Thursday, July 7, 2016

Emerging Millennial Families Challenge The Trendcasters

In the past week, I completed a detailed profile of a number of the Atlanta-area hip neighborhoods along with a number of more established ones. 

The project was actually for a couple of entrepreneurs attempting to start a new gallery in an outlying Inside-The-Perimeter (ITP) community called Chamblee. 

Chamblee is going through some transition right now and many believe that it will become even more popular as the price to live closer in-town in metro Atlanta continues to sky-rocket.  I personally believe, it has a tad bit longer to go.

Back to the broader analytics.

One of the neighborhoods that I profiled out in the analysis is called Old 4th Ward or O4W. 

The O4W ‘hood is located just east of Midtown-Downtown and has served as a collection bin of a lot of the urban grind as Atlanta expanded.  From project housing to homeless centers to various addendum offices of both municipal and state government agencies, the area has lived a mixed history past.

Right in the middle of O4W is a massive building that originally housed the only Sears store in Atlanta.  When Sears left the urban 'hood and fled to the ‘burbs, the building was taken over by the city of Atlanta and became what was labeled as City Hall East.  And about 15 years ago when the City Hall consolidated back downtown, the building was left abandoned.

Back in 2013, a development firm purchased the building and did a massive rehab of it converting it into an urban live-work-play complex now called Ponce City Market.

In a just a few short years, O4W has gone through a virtual resurrection. 

A good friend of mine who serves as EVP of Client Services at one of the Atlanta ad agencies, told me over lunch this past week that his daughter who just landed her first job out of college has a very strong desire to live in O4W. 

Does not surprise me. 

However, most of the new apartments including Ponce City Market are fetching close to $2,000 per month for a 450 square foot “one-bedroom studio.”

When I profiled out O4W, I was somewhat surprised to learn that more than 75% of the neighborhood is dominated by two Millennial Nielsen Lifestyle Groups nicknamed, “The Cosmopolitans” and “Connected Bohemians.”  Those two groups in the Atlanta Metro (MSA) represent less than 2%. 

There are a lot of Atlanta corporations – Coca-Cola being one and Georgia Pacific being another that are headquartered adjacent to Atlanta’s O4W. 

Most of the self-proclaimed top ad agencies and PR companies in Atlanta are not only anchored adjacent to O4W, but there are a couple that have relocated to Ponce City Market.

I tell this story simply to set up this blog about Millennials.

Don’t buy in to all that you hear the marketeers and agency prognosticates say as they look into their shiny crystal balls. 

When I explored other areas of Atlanta, I was surprised again.  

Neighborhoods that are really not considered hip nor located Inside-The-Perimeter (ITP) are growing and the growth is being driven by… Millennials!

Just as the Millennials drove change with social media, mobile technology and ADHD relationship dynamics, they are quickly evolving again and there are a few areas where we all need to grab hold of before too much is invested in something soon to change!

#1 Millennials Are Re-Defining The Family Unit - Not Really

There’s a number of sources out there that spout the fact that Millennials are less likely to get married, less likely to have kids and more likely to float from one relationship to another.

No question about it, Millennials have delayed marriage… although not too unlike their Baby Boomer parents.  Unlike GenXers, Millennials have not been driven by a preponderance of divorce making marriage a “must do.”

BUT… Millennials are now getting married and a good share are having their first kid. 

If you do not believe this, check out the TLC primetime show schedule, google the latest Tide detergent ads and catch the new Gerber’s baby food ad airing on HGTV. 

And then get a load of these stats from Pew Research Center… 60% of the children birthed by Millennials will be born to married parents vs. 45% back in 2006, ten years ago.

And… a release from the U.S. Census Bureau states… In 2015, 59% of children were born to married parents.  That percentage is expected to rise to 77% in the next 10 years.

Are they redefining the family unit? 

Not much from the Boomers with the exception that more moms will probably work and more kids will likely be birthed among married parents whether straight or gay or multi-ethnic-racial-religion-roots.

#2 Millennials Are Going To Live In Tiny Houses - Its A Fad!

If you watch HGTV, Great American Country or FYI-TV, you would rush out and buy stock in any of the firms out there pre-fab building or building Tiny Houses onsite.

Here in Atlanta in O4W, there’s even a Tiny House sitting right in the middle of Ponce City Market where you can go and have it towed over to your current drive-way and try living in a Tiny House a night or two. 

Tiny Houses are likely to be a fad more than a long-term market changer. 

On the psyche level, transitional Millennials are connecting with them right now because they are not too different from the college dorm room or the bedroom of their parent’s house – both environments that the trailing Millennials have desire to part from and leave-behind.

Few have come to realize the economics of mobile homes.  They depreciate unlike real estate property that can – depending upon the economy – actually appreciate.  

Millennials in general are not the best at understanding economic fundamentals.

And on the lifestyle level, very few have actually gone through the change-of-life experience to truly realize that living in one means they cannot shop Target or Amazon or Anthropologie.

While city housing economics are driving the constraints of smaller space, not too sure that Millennials will stay anchored in the in-town ‘hoods in the next 5-10 years and seek out cheaper places to get another bedroom or two.

And check out this next trend changer…

#3 Millennials Are Shedding The Need For Owning A Car - Tell That To The Dealers!

You could be in the hipster Millennial communities of Georgetown, Portland, Brooklyn, San Diego or Austin and you will read headline posts on the community pub websites about how bikes are in and how Uber, Lift and Zipcar are soon to replace any need for cars.

Shoot, I was a speaker in Atlanta at a leadership conference and shared the stage with the grandson of one of the top retail developers who talked of doing away with the need for parking lots in about five years.

The one “grounding” practice I do with clients often is to put them in a car and journey out into the ‘burbs and go to a Kroger grocery store, a Target and a Home Depot.  Doing that often re-introduces them to the actual real world that living in the hipster pocket communities can often blur both vision of and recall.

Back in March, the Business Insider posted an article titled, “Everything we thought about Millennials not buying cars was wrong.”

The article goes on to report how the Millennials are not surpassing Boomers in their hot desire to outright purchase (note... I did not say lease) vehicles (note the plural).

As the article states… “Millennials — especially the oldest ones — are these days buying cars in big numbers. They just had a late start and the theory that millennials would stick to skateboards, bikes, mass transit, and walking has turned out to be unsupportable.”

Not only are they buying lots of vehicles, but very few are electric (Boomers are the ones buying those) and a large percentage are either SUVs or gas guzzling pickup trucks.

#4 Millennials Are Forever Going To Live In-Town - Credit Limits Do Have Limits!

In-town living is trendy right now.  Its where a Millennial can live, work and play – more often in a newly constructed or renovated complex complete with parking garage and round-the-clock security.

Yes… there are some that have been able to initially afford the purchase of a house located in neighborhoods renovated and revamped by Gen X professionals or bohemian gay guys purchasing the homes long before the ‘hood was hip.   

BUT… will they be able to afford the taxes once the kids enter their households and they have to deal with education costs.

I will even go out on the edge and make a speculation that the Urban Apartment Boom will soon Bust too. 

The rental economic model is driven right now by annual rental increases for at least the next 5-9 years in the double-digit percentage range.  

The Millennial Boom in rental housing is now past the top of the bell-curve according to an article that ran this past weekend in the New York Times business section.  

While Millennials in Atlanta are concentrated in the O4W, there are also Millennials bearing individual nicknames like “Up-and-Comers,” “Young Influentials,” and “Generation Web” who are commanding more than 30% of more suburban and exurban satellite towns.

As my mother used to say to me, “the math simply does not add up.” 

While a share of Millennials will settle in-town, as those babies come, a good share will also be following the pathways of their Boomer parents.

#5 Millennials Are Driving Healthier Eating Habits - Hand Me My Red Bull!

Where I have my country Farm House east of Atlanta in the college town of Athens, Georgia, there’s a hip new place that opened up that is all the rage.

My Saturday morning coffee friends insisted that we had to meet up at this place versus the Indie coffee house where we traditionally get-together.

This new place is called Zombie Coffee and Donuts. Coffee is not the mainstay.  Cake donuts custom made and sold in serving packs of 2 or 6 full-size donuts take center-stage.

When we met there on a Saturday morning a few weeks ago, the Millennials with their kids riding in the $500+ strollers also took center-stage.  What I found most entertaining was watching these supposedly nutritionally smart parents feed their toddlers those full-size fried cake donuts complete with everything from multi-colored sugar sprinkles to chunks of milk chocolate candy bars to fat-loaded bacon strips.

I know, I know… you are thinking that this is just a side-show that popped up in a college-town.

Articles with titles like “Millennials are lying about their desire to eat healthy food” and “shifting over to nutritionally smart fast food is not paying off” can be found by simply Googling Millennials and Healthy Foods.

Sure, Millennials purchase of Coke products continues to decline, but sales of high-sugar content “energy” drinks like Red Bull, 5 Hour, Monster and Rockstar continue to climb.

And … LOL… Whole Foods might offer the all-natural, organic, nutritionally smart alternatives, but at prices over $5 per can challenge many Millennial debit card limits.

In Conclusion

I know that this is a long blog, but there is no question that Millennials are rocking the marketplace. 

Smart brand teams will not be swayed by the hip trendsetters, but rather dig below the surface and discover there’s more happening right before our eyes. 

Hey... if you want more rude awakenings... that your competitors are not willing to engage in... call me!