Studies have consistently shown that today’s consumers are demanding more from brands, and expect corporations to use their business to do good for society.
According to APCO data, of all generations, millennials—currently between the ages of 23 and 38—are more likely to care about a company’s social (61%) and environmental (62%) impact when compared to the Gen X-ers (52% and 56%, respectively). But these social responsibility-driven consumers have not yet hit their peak earning and spending years, which is between 45 and 54 years old, according to the Bureau of Labor Statistics.
As millennials enter their peak spending years in the next 10 to 15 years, what must companies do now to prepare for this highly critical and informed generation? Here are three things to consider as companies prepare for the spending rise of this generation.
1. Know the ins and outs of the company’s social & environmental footprint.
If Baby Boomers and Generation X were the ones to start reading nutrition labels, today’s millennials are the ones reading a company’s environmental or corporate governance report. APCO data shows that at least two out of three millennials pay close attention to companies’ employment practices, supply chain practices and human rights record, whereas approximately half of the older generations pay attention to the same issues. Companies and industries that have evaded scrutiny of their social or environmental footprint must be prepared for the day when disclosure of such information is not only commonplace, but required.
2. Be prepared to be the best “brand” everywhere.
Expectations for companies “to do the right thing for society” often follow them across borders and cultures. APCO’s Five Acts of Corporate Advocacy, a survey among the most informed and influential American consumers, found that 88% agreed that companies should sacrifice short-term financial gains if they are incompatible with the company’s values. Companies must balance growing their business in new markets with meeting consumer expectations to not turn a blind eye to critical issues facing the world, such as human rights abuses and climate change.
3. Protect the license to operate.
Millennials, being the second largest generation in the country, will continue to have a growing influence on the country’s politics. According to APCO data, millennials—especially those paying close attention to what corporations are doing—are more likely to support a political candidate because they want to change the way a corporation or industry operates. According to Pew Research Center’s report on the 2018 mid-term election 6% of the House of Representatives, or 26 members, are Millennials—this number is sure to increase in the coming year suggesting that Millennials will soon be the front runners in Congress and will be bringing their critical viewpoint to the table for discussion.
To be prepared for tomorrow, companies need to build their reputation equity with this group and the only way to do this is by being authentic. Companies need to act now by paying attention and showcasing their support for social causes.