How Amazon Targets Millennial Parents
- by Jeff Fromm
We are experiencing an epidemic. It is affecting 11 million millennials in the United States today. What is it that is taking over so many young lives and affecting nearly every decision they make?
Millennials are becoming parents at a rapid rate. Already, nearly one in four millennials are parents, and that number is growing every day. According to research collected and shared by Wells Fargo, the average age of American’s having their first child is 26. That means that the generation we thought we had finally figured out just changed the game—again.
It goes without question that having children affects the purchasing decisions of every parent. Like generations before them, we are seeing a major shift among millennial shopping habits after having children. Before becoming parents, millennials were significantly more likely to overindex on quality of products over price. However, with parenthood comes major responsibilities that carry hefty financial weight. This has fueled a shift from a focus on quality to a focus on price and convenience among millennial parents.
This shift has turned millennial parents into active seekers. These are the consumers we see most often using deal sites like Zulilly and Groupon and utilizing their online networks to get the most bang-for-their-buck. Millennials are typically associated with brands like Apple and Whole Foods. However, after having kids their priorities shift as these new parents become more price conscious shoppers. Millennial parents now trend higher compared to the general population for shopping at places like Dollar General, Home Depot, Kmart, and Kohl’s—hardly brands typically associated with the ultra-hip young millennial generation. On the other hand, millennial parents underindex compared to the rest of the population at places like H&M, J. Crew and Sephora—places that once were almost second homes for them.
What does this mean for brands targeting this demographic?
Millennial parents may be loyal to brands, but when price and convenience desires are filled by a competing business, they are quick to move on. According to research from my firm Millennial Marketing Powered by FutureCast, before having children, one in six millennial respondents were significantly more likely to make a purchase decision for dining and entertainment based on quality rather than price. After having children that number drops to one in 11. Furthermore, on an aggregate basis—combining all categories—our respondents bought on quality over price by a 57 to 43 margin before they became parents. After parenthood, the ratio shifts to 52 to 48 as focus on quality decreases and the value of price increases.
Although studying the millennial generation may be a practice in contradictions, we know one thing to be inherently true: They are tech-savvy, digital natives. This is the first generation to have grown up almost entirely with the Internet at their fingertips, and they are utilizing that accessibility to brands in their daily lives—especially millennial parents who value all the help they can get.
Through social media, this generation is changing the way information is shared—influencing the way in which product and marketplace information is exchanged. Checking a product’s reviews is the number one reason millennial dads use their smartphones while shopping followed by using their phone to check prices (No. 2 reason) or to find nearby store locations (No. 3). On the other hand, millennial moms use their smartphones to search for coupons and deals and to compare prices. Overall, 85 percent of millennial parents use their smartphones to help them shop at brick-and-mortar retail locations and a majority of both moms (76 percent) and dads (64 percent) are likely to make a purchase with a coupon or deal they receive to their smartphone while in or near a retail location.
Amazon has quickly become the leader in the marketing to millennial parents space by connecting through a digital platform and fulfilling the low price point and convenience desires of young parents. While on the site, millennial parents can compare products and prices and search for the exact product they are looking for (everything moms and dads were using their phones for while in the brick-and-mortar store), then have it delivered directly to their door. The release of the Amazon Dash button for Prime members made process even easier. With a simple click of the button, users can quickly and conveniently order new products like baby formula, cleaning supplies and even diapers from their preset shopping carts to be delivered the next day.
The company has also created an environment in which people don’t go to shop—they go to buy. One might argue that there is a loss of impulse opportunity when your customers are only buying and not shopping, but Amazon combats that with a sophisticated recommendation system (how do they always know what I need before I need it?), as well as suggestions for items that enhance or work with the product already in the shopping cart. Again, price and convenience are the winning factors here.
Without a doubt, brands need to recognize not just the emerging numbers of millennial parents, but also their shifting consumer behaviors, if they hope to win with this new generation of parents. While quality will always play a significant role in the path to purchase, for a generation that is just learning the ropes of their new responsibilities, price and convenience will be the determining factors that fuel brand love and loyalty.