It wasn’t too long ago that millennials were graduating from college and looking for jobs. Now many of them are having kids and, once again, rewriting the rules for how and where they spend their money.
A new report by Goldman Sachs found that nearly all new mothers last year (90%) were millennials, up from 50% a decade ago.
Of course, they are expected to spend big money on their kids, making them of huge interest to marketers and companies catering to children-related products.
The surge in millennial moms comes at a time when parent spending on children continues to rise.
Moms and dads currently spend $1 trillion a year on their kids, a figure Goldman expects will grow in coming years. Raising a child from infancy through college now costs an estimated $500,000.
That huge economic clout is forcing many companies to rethink how they sell to millennials, a generation defined by Goldman Sachs as those born between 1980 and 2000.
Millennials make up nearly one-third of the U.S. population and represent the biggest segment of the workforce.
This year for the first time, millennials exceeded other generations in the U.S. labor force, reaching 53.5 million workers, according to the Pew Research Center. By comparison, Gen Xers represented 52.7 million workers and Baby Boomers represented 44.6 million.
Soon, millennials will account for most of the country’s spending and, eventually, will control most of the wealth.
So how do companies market to millennial moms – and dads?
Goldman, in its report, looked at how the generation consumes apparel, fitness and food and found that millennial parents favor companies that are authentic, meaningful, unique and innovative.
They like brands tied to social causes, such as TOMS shoes. Because they have been raised completely in a digital world, they are well-informed shoppers and place a high value on product safety and convenience.
For the small, social media-savvy startups, the opportunities created by millennials are vast, if not endless. But for many of the established corporations, the challenges can be daunting – even fatal.
While heavyweights such as Nike, Target, Hasbro and Lego are well-positioned to cater to millennials, others such as McDonald’s, Mattel and Kellogg’s are flailing, according to the report.
To attract the attention of millennials and their money companies may need to adapt or acquire new brands.
In growing group of millennial moms, many prefer locally grown, organic groceries over fast food, sodas and fries.
