after the advent of the Internet, eCommerce hasnt yet cracked the 10% penetration
level in most markets in spite of driving many bricks-and-mortar stores like Circuit City and
Borders out of business.
Technology changes have not disproportionately impacted Millennials. While some
technologies like video games do tend to skew to young shoppers, many of even the oldest
shoppers have eagerly embraced the very technology changes that have marked the current
generation. The hallmark of a lasting technology change is that it in fact spans generations.
Thirty-four percent of online consumers over 65 have smartphones for instance, and 33% agree
with the statement Technology is important to me.2 Given that households over 65 comprise
22% of the US population, even those numbers mean the target tech-savvy senior market is
sizable and significantly larger than the under-25 segment.
June 1, 2015
Figure 2 All Generations Have Experienced Major Disruptive Life Changes
Color TV programs introduced

Portable radios popularized
Copy machines introduced
LP records popularized
Early days of cable TV
Credit cards introduced
First satellites launched
Passenger jets popularized
Container ships become mainstream
Age range of consumer group over time
50s
Media &
communication
Handheld camcorders popularized

Financial
CDs popularized
Retail
DVDs introduced
Digital music popularized
Transportation
WWW, VoIP, and email popularized
Peer-to-peer digital money transfers introduced
Online stock trading and banking introduced
Contactless payments introduced
eCommerce introduced
Floppy disks introduced

90s
Handheld music players introduced
Personal printers introduced
Word processors introduced
Subscription TV channels introduced
Cell phones introduced
Ethernet invented
UPC technology developed
First successful tablet device

Streaming video popularized
Smart TVs popularized
3D printers broadly available
Virtual currencies introduced
Mobile commerce popularized
Driverless cars introduced
70s
100
90
80
70
60
50
40
30
20
10
0
10s
Seniors
(b.1925-1945)
Boomers
(b.1946-1964)
Gen X
(b. 1965-1979)
Millennials
(b.1980-2004)
60s
00s
Casette tapes introduced

Digital cameras popularized
VCRs popularized
Portable digital music players popularized
Computer video games
Touchscreen mobile phones popularized
introduced
Social networks popularized
Handheld calculators invented
Digital books broadly available
80s
ATMs introduced
Commercially viable electric cars introduced
First human in space
HDTV introduced
Disposable cameras introduced
Video games at home popularized
Digital cell phones introduced
PCs and laptops popularized
Magnetic stripe credit cards
broadly adopted
GPS popularized
Note: Graph represents the age of the oldest person in each generational cohort over time.
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June 1, 2015
Myth 2: Millennials Have Fundamentally Different Tastes And Habits

The argument that Millennial tastes are unique and difficult to serve is also a fallacy. Humans have
consistently different and varied tastes by nature. Spotify and Netflix exist because they cater to the
infinite preferences of individuals, not just Millennials. While young consumers have spent less over
the last few decades, it is arguably not because their tastes have changed. Rather, they have been
forced to shift a shrinking financial pie to non-shopping expenditures. Its not that they are fickle,
but rather that theyre financially strapped and, consequently, frugal. Serving this demographic is
extremely difficult not because they use Venmo or Mic.com but because households under 25 have:
Experienced more decline in real income than any other age group. A decline in real
income inhibits the amount that consumers are able to spend, and this fact has affected young
consumers more than any other group. In 2013, households under 25 had only 82% of the
purchasing power that they did in 1973 (see Figure 3). Furthermore, of total shopping spend in
the US, households under 34 comprise significantly less of the total than they did forty years ago.
They made up 28% of the total in 1973 and only 21% in 2013 (see Figure 4).
Declined as a percent of the total population. While real incomes are lower for younger
consumers, retailers face another challenge: a smaller youth population, a global condition also
reflected in other developed markets like Japan and Germany. Households under 25 comprised
9% of total US households in 1973 but were only 7% of the population by 2013.
Spent significantly more on education. Student loans and educational debt are an albatross
around the necks of young consumers. Young households have shifted more to educational
expenses than any other category. As a result, young consumers have less to spend on categories
like food, cars, and entertainment. In 1973, education expenses were a mere 1% of the wallet
share of households under 25 but ballooned to 7% by 2013 (see Figure 5).
Delayed major life decisions that generally mark adulthood. Spend on education has had
a number of other effects on the behavior of young consumers. Because this group is more
likely to be in school or saddled by educational bills, they are less likely to have achieved
the traditional markers of adulthood: car ownership or marriage. In the last four decades,
households under 25 have been less likely to own or lease cars (see Figure 6). The average
age of marriage for households under 25 is also four years older than in the past; it is now
approximately 26 and 28 for women and men, respectively, while in 1970 it was 22 for women
and 24 for men.
June 1, 2015
Figure 3 Consumers Under 25 Have Experienced A Significant Decline In Real Income

Real income indexed to 1973 dollars
1.4
1.3
65+
1.2
1.1
55-65
1.0
45-54
0.9
35-44
25-34
0.8
Under 25
0.7
0.6
1973
1984
1990
2000
2010
2013
Source: US Bureau of Labor Statistics, Consumer Expenditure Surveys

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Figure 4 Share Of Income By Age Of Household

Percentage of
Percentage of income
shopping
generated by each Percentage of spend by group Percengroup
tage
income
gain
2013
1973
2013
1973
2013 change
Percentage of
population
1973
Under
25
9%
7%
5%
3%
-2%
6%
5%
-1%
25 to 34
20%
16%
20%
15%
-5%
22%
16%
-6%
35 to 44
17%
17%
21%
21%
0%
23%
21%
-2%
45 to 54
18%
20%
24%
24%
0%
24%
24%
0%
55 to 64
16%
18%
17%
21%
+4%
15%
18%
+3%
20%
22%
12%
17%
+5%
10%
17%
+7%
65+
Note: Percentages may not total 100 due to rounding.

Source: US Bureau of Labor Statistics, Consumer Expenditure Surveys 1972-73 and 2013
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June 1, 2015
Figure 5 Education Spend As A Percent Of Total Spend

Education expenses as a percent of total spend
(Household average, inflation adjusted)
1973
2013
7%
4%
3%
2%
1%
Under 25
2%
1%
1%
25-34
35-44
3%
2%
1%
45-54
55-64
0%
65+
Note: Spend denominator includes all essential and shopping spend.

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June 1, 2015
Figure 6 The Average Age At Marriage Is Up And Car Ownership Is Down For Young Consumers
Percent of households owning or leasing cars
1973
86% 88%
89% 91%
2013
89%89%
77%
91%
83%
85%
67%
58%
Under 25
25-34
35-44
45-54
55-64
65+
Median age at first marriage by sex: 1970-2010*

29
Men
28
27
Women
26
25
24
23
22
21
20
1970
1980
1990
2000
2010
Note: For more information on the ACS, see http://www.census.gov/acs

*Source: US Decennial Census (1890-2000); American Community Survey (2010)
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June 1, 2015
10
Myth 3: Millennials Are Headed For Economic Catastrophe

While Millennials now are in worse financial shape as a group than any other generation before
them at the same age, the future isnt entirely bleak. Yes, there are many challenges that young
people face, such as paying off educational debt, but there are also reasons for optimism. Several
data points indicate that this group will catch up. Over time, we expect they will buy cars and homes
and have families like their parents, grandparents, and great-grandparents. In fact:
Incomes quickly rise when consumers enter their late 20s. Low incomes fortunately arent
forever. Marriage and education pay off and enable young households to ultimately become
financially secure. While consumers in their early 20s have the lowest average household
incomes, as those consumers age into the next cohort (25 to 34), we see their incomes rise
significantly and observe them making big-ticket purchases like cars and homes (see Figure 7).
In the next phase of their lives, they also spend more on discretionary purchases. Over the last
40 years, shoppers over 35 have consistently controlled 70% or more of all shopping spend.
Home ownership rates for young households are actually higher than ever. While life
decisions such as marriage and car ownership are generally put off by young consumers, a small
percent of consumers within the under-25 and 25-to-34 brackets are actually more likely to own
a home. This contradicts many of the fears of home retailers, who worry that young consumers
are delaying all major life purchases. This fact is often overlooked because the population of
young consumers is down, leading to perceptions of decreased home buying as well. In 1973,
only 9% of households under 25 owned their own homes but that figure increased to 14% by
2013 (see Figure 8).
Consumers are living longer lives. One major consumer trend that affects long-term spending
and makes the delay of adulthood less apocalyptic is the fact that consumers are living longer. In
fact, the delay in marriage has been less than the increase in life expectancy, which means that
consumers have longer to live, earn, and spend. The average life expectancy in 1970 was 75 for
women and 67 for men. That had increased to 81 for women and 76 for men by 2010.3
June 1, 2015
11
Figure 7 Household Income Eventually Increases For Young Households
Households (HH)
<25 in . . .
Made
average
incomes
of . . .
. . . had
. . . and had
cars at the homes at
rate of . . . the rate of By . . .
. . . HHs
25-34
made
average
incomes
of . . .
. . . and had . . . and had

cars at the homes at
rate of . . . the rate of
1973
$32,200
77%
9%
1984
$48,572
88%
48%
1984
$25,753
68%
12%
1990
$52,280
90%
44%
1990
$23,578
70%
8%
2000
$57,598
89%
46%
2000
$25,398
71%
12%
2010
$62,418
89%
45%
2010
$28,384
68%
14%
2013
$53,178
88%
40%
Note: All incomes are adjusted for inflation.

Source: US Bureau of Labor Statistics, Consumer Expenditure Surveys
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Figure 8 Overall Home Ownership Over Time

Percent of households that own homes
1973
68%
62%
2013
79%
74%
73%
69%
81%
66%
40%40%
14%
9%
Under 25
25-34
35-44
45-54
55-64
65+
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June 1, 2015
12
THERE IS NO SUCH THING AS A CUSTOMER FOR LIFE

Much of the obsession that eBusiness executives have with Millennials is because of the concept
of lifetime value. Its the notion that if you acquire a customer when he or she is young, a company
can spend less on marketing over time. Why? Because customer retention is theoretically cheaper
than customer acquisition, and young customers have decades more to spend with a brand versus
a Boomer who may only have a few years more. This is flawed, though, because the traditional
concept of lifetime value isnt always useful for eBusiness professionals as it overlooks many of the
realities of retail in the last two decades, namely:
The explosion of stores. Competition in the retail landscape is greater than ever, particularly in
the US. America has more stores per capita than any country in the world and there are nearly
twice as many physical stores in 2014 compared with the year 2002.4 While retail overall grows
at an anemic CAGR of 3%, retailers have consequently seen their sales per store plummet as
shoppers have the luxury of constantly trying new things. In fact we find the lifespans of many
stores are shorter than those of the customers they serve. Fifty percent of online consumers
agree with the statement Im always willing to try or do new things.5
The prevalence of price competition. One byproduct of greater competition is that companies
often develop different production or distribution techniques that lower the prices of goods.
This results in price deflation in a number of categories as consumers can often find comparable
items for cheaper than in the past. So even if a brand does win a shopper, there is the likelihood
that margins may still be slim. Consumers shop for price more than any other attribute and
are more likely to switch brands based on price. In fact, the only categories that seem to rely on
previous experience are cosmetics and luxury designer clothes and accessories. Consumers rely
on price for a number of everyday categories like apparel (see Figure 9).
The ubiquity of rebate-led loyalty programs. As CRM is now more commonplace at
companies, many retailers now have their own proprietary loyalty programs. While retailers
launched these programs with the intent of shifting shopper behavior to a particular merchant,
couponing and discount benefits are the key drivers of these programs. Seventy-seven percent
of online consumers who belong to loyalty programs say that instant discounts are important
to the program they join.6 This means that all loyalty programs have reactivation costs, which
means that it costs lots of money to retain even the most loyal shoppers.
June 1, 2015
13
Figure 9 Price Drives Most Categories, Even Over Experience
Past experience with the brand
50%
Cosmetics/beauty
products
45%
40%
35%
Luxury designer clothes

and accessories
30%
Personal
appliances
Footwear
Consumer electronics
25%
50%
55%
60%
Large
appliances
Apparel,
clothing,
accessories
Small
appliances
65%
70%
Price
Base: 426-602 US online adults (18+) who have purchased
the specific product in the past three months
Note: Dotted guidelines have been added to show the average value for each variable
Source: Forresters North American Consumer Technographics Retail Survey, 2014
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SIXTY-FIVE IS THE NEW 45: OLDER SHOPPERS ARE BIG SPENDERS

While young households often receive the most attention because they represent the future and
portend cool new trends, older consumers (ages 35 to 55) have significantly greater financial power.
Not only are they retiring earlier (which provides more leisure time) but they are more likely to
live independently.7 They also have enough savings to pursue expensive hobbies in their retirement.
Prudential launched an ad campaign this year that made the point that retirement is ideal for
pursuing passion projects and other fun jobs.8
Older Shoppers Should Be More Attractive To Most eBusiness Professionals
In a world where loyalty is short-lived and comes at a price, the best customers arent young shoppers
who tend to be the poorest, most frugal, and least loyal, but rather the more affluent, older customers
who may also switch brands frequently but spend much more when they do. While older consumers
June 1, 2015
14
have their own challenges (they are saddled by heavy healthcare expenses and there are few
blockbuster retail successes targeting this demographic recall Gaps failed Forth & Towne), several
data points indicate that this is an important demographic to target because older consumers:
Have experienced tremendous growth in real income. The unpopular adage that the rich are
getting richer overlooks a key fact: that the rich and the old are often the same people. Following
decades of savings and building equity in homes, older consumers have made significant
financial gains. The oldest consumer groups are the only demographic segments that have made
any gains in real income. Households over 65 have experienced a 30% gain in purchasing power
since 1973; the next younger cohort, households ages 55 to 64, has gained 11% more.
Are driving more shopping spend than ever before. Older households not only have
experienced greater household income growth but they are a larger percentage of the population
than they were in 1973. The average retirement age is also decreasing, down from more than 66
in the 1950s to less than 63 by 2000. This fact means that older consumers have more leisure and
shopping time. Economists in fact cite that retirement is generally more attractive than in the
past.9 As a result, older consumers are an enormous driver of discretionary spend. In 1973, they
comprised 25% of discretionary spend; by 2013, they drove 35% of all discretionary spend.
Are important drivers of spend in the auto and transportation industries. While a
significant amount of focus on the auto industry is on younger consumers, the truth is that
older consumers are much more likely to have cars now than younger consumers are. Eightyfive percent of households over 65 now have cars compared to 67% of households under
25. Additionally, older consumers spend more on transportation (including gas and the
ownership and maintenance of their cars): Households over 65 spent 19 cents of every dollar on
transportation-related expenses in 2013 compared to 15 cents in 1973. If gas prices continue to
stay low, this gives older consumers even more discretionary income.
R E C O M M E N D AT I O N S
DONT FRET IF YOUR BUSINESS ISNT A MILLENNIAL MAGNET

While some businesses must target Millennials because of the nature of their products, most do
not need to. When such companies do pine for twentysomethings, they resemble the desperation
of a nerdy teenager who, smitten with a prom queen, forlornly asks, Why doesnt she love me
back? eBusiness professionals should use the data from this report to launch programs to more
effectively acquire and retain customers. In addressing generational differences effectively, eBusiness
professionals must:
Embrace a conservative approach to lifetime value. Because of heavy shopper churn
and the high failure rates of merchants, eBusiness professionals cannot afford to invest
in consumers that may pay off in 50 years. They need to recognize that shopper loyalty is
June 1, 2015
15
fleeting and customers constantly require expensive reactivation programs. Merchants

need to focus on their biggest spenders now, usually Generation X and Boomers, as those
shoppers represent the greatest margin opportunity.
Segment the most promising Millennials. While much of this report is about questioning
the obsession with Millennials, the takeaway shouldnt be that all Millennials should be
ignored. Rather, it is critical to identify promising, affluent, high-spending Millennials,
particularly older ones around age 30, and to target them accordingly with compelling
messaging. Car manufacturers, for instance, need to be keenly aware of life events such as
marriage, new births and job changes, which happen increasingly to adults in their late 20s
or early 30s. At the same time, modify expectations of lifetime value, as they are also likely
to try new things and not stay loyal to your product or brand.
Be wary of overhyped technologies. Developments like phones or social networks that
span generations and cultures are much more likely to be worthy of time and investment for
eBusiness professionals. But many technologies are limited in success and reach. This isnt to
say that you should be an ostrich with your head in the sand and think old business models
are fine. Invest in global market research that keeps track of which changes truly have
traction. This type of research can highlight which types of mobile marketing or payments,
for instance, are early in the adoption cycle and which are merely flashes in the pan.
Have a competitive intelligence and market share index. As eBusiness is more competitive
than ever, it is important to not only understand if you are gaining or losing share over time
but also if your target demographic is growing or decreasing spend in your category. Such
data often requires outside research with time series data from government bureaus or firms
like ComScore. Dont hesitate to allocate funds to this, as it can help your eBusiness strategy
team figure out market trends versus factors that are within your control like merchandising
or digital execution.
Be wise in targeting older, affluent shoppers. Just because there are many older customers
doesnt mean they are eager to part with their money. These consumers are often highly
discerning and slow to make decisions on purchases. eBusiness professionals that emphasize
the investment value of purchases in categories like art, jewelry, collectibles, or even
real estate may have a leg up. Other companies may find value in partnering with such
companies on cross-sells or cobranded events. Even when executing user testing, persona
creation, or even investments like in-store pickup, consider your older shoppers.
Consider the value of diversifying. The core fundamentals of retail are being challenged,
as we discussed in The Future Of Shopping.10 Companies targeting Millennials today may

find the greatest value from investing in completely unrelated but profitable businesses.
Amazon leveraging its IT excellence to cultivate Amazon Web Services is an example.
June 1, 2015
16
College bookstores are increasingly retail landlords that sublease space to businesses ranging
from Apple to Estee Lauder to Bank of America. Education and healthcare are two areas of
growing spend that could viably make their ways into eBusinesses investment portfolios.
SUPPLEMENTAL MATERIAL
Survey Methodology
For its North American Consumer Technographics Retail Survey, 2014, Forrester conducted an
online survey fielded in April 2014 of 7,548 North American (US and Canadian) individuals ages
18 to 88. For results based on a randomly chosen sample of this size, there is 95% confidence that
the results have a statistical precision of plus or minus 1.1% of what they would be if the entire
population of US and Canadian online adults (defined as those online weekly or more often) had
been surveyed. Forrester weighted the data by age, gender, income, broadband adoption, and region
to demographically represent the adult US and Canadian online populations. The survey sample
size, when weighted, was 7,509. (Note: Weighted sample sizes can be different from the actual
number of respondents to account for individuals generally underrepresented in online panels.)
Please note that respondents who participate in online surveys generally have more experience with
the Internet and feel more comfortable transacting online.
Companies Interviewed For This Report
Abercrombie & Fitch
IBM
Alex and Ani
Razorfish Global
Deloitte Digital
SapientNitro
FutureCast
Urban Outfitters
ENDNOTES
Source: Rose George, Ninety Percent Of Everything: Inside Shipping, the Invisible Industry That Puts
Clothes on Your Back, Gas in Your Car, and Food on Your Plate, Metropolitan Books, 2013.
Source: Forresters North American Consumer Technographics Online Benchmark Survey (Part 1), 2014.
The Human Mortality Database captures births, deaths, and life expectancy over time for different
populations. Datasets are available in the following website. Source: The Human Mortality Database (www.
mortality.org).
While total nominal retail sales have grown from $2 trillion to more than $3 trillion between 2002 and 2014,
the total number of establishments has grown even faster. Retailers added nearly 1 million new physical retail
establishments in that same time frame. For more information on the untamed growth of store locations and
how that growth has changed retail over time, see the The Future Of Shopping Forrester report.
June 1, 2015
17
The segment with the highest percent in agreement was ages 25 to 34, with 66% in agreement. Forty-nine
percent of consumers ages 65+ agreed with the statement. Source: Forresters North American Consumer
Technographics Online Benchmark Survey (Part 1), 2014.
Additionally, 64% said the printable coupons were important in the loyalty programs they were part of or
thinking of joining. Source: Forresters North American Consumer Technographics Customer Life Cycle
Survey 2, 2014.
A study of Japanese citizens over 65 conducted between 1960 and 2000 found significantly more lived alone
or with a spouse in more recent years. Source: Why Population Aging Matters, National Institute On
Aging, March 2007 (http://www.nia.nih.gov/sites/default/files/WPAM.pdf).
Source: Prudential launches Chapter Two campaign; Partnership with Fashion Design House Marchesa
allows retiree to collaborate on design of red carpet dress for Hollywood celebrity, Reuters press release,
April 29, 2014 (http://www.reuters.com/article/2014/04/29/nj-prudential-financial-idUSnBw296172a+100+
BSW20140429).
An article cited in this piece notes the following: Other contributing factors are that retirement has
become a social norm and that retirement has become more attractive. Factors such as mass tourism,
mass entertainment, affordable retirement communities in locales with favorable climate (reducing the
dependence of an elderly person on his or her kin), a reduction in the cost of visiting or communicating
with family members and the expansion of social support services all have enhanced the attractiveness
of retirement. Source: Murray Gendell, Retirement age declines again in 1990s, Monthly Labor Review,
October 2001 (http://stats.bls.gov/opub/mlr/2001/10/art2full.pdf).
The retail industry is more complex than ever. Every year, startups release new technologies that promise
to help consumers shop more easily or aim to help retailers improve their businesses. At the same time,
consumers are changing. This report outlines the challenges and opportunities that eBusiness and channel
strategy professionals will need to address to grow their online and offline sales. See the The Future Of
Shopping Forrester report.
10
June 1, 2015
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For: eBusiness &

The Kids Are Overrated: Dont Worry

Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA

FOR EBUSINESS & CHANNEL STRATEGY PROFESSIONALS

The Kids Are Overrated: Dont Worry About The

WHY READ THIS REPORT

Notes & Resources

2 Headlines About Millennials Are Misleading

Forrester interviewed Abercrombie & Fitch,

Myth 1: Technology Makes Millennials

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FOR EBUSINESS & CHANNEL STRATEGY PROFESSIONALS

The Kids Are Overrated: Dont Worry About The Millennials

HEADLINES ABOUT MILLENNIALS ARE MISLEADING

2015, Forrester Research, Inc. Reproduction Prohibited

FOR EBUSINESS & CHANNEL STRATEGY PROFESSIONALS

The Kids Are Overrated: Dont Worry About The Millennials

Figure 1 Thought Leadership Papers On The Millennial Segment Are Plentiful

Mind The Gaps: The 2015 Deloitte

Homes Millennials Buy (National

The Rise Of Generation #hashtag

15 Economic Facts about

Millennials believe business must aim to improve

2014 Millennial Study

Who Are The Millennial Shoppers?

Four in 10 Millennials report they are overwhelmed

Millennials are the most politically and religiously

Millennials often prefer to buy goods in stores.

Source: Forrester Research, Inc. Unauthorized reproduction, citation, or distribution prohibited.

2015, Forrester Research, Inc. Reproduction Prohibited

FOR EBUSINESS & CHANNEL STRATEGY PROFESSIONALS

The Kids Are Overrated: Dont Worry About The Millennials

Myth 1: Technology Makes Millennials Fundamentally Different From Other Generations

Technology changes have not disproportionately impacted Millennials. While some

2015, Forrester Research, Inc. Reproduction Prohibited

FOR EBUSINESS & CHANNEL STRATEGY PROFESSIONALS

The Kids Are Overrated: Dont Worry About The Millennials

Figure 2 All Generations Have Experienced Major Disruptive Life Changes

Color TV programs introduced

Age range of consumer group over time

Handheld camcorders popularized

Floppy disks introduced

First successful tablet device

Casette tapes introduced

Source: Forrester Research, Inc. Unauthorized reproduction, citation, or distribution prohibited.

2015, Forrester Research, Inc. Reproduction Prohibited

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The Kids Are Overrated: Dont Worry About The Millennials

Myth 2: Millennials Have Fundamentally Different Tastes And Habits

2015, Forrester Research, Inc. Reproduction Prohibited

FOR EBUSINESS & CHANNEL STRATEGY PROFESSIONALS

The Kids Are Overrated: Dont Worry About The Millennials

Figure 3 Consumers Under 25 Have Experienced A Significant Decline In Real Income

Source: US Bureau of Labor Statistics, Consumer Expenditure Surveys

Source: Forrester Research, Inc. Unauthorized reproduction, citation, or distribution prohibited.

Figure 4 Share Of Income By Age Of Household

Note: Percentages may not total 100 due to rounding.

Source: Forrester Research, Inc. Unauthorized reproduction, citation, or distribution prohibited.