The millennial marketing puzzle

Born between 1980 and 1999, millennial consumers make up the largest U.S. demographic group among the generational groups widely used by marketers. They shop quite differently than their elders, and e-retailers have to learn to relate to capture their loyalty.

The typical millennial lives on her smartphone, connects with friends and family on several social networks and has an attention span just long enough to watch a 6-second Vine video. For e-retailers, those pieces add up to a puzzling consumer who no longer follows the traditional path to purchase.

But that puzzle is becoming increasingly important to solve. The millennial generation (also known as Gen Y)—generally described as those born between 1980 and 1999, although there’s no official range—is now the largest age demographic in the United States with about 80 million consumers in its ranks, edging out even the baby boomers.

Millennials are just entering their peak spending years, but taken individually at this time they have less money to spend than young adults of previous generations. A study from Georgetown University’s Generations Initiative found that men between 18 and 29 years old in 1980 earned 85% of the median wage for all age groups. In 2012, they made just 55% of the median wage. And millennials’ median wage last year was $35,300, down 6.1% from $37,600 just in 2010, according to the Federal Reserve’s “2014 Survey of Consumer Finances.”

Having less money means millennials are pickier when it comes to where they spend their money, says millennial Christine Epps, who works as a marketing consultant. She says millennials are more loyal to themselves, rather than to brands or retailers, and the web has made it easy to search out the best price online. That can make it harder for retailers to turn a one-time customer into a repeat, loyal shopper. “Being able to read reviews and search for products on Twitter and Facebook means there’s no reason to be loyal,” she says.

But it’s important for merchants to find a way to engender loyalty among millennials because by 2018 their collective spending power will exceed that of baby boomers, according to Javelin Strategy & Research. The shift will come as boomers retire and scale back their spending, while millennials increasingly buy homes, raise children and spend accordingly. Merchants who understand that this generation’s shopping preferences change nearly as often as Facebook’s news feed algorithm, and relate accordingly, will be poised to capture repeat sales. Online retailers that target millennial-age shoppers today say the key is to speak the generation’s language and appeal to its values.

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A PayPal founder introduces a new way to pay for cash-strapped web shoppers

Many of the customers of cosmetics e-retailer Beautylish are shopping for personal use, but others are makeup artists shopping for products she plans to use at freelance gigs. That causes a cash flow issue, says Nils Johnson, Beautylish’s founder, because the customer has to pay for the product up front before she gets paid for her work.

Johnson wasn’t able to offer his own financing solution but he knew the team at Affirm, a consumer finance service, was developing a service that split payments into more manageable chunks. That service, called Affirm Split Pay, officially launches today.

Max Levchin, a co-founder of PayPal—now owned by eBay Inc.—started Affirm in 2012 to make credit more accessible to consumers. About half of the company’s senior team is former PayPal employees, but they represent just a small percentage of the company’s 32 total employees, Levchin says. Affirm now offers Split Pay, which literally splits the purchase price, plus a small amount of interest dependent on the individual consumer, into monthly payments.


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For Love & Money

It all started with a press conference and kernel of an idea. For the March 2014 issue of Milwaukee Magazine, I analyzed what the economic ramifications of same-sex marriage might be if the state of Wisconsin legalized it. What I found was a large figure, but an even larger impact.

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20 of the Most Creative Milwaukeeans: Ken Leinbach

We’re on the top level of the tower at the Urban Ecology Center’s Riverside Park branch, clear views of Downtown to the south and the new Rotary Centennial Arboretum to the west. Ken Leinbach, the center’s executive director, has just shoveled in his lunch. “When you’re up here, you get a different perspective,” he says.
He points to the northeast, to the park he built when he first started out. (“Just me and a toad in a trailer,” he jokes.) To encourage children to come from that park to the Urban Ecology building, a series of three sculptures dubbed Walk Like a River was installed.
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20 of the Most Creative Milwaukeeans: Brad Pruitt

For Emmy-winning filmmaker Brad Pruitt, it’s function over form. Although his past few projects have been documentaries – Bending Toward the Light about education and Mark My Words about spoken-word poets – Pruitt is returning to narrative for his upcoming film, Behind Closed Doors. Narrative just makes sense for this story, he says. The film follows five neighbors who live in the same apartment building in Milwaukee. It’s a film about connections and community, race and economics. The story had been developing in his mind for years.

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End of the Line

The Milwaukee County Transit System has been trapped in a budget-induced death spiral – increased fares and reduced service, leading to fewer riders and less revenue, leading to increased fares and reduced service. But it wasn’t always that way. Can an out-of-state, for-profit company resurrect the public system?

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Glitter vs. Grit

Rounding the corner, she looks ahead to a group of skaters, trying to catch up. It seems promising, but as she squats deep into the turn, a skate catches. She trips and goes down. Hard. A skater tumbles over her, and yet another over her. Four women end up tangled on the track. One gets up and screams in frustration.

But the skater who tripped is still down, lying on the track, her dark hair covering her face. She cradles her left arm. The skidding of wheels against the rough cement ceases, and the skaters take a knee. This is nothing they haven’t seen before. A few seconds pass before she extends her elbow forward, realizes her arm isn’t broken and hops up.

“Who’s the asshole who fell?” she asks with a sarcastic bite, her head dropping in faux shame.

In this warehouse space – lovingly nicknamed “The Bruisery” but undeniably unglamorous – four 20-member roller derby teams, officials and coaches gather every Sunday for scrimmages. The track is outlined with hand-applied fluorescent orange duct tape and patched up as needed. Foam-covered walls, old posters and a cement floor referred to as the “cheese grater,” for its effect on wheels, also fill the space.

But the real games – or bouts, as they’re called – are played in a different type of place, one that’s worthy of a professional matchup – the U.S. Cellular Arena.

Before these bouts, 34-year-old Anna Krajcik lays out her gear: helmet, mouth guard, elbow pads, wrist guards, knee pads, her gold knee brace from a torn ACL and, finally, gold and red quad roller skates. She meticulously crimps her hair – even the pink-tinged ends – while listening to hardcore rock, lots of Ozzy Osbourne and Rob Zombie. The last thing Krajcik does is apply thick, red makeup around her eyes, “putting on my game face,” she says.

The arena’s lights dim as the skaters are introduced, and their images are projected onto the jumbotron above the track. When Krajcik emerges, she is Grace Killy, co-captain of her team. “Grace Killy is a larger-than-life persona,” Krajcik says, “and I put her on for games.”

Thousands have gathered for this March 24 event, courtesy of their $18 tickets, and the crowd roars. On the receiving end of those cheers: Milwaukee’s own Brewcity Bruisers.

The juxtaposition between the stage makeup and bright lights of the U.S. Cellular and the grit of the warehouse practice space represents the test of modern roller derby. Since the sport’s revival in Austin, Texas, in the 2000s, it has struggled with both a perception problem and a balance between athletics and entertainment. “There was a search for its identity,” Krajcik says. And that search is ongoing. Roller derby is pushing the definition of sport, slowly catching the eye of mainstream institutions, but it hasn’t completely cut ties with its theatrical past.

Therein lies the challenge: Can derby retain its DIY spirit and punk aesthetic while gaining acceptance from mainstream sporting culture?

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Best Places to Live

When Jeff and Linda Feist bought their West Milwaukee bungalow in 1990 for about $60,000, they expected to upgrade a few years later. Twenty-three years have gone by, and the house, which today sits in the shadow of Miller Park, is still home to the family of five. But they’re finally looking to change that.

Crunching through the frozen snow in January, the Feists approached a gray colonial on a corner lot in Franklin, just down the road from the Milwaukee County Sports Complex. The house is listed at $228,900 and would be an upgrade, both in square footage – from 1,200 to 1,500 – and bedrooms – from two to three. The house also has charm, a must for Jeff.

The Franklin colonial opens to cathedral ceilings and a stone-outfitted gas fireplace. But it doesn’t get Jeff’s approval. “Dated,” he says. “I’m more or less looking at what I’m going to change right away.” Unconcerned with the purely cosmetic – like the home’s nautical theme – this pragmatic couple wants room to entertain the friends of their three sons, ages 19, 15 and 10. They want to be close to their jobs (Pick ’n Save in Hales Corners, and Kopp’s at 76th and Layton in Greenfield), and they want to continue to send their kids to private school. The Feists are about living within their means, a lifestyle reality many were forced to face when the real estate bubble burst.

But there’s still a large variable for the Feists: their bungalow. “We have an idea what we’ll be able to sell it for,” Jeff says, but “so many homes in our area have sat and sat.” One such home was a 1,300-square-foot bungalow on South 54th Street. Listed for $129,000 in May 2012, it sold for just $88,000 in September after one price reduction and more than 130 days on the market.

Still, the Feists remain optimistic while on the hunt for their new home. The discriminating couple has been looking seriously for a few months, but this one in Franklin won’t be the winner. The Feists’ agent, First Weber’s Colette Petitt, assures them the market will be flooded with new properties come spring. A thaw, of sorts. “Because the market is looking up,” she says, “I’ve been really busy meeting with people who are getting their homes ready that have been waiting for the past couple of years.”

Since the housing market crash in 2008, recovery in the metro area has been slow, but real estate agents are hopeful 2013 might be the year it regains its footing.

Home sales were up in 2012 – 23.6 percent in the city of Milwaukee and 22.7 percent in the five-county metro area excluding the city – though prices continued to stagnate at lower levels. Milwaukee saw a 2 percent decrease in sale price, while the five-county area saw a modest 0.3 percent increase, meaning the average home sold for just $667 more in 2012 than in 2011.

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Paper Chase

When Luke arrived in Milwaukee in 2007, he brought with him the promise of no more digging through purses and pockets for spare change. He brought the prospect of seamless credit card payments to replace antiquated parking meters. He may have oversold what he could offer the city.

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21 Ideas to Change Milwaukee

County Executive Chris Abele remembers the nighttime rain when the Milwaukee Art Museum’s Calatrava addition officially opened in 2001. He remembers the tents set up on O’Donnell Plaza. He remembers how “burnt out” many of the supporters were after the dot-com crash and the addition’s unprecedented $100 million price tag. (“I was on the board early on before the Calatrava,” Abele says, “back when it was a $27 million project.”)

But “the wings started to slowly open up,” he says, “and I know I was very much not the only person there who thought, ‘I am so freaking glad we did this. This is just special and awesome and great.’ That moment was a different way of thinking about this city.”
That moment is exactly the kind of thing Abele would like to see more of. “At the time they chose [Santiago] Calatrava at the art museum as an architect, that was anything but the safe choice,” he says. “And some might say it was anything but a Milwaukee choice. Thank God they made it.”
When Milwaukee chose Calatrava, he’d never completed a project in the United States and had completed only one building in North America. When everyone was zigging with predictable Frank Gehry, Milwaukee zagged with a “starchitect” who was on the fringe – a risky move for a relatively staid city.
But that risky choice resulted in an extraordinary building that’s now a city icon. That sort of risk involves “accepting together that we’re going to do something differently, we’re going to look at something differently and think about something differently,” Abele says.
And Milwaukee has started to think and look at things differently. Local events have started focusing on the future of the city. (See: the Envisioning the Seen discussion at the Pabst Theater and Milwaukee’s Future in the Chicago Megacity conference at Marquette.) Another such endeavor was held late summer in the City Hall rotunda with one key difference: a call to action. Answering New York City Mayor Michael Bloomberg’s challenge, Milwaukee Mayor Tom Barrett solicited innovative ideas from the community, ones focused specifically on mitigating the food shortage and foreclosure crisis. The mayor whittled down more than 100 submissions to 10, and those ideas were presented before a standing-room-only crowd Aug. 28.
The winner was Gretchen Mead, the founding director of the Victory Garden Initiative. She wants to repurpose foreclosed homes as urban homesteads to grow local food and provide homesteaders a path to homeownership. Her plan went up against ideas from more than 300 other cities for one of 20 finalist spots, which were to be announced in October. Representatives from those 20 cities will attend an ideas camp in November for a chance at a $5 million grant. Even if Milwaukee comes up empty-handed, Barrett has promised to act on the Milwaukee proposals, calling it the “essence of this entire challenge.”
Julia Taylor, president of the Greater Milwaukee Committee, predicts this sort of civic brainstorm will become more common. “I think you’re going to see people trying to figure out better ways to solve problems that’s almost like crowdsourcing,” she says.
With an eye to the future – the year 2050 to be exact – dozens of city leaders were put to the test. What does Milwaukee need to do to become a world-class city? A large time frame was chosen to escape the day-to-day politics, focus on the big ideas and think about the next generation rather than the next election cycle.
Although local population projections for 2050 don’t exist (yes, look that far ahead), there are two possible paths for the city. The Southeastern Wisconsin Regional Planning Commission’s highest projection sees Milwaukee County regaining recent population losses and exceeding 1 million residents in the next few years. But the group’s lowest projection predicts Milwaukee’s population will continue to decrease before seeing a slight uptick after 2015. That projection estimates a 2035 population of 13,600 fewer residents than in 2000.
For Milwaukee to follow the first path – a path of growth and progress – a few things have to change. “We’d want a higher average household income than now,” Gov. Scott Walker says, which means a stable tax base and a stable population. The keys to doing that are education and employment, he says, and many of the following 21 ideas address those challenges. These ideas have the potential for big change, not unlike turning a Nike missile silo site into the Summerfest grounds, tearing down the Park East freeway spur or choosing a bold architect for a major museum project.
So roll up your sleeves, Milwaukee. We’ve got work to do.
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