Millennials are undoubtedly shaping modern day business models, as seen in the internet radio giant Pandora.
Millennials have demanded more customized and personalized products and services, and have pushed companies like Pandora to meet their demand. Companies which have appealed to this demographic have profited handsomely, a fact underlined as the millennial-focused Pandora announced IPO status earlier this year. Pandora's quick climb in popularity and profitability was due to the millennial user base of the site. The future of American business depends heavily on the support received from this massive and powerful group.
Young people make up the majority of Pandora's 90 million active users. Millennials were the first generation to grow up experiencing the interconnectedness of the internet. The early 1980's were the years the first millennials were born, and in the late 1980's and 1990's commercial internet service providers made the internet available to the general public. Now there are more than 80 million millennials in America, which is even larger than the Baby Boomer generation.
Today, millennials have a spending power of $172 billion. This demographic spends an average of 12 hours a week online and 15%-17% of their money via the internet. These digital natives demand more customization and personalization in their products and services than any generation before. Businesses, then, cannot afford to ignore this market.
Up until five years ago, Pandora was known as Savage Beast, which sold music stations to retailers like Target and Best Buy. In 2005, Tim Westergren, founder of Pandora, changed the company to an internet radio site where people could customize their own radio stations. Just six years later, Pandora is selling shares on the New York Stock Exchange. LinkedIn, Groupon, and the social gaming site Zynga also declared their place in the trading world this year as well — and all can thank the millennial consumer for their success.
Millennials are looking for customization, personalization, and the ability to connect socially through their products. Companies like Pandora offer all of these things and are profiting as a result.
John Griere, CMO of Alcatel-Lucent says, "Millennials will redefine what it means to be a service provider, and what information and communications technology will be called upon to meet their wants and needs."
Millennials make up the largest generation since the boomers. The older generations aren't the main propellers of businesses like Pandora, therefore, businesses willing to meet demands of millennial consumers will be the businesses that will pull ahead.
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