Millennials, especially the younger half of the demographic, came of age during the Great Recession. As they entered the job market, they experienced hard financial times that limited earning opportunity for many. College graduates suffered high unemployment rates, and a large number have been forced to move back in with their parents. According to Pew Research Center, 36 percent of all Millennials live with their parents, 45 percent are unemployed, and 18 percent have a college degree.
They have learned how to make do with less discretionary income and fewer extravagant luxuries (save their technology.) As the economy has rebounded, unemployment levels have receded but attitudes haven’t exactly changed. The Millennials we surveyed still behaved with an eye on budget and on tools for finding the best deal. In short, they are extremely price-sensitive.
As franchise concepts work out an offering, this fact must remain front and center. In the current environment, there is an overabundance of choice for consumers in every category. The savviest among them all are the Millennials who will find ways to get the best deal on similar products or options.
But, the “best deal’ does not always mean “the cheapest.’ Think about the number of places you could get a hamburger today. McDonald’s has the highest awareness and is arguably the cheapest option (or at least among the cheapest and most available). But Millennials are avoiding McDonald’s in large numbers despite its more affordable offering.
In several studies we recently conducted, when asked to rank drivers in food and purchasing decisions across a number of categories, Millennials consistently selected price as their top consideration. However, in our dining-specific study, Millennials told us that quality trumps price when factoring both head-to-head; this means they are doing a more complex type of comparison to get to a ratio between price and other key factors.
Price will always be a challenging and dynamic facet of your business. The focus of Millennials on price ensures that it will become even more critical. The key is to understand the equation between price, quality, experience, and competition to offer what your Millennial customers will believe is a value worth paying to enjoy.
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