Musings On The Millennials

I just completed two long-distance road trips.

The first one was in a mini-van from Boston suburb of Belmont to Grapevine, Texas, north of Dallas, eighteen hundred miles.

The second was in the same mini-van from Grapevine to San Pedro, south of Los Angeles, fourteen hundred miles.

In both cases, I drove straight through, catching cat-naps along the way; drinking no coffee the entire way; and using McDonald's for wi-fi. [I visited Starbucks at each end of the trip but not during the trips themselves; it was always easy to find a McDonald's along the interstate; not true of Starbucks.]

After driving the mini-van from Boston to Dallas, I had the car inspected, and oil changed. It was deemed road-worthy, and I trusted it to San Pedro, where I will be for about three weeks before I return to Texas.

I appreciate everyone bearing with me during those periods of minimal blogging and erratic posting.

Thank goodness for McDonald's and Starbucks. As mentioned many times, both eateries have free wi-fi, but it is McDonald's policy, apparently, not to encourage laptop use; it is a very, very rare McDonald's to have even one electrical outlet.

Over the years it has been "fun" to see how companies define themselves, to develop strategies, and to watch them develop and execute a business plan, short term and long term.

Years ago when Starbucks announced they would provide unlimited wi-fi, I thought it would be a disaster. Folks would camp out in the restaurant but purchase very little. In fact, Starbucks has done very, very well, and goes out of their way to encourage folks to bring in their laptops.

Today, I returned to the Starbucks I frequent in San Pedro. In the past it was limited by the number of tables and limited even more so by the number of electrical outlets. Since I was last there a few months ago, Starbucks has put in a new table that easily seats eight people and installed outlets underneath the table for all users. I was quite impressed.

McDonald's, on the other hand, has even gone so far as covering the one electrical outlet in their restaurants with a plastic plate to keep anyone from plugging in their laptops, tablets, or other mobile devices.

McDonald's is struggling to define themselves with regard to millennials.

McDonald's may be the country's No. 1 fast-food chain and one of its most-beloved brands, but when it comes to millennials, the Golden Arches says it doesn't even rank among the demographic's top 10 restaurant chains.

It's enough of a concern that McDonald's is launching its biggest product of the year, McWrap, to court a huge and influential cohort that values choice and customization. According to NPD Group, there are 59 million people ages 23 to 36 in the U.S.—the range it defines as millennials.

McDonald's isn't the only major marketer trying to reach this group. Everyone from Coke and Gatorade to brewers and media companies are struggling to understand millennials. There's even some debate about just who they are in terms of age range — restaurant consultant Technomic Inc. in Chicago counts them as 19-to-34-year-olds while McDonald's Corp., in an internal memo obtained by Advertising Age, classifies them as ages 18 to 32. Size estimates for this demographic group range anywhere from 59 million to 80 million.

But on one thing most marketers agree: “They're 80 million [people] but they're influencing the next 80 million, both younger and older,” said Gary Stibel, CEO of New England Consulting Group in Norwalk, Conn.

Their answer: a new food item.

McDonald's is missing the point. Food is not the issue. The vast majority of folks visiting Starbucks go there, not for the food, but for the social interaction. Coffee is very, very important, but Starbucks is clearly about much more than just coffee. In fact, some times I think Starbucks stresses coffee so much just to keep their competitors off-balance.  Starbucks has it figured out. Starbucks is not in the coffee business; it is in the social networking business (think Facebook, Instagram, Yelp, etc).

From Outside The Beltway:

The Millennials (people born between 1983 and 2000) are now the largest generation in the United States. By 2030, Millennials will be far and away the largest group in the peak driving age 35-to-54 year old demographic, and will continue as such through 2040.

Twenty or thirty years ago, McDonald's rightly felt that getting youngsters into their restaurants was key, and thus Ronald McDonald and the Play Areas. But the largest demographic has outgrown play areas and is looking for something different, something along the lines of Starbucks.

Starbucks is still limited by its food selection (it's actually quite good, but one has to develop a "taste" for it over time) and a perception of hoity-toity-ness. Interestingly enough, the "illegal" immigrants find Starbucks just fine, as evidenced by the large presence of non-English speaking folks (at least as a first language) in the Starbucks I have frequented.

It really is interesting: something as simple as an electrical outlet can define the success of a coffee shop.