Table of Contents
Scope and Themes
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- What you need to know:
- Data sources
- Consumer survey data
- Competitrack
- Abbreviations and terms
- Abbreviations
- Terms
- Companies mentioned in this report:
Executive Summary
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- Overview
- Student loan debt
- The economy is still weak
- Millennials are an excellent target group for FS institutions
- Social media taking on significance as a marketing channel
- Other advertising targeting Millennials
Insights and Opportunities
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- Millennials know they need advice
- More research on social media
- Millennials are well-educated and serious, but use games to relax
Inspire Insights
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- Trend: Play Ethic
- Work like an adult, play like a kid
- Implications
- Trend: Guiding Choices
- Too much choice and too little time. Consumers are looking for shortcuts.
- Implications
Market Size
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- Key points
- Millennials represent 31% of the total adult population
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- Figure 1: U.S. Adult Population, by age, 2010
- Product penetration can reach critical mass by 25-34
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- Figure 2: Ownership of financial products, by age, July 2011
The Impact of the Economy on Millennials
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- Key points
- The student loan debt bubble
- Some 37 million student loan borrowers…
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- Figure 3: Age of student loan borrowers, Q3 2011
- …owing $845 billion
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- Figure 4: Total U.S. debt balance and its composition, Q3 2011
- Rising defaults among borrowers
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- Figure 5: Total U.S. debt balance and its composition, Q3 2011
- Millennials are working for less money today
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- Figure 6: Average annual expenditures for 18-34 year olds, 2006 and 2010
- The growth in rental spending
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- Figure 7: Average annual expenditures by specific categories for 18-34 year olds, 2006 and 2010
- …and cutting back on vehicle purchases
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- Figure 8: Average annual expenditures by specific categories for 18-34 year olds, adjusted for inflation, 2006 and 2010
- More Millennials living with parents
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- Figure 9: Currently living with parent(s) or other relatives, by age, February 2012
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- Figure 10: Percent of Millennials living in parents’ home, by gender and age, 2011
- Lifestage expectations on hold due to the economy
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- Figure 11: How economic conditions have affected the lives of 18-34s, 2011
- Figure 12: Times are harder for today’s young adults, 2011
- Have the Millennials become Generation “Why Bother”?
Segment Performance
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- Key points
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- Figure 13: Ownership of mutual funds/stock accounts, by age, 2005-11
- Fewer today have credit cards
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- Figure 14: Credit Card Ownership, by age, 2011
- Figure 15: Trends in ownership of credit cards, by age, 2005-11
- P&C insurance another segment showing a loss of customers
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- Figure 16: Trends in ownership of property & casualty insurance, by age, 2005-11
- Figure 17: Trends in ownership of renters/tenants insurance, by age, 2005-11
Marketing Channels
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- Key points
- Millennials listen to financial advice from family/friends
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- Figure 18: Resources used for financial advice, by age, February 2012
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- Figure 19: Agreement with statements about financial advice, by age, February 2012
- Mobile banking, online information help drive decision-making
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- Figure 20: Reasons for choosing primary bank, by age and generation, February 2012
- For auto insurance, key channels are agents and buying online
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- Figure 21: Sources used when decided to buy insurance from current auto insurance provider, by age, July 2011
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- Figure 22: Method for last purchase of auto insurance, by age, July 2011
Mobile and Social Media Use among Millennials
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- Key points
- Social media pervasive among Millennials
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- Figure 23: Visit or belong to social sharing/networking websites, by age, 2011
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- Figure 24: Length of time involved with social sharing/networking sites, by age, 2011
- Figure 25: Frequency of usage of social sharing/networking sites, by age, 2011
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- Figure 26: Reported behaviors on social networking sites, by age, 2011
- Millennials more open to social marketing
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- Figure 27: Attitudes/opinions about brand marketing on social networking sites, by age, 2011
- And smartphones are everywhere…
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- Figure 28: Smartphone ownership, by age, July 2011
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- Figure 29: Social media activities conducted online or on smartphones, by age of Millennials, July 2011
- Figure 30: Additional activities conducted online or on smartphones, by age of Millennials, July 2011
Market Drivers
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- Key points
- Unemployment still problematic
- The bursting of the housing bubble
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- Figure 31: Median price of home, 1998-2011
- Figure 32: Private housing starts, 2000 -12
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- Figure 33: Existing home sales, 1998-2011
- More Millennials are saying “no” to home ownership
- Auto and light-truck sales turning positive
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- Figure 34: Auto and light-truck sales (in millions), 2000 – 12
Leading Companies
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- Key points
- Large firms have improved revenues
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- Figure 35: Revenues and profits of leading financial services companies, 2005 and 2010
Brand Qualities
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- Key points
- Honesty is the most important quality
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- Figure 36: Most important attributes for establishing trust in a financial services brand (strongly agree), July, 2010
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- Figure 37: Brand attributes which describe actual banks (any agree), July, 2010
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- Figure 38: Brand attributes which describe actual insurance companies (any agree), July 2010
Innovation and Innovators
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- Key points
- Credit card loyalty programs using social media
- State Farm’s Next Door
- State Farm’s Pocket Agent
- Progressive’s Flo in Sims game
- Progressive’s Image Capture
- GEICO Arcade apps
- GEICO HomeFront App
- Chase QuickPay
Marketing Strategies
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- Key points
- Banner ads and TV commercials dominate for Millennials
- Print advertising
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- Figure 39: American Family Protect Your Dreams print ad, 2012
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- Figure 40: Free Checking at Fulton Bank of New Jersey print ad, 2012
- Figure 41: E-Trade Mobile Pro print ad, 2012
- Direct mail and email advertising
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- Figure 42: Discover Card student loan direct mail ad, 2012
- Figure 43: Gerber Life Grow-Up Plan email ad, 2012
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- Figure 44: Wells Fargo mobile banking email ad, 2012
- Figure 45: American Express Link, Like, Love email ad, 2011
- Online advertising
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- Figure 46: Allstate Mayhem renters insurance online advertisement, 2012
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- Figure 47: Liberty Mutual online advertisement, 2012
- Figure 48: GEICO 15 reasons online advertisement, 2012
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- Figure 49: New Car? GEICO online Advertisement, 2012
- Figure 50: Smart App from Bank of America online advertisement, 2011
- Television advertising
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- Figure 51: Allstate “Connection” TV ad, 2012
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- Figure 52: Chase “Kicker” TV ad, 2012
- Figure 53: ING Bank “Pay Fast” TV ad, 2012
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- Figure 54: MetLife “Too Low” TV ad, 2012
- Figure 55: Progressive “It’s Flo-time” TV ad, 2012
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- Figure 56: Travelers “Keeping Up” 2012
The Consumer – Millennials and their Financial Situation
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- Key points
- Millennials are an optimistic bunch
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- Figure 57: Expectations as to improvement in household financial situation, by age, February 2012
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- Figure 58: Expectations as to improvement in household financial situation, indexed to all Millennials by education, employment and marital status, February 2012
- Unemployment is an issue
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- Figure 59: February 2012
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- Figure 60: Unemployed respondents - whether looking for a job, by age, February 2012
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- Figure 61: Employed respondents - attitudes about current employment and under-employment, by age, February 2012
- Emphasis on more savings, less debt
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- Figure 62: Attitudes about debt and savings, by age, February 2012
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- Figure 63: Agreement with statements about debt and savings, all Millennials, February 2012
- Recession babies
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- Figure 64: Attitudes about financial future, by age, February 2012
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- Figure 65: Attitudes about financial future, by short-term financial goals, February 2012
- Spending less is the key
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- Figure 66: Primary financial concerns of the household, by age, February 2012
- Student loan debt much more of a concern today than in 2009
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- Figure 67: Primary financial concerns of the household, by age, 2009 and 2012
The Consumer - Attitudes About Finances and Expectations about Lifestage Events
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- Key points
- Attitudes about money and goals compared to other generations
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- Figure 68: Attitudes about finances, by age, February 2010 – March 2011
- Lifestage goals for the coming year vs. last year
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- Figure 69: Events experienced in the last 12 months, by age, 2011
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- Figure 70: Events expected to experience in the next 12 Months, by age, 2011
The Consumer – Interest in Financial Products and Switching Banks
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- Key points
- Millennials are in the market for new financial products
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- Figure 71: Financial products currently owned, by age, February 2012
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- Figure 72: Intention to purchase financial products in the near future, by age, February 2012
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- Figure 73: Intention to purchase financial products in the more distant future, by age, February 2012
- Switching behavior higher among Millennials
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- Figure 74: Bank switching behavior in last 12 months, by age, February 2012
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- Figure 75: Reasons for switching banks during last 12 months, by age, February 2012
The Consumer – Millennials online
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- Key points
- Three quarters of Millennials online at home in past week
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- Figure 76: Usage of internet at home during the last 7 days, by age, February 2010 – March 2011
- Many bank, shop, seek entertainment online
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- Figure 77: Online activities during the last 30 days, by age, 2011
- Privacy is still a concern for Millennials
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- Figure 78: Attitudes/opinions about the internet, by age, 2011
Appendix—Trade Associations
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