Millennials. A million think pieces have parsed their buying habits and economic outlook. They’ve been accused of ruining the economy and toppling traditional norms. But is their impact so bad?
In short: no.
Yes. They are upending business norms. They are reshaping the economic landscape. They know what they want. And this is good for supplier diversity.
Because their approach to business is suffused with a bright, open worldview. One that will intrinsically benefit a diverse supply base.
First, let’s define Millennials
Much is written about millennials, the generation born between 1980-1998. They are the generation nurtured on Mr. Rogers and Sesame Street. They were raised on technology and an increasingly interconnected world. They entered adulthood in the wake of war and 9/11, and keenly felt the crash of the Great Recession. These aspects sharply shaped the millennial approach to the world. And this approach is intimately linked to how they interact with the economy.
But what does this mean for the supplier diversity landscape? Let’s take a look at three ways millennials are changing it.
1. Millennials are Upending Traditional Supplier Routes
The internet revolution has turned business interaction on its head. Millennials, connected to their smartphones, desire instant information. Above all, they want quick, efficient service and fast delivery.
As detailed in the Infographic about Millennial Shopping Habits from MergeIn, technology is a key driving factor in how they interact with business. 84% use their phone to shop in a store or to shop online sources.
39% of Millennials post reviews of products or brands, and these online and word-of-mouth reviews are vital, influencing shopping decisions and buying habits. Quality customer service is crucial, and millennials will sing the praises of products they love and support businesses that they stand behind.
The intersection between technology and supply lines connects in the upsurge of second hand stores and online rentals. In the wake of the Great Recession, Millennials are leery on the state of the economy. As such, they are 4.6 times more likely to rent products online. Rent the Runway, Spotify, and Netflix are prime, successful examples. They are also 2.3 times more likely to use sharing services like Uber and AirBNB. These new technological advances open up new business opportunities that cater to a forward-facing worldview.
2. The Generation of Socially Conscious Purchasers
Millennials are more environmentally conscious and committed to diversity. Per MergeIn:
- 48% try to use brands that support social causes
- 45% say environmental stewardship is important
Let’s call this the Mister Rogers effect. Millennials recognize the power of the dollar and they are more inclined to support businesses that demonstrate an ability to magnify the economic impact.
So, what does this mean?
According to the 2018 Deloitte Millennial Survey, millennials overwhelmingly feel that business success should be measured in terms of more than financial performance. A full 83% of respondents support a diverse business base committed to more than profit. Businesses that support supplier diversity are set to benefit from the Mister Rogers effect.
The Deloitte Millennial Survey further details overarching goals that businesses should incorporate into future strategic planning goals. In sum, corporations should balance their objectives to include:
- Making a positive impact on society and the environment
- Creating innovative ideas, products and services
- Job creation, career development and improving people’s lives
It is important to note that Millennials do not see diversity as simply demographics. Deloitte notes that Millennial definitions of diversity are broad-based and include:
- Tolerance, inclusiveness and openness (18 percent)
- Respect and an acknowledgment of the individual (17 percent)
- Different ideas or ways of thinking (14 percent)
For businesses to truly set themselves up for the demands of the next generation, businesses must commit to diversity, corporate social responsibility, and support environmental concerns. Millennials know how to use the internet, they know how to connect, and they will use their pocketbooks e-wallets to send a message.
3. Millennials Are Diverse, So Their Businesses Are Diverse
The drive for diversity extends beyond purchase into the boardroom. The Deloitte study states that “diversity/inclusion and flexibility are important keys to keeping [Millennials] happy. Many respondents, especially in emerging markets, view the gig economy as an attractive alternative or adjunct to their jobs.”
The gig economy and entrepreneurship rates are rising amongst Millennials, especially amongst women and people of color. According to Forbes, demographics in the United States are becoming more diverse, and as they do so, it opens up opportunity within traditionally underserved populations. Studies suggest that upwards of 40% of new businesses are started by women. Latino-owned businesses account for 20% of all new entrepreneurs. These businesses are reflective of the millennial mindset, and a reflection on the new demographic makeup of the United States.
Diversity isn’t the only driving factor in new business creation. The ghost of the Great Recession hovers over new entrepreneurs and plays a key role in both barriers to entry and business creation. Per America's Small Business Development Centers (America's SBDC) Survey:
- 59 percent of Millennials say that with the right idea and resources they would start a business within the next year
- 61 percent of Millennials believe that the best job security comes from owning your own business
- 45 percent of Millennials say access to capital is the biggest barrier to starting a business
Ultimately, entrepreneurship drivers include a desire for wealth creation, job security, and supportive corporate responsibility initiatives seen as lacking in the traditional business model.
What does this mean for supplier diversity?
It remains to be seen. Truth be told, companies in the supplier diversity market have a ready, waiting pool of potential employees, business partners, and customers willing to support new ventures. Commit to diversity, and you can win over the Millennial marketplace.
How has your business been affected by the changing landscape?