The New Playbook That Taps a $200 Billion Millennial Market
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The Fiscal Times
July 2, 2014

As the Fourth of July approaches, one San Francisco-based company called Chubbies – yes, Chubbies – is honoring America’s birthday with its signature American flag swim trunks for men. They call the trunks “The ’Mericas” – and they’re flapping all over Facebook.

At a time when some people question the effectiveness of pitching products via social media, Chubbies is a smashing e-commerce success. With only 28 employees, Chubbies has not just tapped into the $3 billion casual men’s shorts market – it’s used social media marketing to grow the company by 840 percent from 2012 to 2013. In that same period it experienced a 690 percent increase in monthly revenues. In other words – fireworks!

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“Our brand is driven by content, and for us, social media is the best way to get that content in front of our demographic,” said Tom Montgomery, Chubbies’ cofounder and head of marketing, customer experience and web design, in an interview.

The product may not speak to those outside the beer-chugging, collar-popping, weekend party scene, but millennials love the shorts. The brand is a case study in what works in targeting these young consumers and their $200 billion in annual buying power.  

A recent study by Mom Central Consulting, a social media-consulting firm, suggests this demographic is among the most misunderstood of consumer groups.

“A lot of companies and brands are still using traditional broadcast mediums and top-down messaging. Millennials really balk at that,” said Stacy DeBroff, CEO of Mom Central Consulting. “They don’t want intrusive advertising. They don’t want brand messaging to suddenly pop up in their Facebook feed.”

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But 92 percent of millennials are on Facebook, so companies feel compelled to try. DeBroff says that millennials shop by unique rules. They’re ready and willing to go to brands to get details about something – but they’re often turned off if those brands come to them.

“People go on Facebook to connect with friends and family,” said DeBroff. “The most important thing to them is their feed and the personalization of it,” she explained – so pop-up ads that intrude on this space can backfire. “Facebook has changed its algorithm so the brand pages aren’t naturally getting any readership. If you want a message you’re putting on a brand page to reach anybody, you have to pay as an advertiser to put it out. So all of the sudden, brands aren’t just popping up ads on the sidebars, but within the feeds themselves.”

New polling underscores the challenge – and the debate about social media marketing. In its latest State of the American Consumer report, Gallup found that 62 percent of Americans claim ads on social media sites like Twitter and Facebook have no influence on their buying decisions. The finding is sure to make some American businesses and the advertising industry rethink their piece of the $5.1 billion spent on social media advertising in 2013 alone.

Nissim Lehyani is in the business of finding the right balance, and questions the Gallup data. He’s the co-founder and CEO of Easy Social Shop, a company that helps online sellers reach more consumers by integrating their existing stores with their Facebook pages.

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“You can’t base general conclusions about advertising on what people said affected them,” Lehyani said in an interview. “Consumers may not feel the effect right away – they often don’t even realize if or how their preferences are impacted by advertising.”

Not trying, he says, would be foolish. “Having the ability to somehow impact of 40 percent of the U.S. population with ads on social media – I’m buying it, and a lot of brands will too.”

Yes, but, Rachel Krautkremer, director of strategy at The Intelligence Group, says advertising on Facebook can be a double-edged sword.

For nearly two decades, the group’s quarterly Cassandra Report – which investigates how young people live, think and act – has been a key resource for firms who want to reach young audiences. “[Respondents] will say that if an ad is relevant to them, they don’t mind it,” said Krautkremer. “But if not, you run the risk of alienating potential consumers.”

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In a recent Cassandra report, 84 percent of respondents said they base their purchasing decisions on the opinions of family and friends.

DeBroff’s study similarly shows the key is what happens off the grid, revealing that peer-to-peer relationships and word-of-mouth recommendations dominate millennials’ decision-making.

Chubbies is a case study in exactly how this works, and who wears short shorts. As it turns out, men do – at least, the company’s target audience of 18-to-30-year-old “guys” who like to have a good time on the weekend. Top on their website’s list of #ChubFacts: “Saturdays are meant for Barbecuing, Chubbies and beer. Not much else.”

“Storytelling is powerful and timeless,” said Krautkremer, “so brands that can tell their story well are able to get inside the hearts and minds of young consumers in ways that traditional media doesn’t.”

Montgomery agrees it’s the mix between online creativity and in-person buzz that makes the sale. “A static ad on Facebook will only work if somebody has already heard about your company and had a great experience with it. Otherwise, those ads are just ignored,” he said. “Whether we make them laugh with something we put in their Facebook newsfeed, or their buddy tells them about [the shorts], or they see somebody wearing them – we always want that first reaction to be rooted in a non sales-y message, and more of a story.”

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Reilly Dowd is a senior writer at The Fiscal Times. Based in Washington, D.C., she covers national politics, economic policy, technology, and elections. She has previously worked at Al Jazeera America, SnagFilms, ABC News, CNN and in the Obama White House.