Millennials are maturing into parents, which is great news for children’s brands, grocery stores, and furniture retailers.
The generation’s spending is set to peak in the coming years, according to Morgan Stanley, and companies from Mattel to McDonald’s are clamoring for their attention.
Goldman Sachs has identified the retailers that stand to gain the most from this demographic shift.
The list includes companies like Target, Whole Foods, Wayfair, Hasbro, and Lego, and restaurants like Starbucks, Chipotle, and Wendy’s.
Alternatively, the shift will challenge companies such as McDonald’s, Kellogg, Kohl’s and Toys ‘R’ Us, according to the report.
Goldman Sachs defines Millennials as anyone between the ages of 15 and 35.
The report says the generation prefers brands that: Promote healthy lifestyles (such as organic brands like Whole Foods or fitness companies like Nike, Under Armour and Lululemon); provide instant gratification (like same-day delivery), and have a “authentic narratives,” meaning companies like TOMs and Warby Parker that appeal to Millennials through their brand “story.”
Convenience is also a major factor for Millennials, according to the report.
Starbucks is on the list, for example, because it offers parents “the convenience of a [quick-serve restaurant] and food they would not feel guilty/embarrassed to feed to their kids,” the report says. “Drive-thrus, which are in 45% of US company-owned units, are key to this — the advantage of not having to wake up a car seat sleeper or get kids in/out of a car to get a snack (or even meal) is significant, in our opinion.”
Starbucks has also been expanding its kid-friendly snack options and it’s rolling out mobile ordering, “another convenience enhancing innovation,” the analysts write.
The flash sale site Zulily also has potential to succeed because it capitalises on two emerging trends among Millennial shoppers: “Shopping as entertainment and uniqueness of merchandising,” the report says.
“Zulily has invested significantly in its mobile experience to enable mums to fill white spaces of time with a mobile-friendly user interface in a highly personalised experience with 1-click checkout,” the analysts write. “The company also merchandises the site in a ‘flash-sale’ model, enabling a fresh, new experience daily.”
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