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Millennials are often the most overlooked yet profitable audience segments for construction. Millennials, individuals born between 1980 and 2000, are the largest living generation, surpassing the outsized baby boomer generation. There are approximately eighty million millennials in America alone, with $200 billion in annual buying power, Advertising Age said.
Unfortunately, the young generation is often unjustly saddled with their purported reputation for being noncommittal. Millennials characteristically are a disaffiliated generation. In fact, the Pew Research Center reports 50 percent of millennials identify as political independents, and 29 percent say they’re not affiliated with any religion.
As a result, it’s becoming increasingly hard for brands to connect with this generation. Consequently, fewer companies have been willing to spend marketing dollars trying to build loyalty within this “noncommittal” generation. However, construction firms are missing a motivated, largely untapped market if they turn the other cheek to millennials.
Here are four millennial trends that are leading the way in the construction industry and how to capitalize on each.
- Millennials want to buy homes.
Findings from the National Association of Realtors reveal millennials make up the largest share of homebuyers at 32 percent and account for 68 percent of first-time homebuyer purchases. This large group of consumers is poised to affect the housing market in a big way. A survey by TD Bank found just under half of millennials are expected to buy their first home over the next two years. Opportunity awaits homebuilders and realtors if they can properly engage this generation.
Because this audience segment likes to explore their options, flexibility is key to selling to this group. Millennials are empowered buyers; they rely on digital methods over more traditional approaches to research potential purchases, according to the Millennial Mindset: The Worried Well survey. To be successful in reaching this audience, you must make the search and transition from one home to the next as smooth as possible. Less hassle is crucial.
According to New Home Source Insights, national real estate websites and online search engines rank the highest sources used amongst millennial home shoppers. In fact, fifty-five percent of millennial home shoppers regularly look at listings online. However, these young people don’t wholeheartedly trust the Internet.One of the best ways to build trust is by promoting transparency. Provide 360-degree imagery and aerial views of home listings coupled with detailed product descriptions. Design websites that allow your target to quickly find the visuals they need and other useful details that can proactively answer their questions.
It is recommended that homebuilders invest more in SEO type solutions as well to maximize their online presence and search engine rankings. A larger concentration also needs to be placed on social marketing.
Millennials study social media to support purchase decisions. A study by New Home Source Insights revealed millennials are 16 percent less likely to visit a builder’s website compared to other generations, but are 45 percent more likely to trust and remember a real estate recommendation from friends and family. They seek insight from friends and industry-specific communities to make decisions. According to the latest Social Buying Study from IDC, “Online professional networks have become key in the final stages of the purchase process.” Construction companies that are most active using social media will have most influence over their buying decisions and brand perception.
- Multi-family construction continues to be driven by millennials.
Findings show that millennials are very eager to purchase their first home, however student loan debts and career aspirations are major deterrents.
The burden student debt places on millennials is a major driving force behind their partiality with studios and one-bedroom apartments. According to Forbes, “Studios and one-bedroom apartments now comprise 54.4 percent of the apartment rental market due to millennial demand.”In addition to price, location can go a long way toward attracting this important demographic. Job-hopping is a new normal for millennials. The average tenure of the workforce’s youngest employees is less than three years, according to the Future Workplace “Multiple Generations @ Work” survey of 1,189 employees and 150 managers. This shift away from employer loyalty creates a need for flexibility in housing location.This age group prefers the ability to move quickly in order to capitalize on new employment opportunities. As such, the demand for multifamily housing is expected to climb further in coming years. The quest for the urban lifestyle still holds strong amongst millennials. These renters will trade space for a high-service, high-amenity living experience.
When marketing to this generation focus messaging toward those looking to accelerate career advancement and wanting to avoid committing to a permanent address.
- Millennials shifting modes of travel.
Millennials are also reshaping the urban landscape by commuting less by car and more by bike. Fewer are interested in obtaining their driver’s license and instead turning to public transportation and biking. A survey by the Frontier Group reports a 40 percent climb in public transportation and a 24 percent increase in bike usage amongst 19-34 year olds between 2001 and 2009, which is an estimated 26 percent decrease in driving.
This behavior suggests there will be far fewer parking projects available to the construction industry. “We will be seeing change trending in the parking patterns of real estate developments,” reported PricewaterhouseCoopers, a multinational professional services network. Cities across the country will be forced to rethink the functional structure of parking lots and how to design for walkability and bikeability. City planners will do well in designing walkable communities and investing in low-cost options for transportation in order to lure this younger generation.
- Millennials spark change in restaurant construction.
Millennials want experiences when they dine out. They seek restaurants that provide a variety of options, share where ingredients came from and who made it. In fact, they will spend more on ethically sourced meats and farm-to-table experiences. This generation is comprised of sustainability-conscious, as well as health-conscious grocery shoppers. So, they favor restaurants that are ecologically conscious too.
Expect a larger sector of green restaurants to begin development in the near future. You can anticipate an increase in custom designed and renovated restaurants equipped with LEED certification. Expect restaurants that also support communal eating. A recent study by consumer research firm the Hartman Group discovered that 55 percent of millennials prefer communal tables at restaurants. Restaurants that are eco-friendly and support the communal mindset of millennials will be most successful.
Builders will need to find a way to incorporate outdoor elements with an organic aesthetic to appeal to this eco-friendly generation. Construction Informer explains, “This can be tedious for contractors, but incorporating and combining mechanical features can pay off in a big way. Open kitchens or ceilings are examples of this restaurant construction trend this year. But, plumbing or infrastructure that’s exposed needs to look flawless. That’s where great attention to detail from the contractor comes into play.”
Millennial driven trends will revolutionize how construction firms and cities plan. They are one of the largest, overlooked segments with the biggest buying potential. Knowing more about this target audience will help your company deliver a unique set of experiences that meet your target buyer’s expectations. The more you study the behaviors of millennials, the better you can manage your company’s market position in their minds. You will be able to define their expectations and desires.
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