Or at least thatβs what the media would have you believe.
Earlier this week, Time ran an article suggesting that Costcoβs business model β brick and mortar bulk products with paid membership tiers β doesnβt mesh well with the Millennial (18 to 34 age group) mindset. Citing Millennialsβ smaller dwellings and a lack of appeal of home ownership, cars and driving as the reason, it appears that buying in bulk is on its way out.
I took to Google for some additional viewpoints and discovered that Millennials hate banks, donβt trust Jay-Z (really?), and donβt go to church, get married, or have a political affiliation. The AARP claims that Millennials (βGeneration McNuggetβ) donβt eat chicken with bones in it. I heard a speaker recently who said that Millennials donβt wear watches because they can use their phones to check the time, and hate the idea of multiple devices.
It seems that β if weβre to believe the hype β unless youβre Apple, a skinny-jeans manufacturer, or in the organic foods business, you can kiss your growth goodbye.
In my opinion, there is a little too much speculation going on as it relates to these generational gaps. Anytime a business starts slumping, analysts look for the first sign of an outdated business model. The Time article on Costcoβs financials talks about how few βLikesβ the company has on Facebook, compared to top competitors like Walmart and Target. In a statement ripe with impact, Time says βCostcoβs Twitter page is reportedly inactive.β Allow me to respond as a true Millennial might: OMG.
But, do Millennials really wield the power to tank every business with their reported anti-consumerism? Are they really as entitled and indifferent as weβd like to believe? My bet is that theyβre just broke.
While the evidence shows that fewer Millennials are buying cars, whatβs more telling is probably the student debt. According to the Project on Student Debt, seven in 10 college seniors (71 percent) who graduated last year had student loan debt, with an average of $29,400 per borrower. From 2008 to 2012, debt at graduation (federal and private loans combined) increased an average of six percent each year.
This debt load, coupled with a weak job market, may simply mean this new generation is going straight from college to the school of hard knocks. While I canβt claim to know what the real problem is with Costcoβs earnings, I find it hard to believe it stems from a Twitter hashtag. The less complicated viewpoint is that those living paycheck to paycheck (or with their parents) perhaps lack the resources to buy Greek Yogurt by the case.
There is a definite need for some businesses to adjust their models to accommodate this giant pool of consumers (and according to Pew Research, the American Millennial count is 77 million), but I think this level of Millennial distress could stand to ease up. Should you have a website? Yes. Does your competition sell online? You might want to think about raising the bar. But as a late Millennial with a watch, a mortgage, a car, and (yes) a Costco membership, Iβd recommend you take this media frenzy with a grain of salt. In reality, we need to be sure weβre not creating scapegoats because weβre tired of talking about the effects of the Great Recession.
Are Millennials ruining your business? Leave your comments below.
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