Gui Costin, ForbesBooks Author
They are poised to be the nation’s biggest spenders, as they move into their prime earning and spending years, so millennials dominate conversations around product strategy, marketing, and the economy at large. This generation is different, and so brands must see and interact with them as a unique consumer in order to draw their attention and business. Let’s take a look at Millennial spending habits and why they buy.
Who are they?
They were roughly born between 1982 and 1996, so they’re around 22 – 36 years old.
There are 83.1 million millennials in the United States, making them the largest generation in the country’s history.
The majority of these young people have less than $1,000 in their savings accounts, and a significant number have no savings at all. They have less credit card debt and car purchases than previous generations, most likely because lenders have tightened the requirements for granting credit and loans. More than 65% of millennials don’t have a credit card at all.
How do they make purchase decisions?
Millennials consider social responsibility and environmental friendliness when considering their purchases, so brands face Millennials’ significant expectations in terms of shopping and investment dollars. They typically choose to either follow their own instincts or go along with their peers but have become rather wary of financial advice given by parents and professionals in the field. They also prefer personal connections with those who manage their money, who reflect their highly held values of trust, authenticity, and choice.
When shopping, Millennials focus on discounts. They value price over recommendations, the brand’s reputation, and even product quality. They follow brands online just for discount opportunities. 66% of millennials would switch brands if offered at least a 30% discount, and only a third see a brand to consider trends or product updates.
Ironically, 60% of millennials state loyalty to brands they currently purchase from if treated well through customer-centric experience. To ensure allegiance, companies include loyalty programs with custom discounts as well as active courtship.
Other values that brands should center upon are authenticity, local sourcing, ethical production, a great shopping experience, and giving back to society. 75% of Millennials consider it fairly or very important that brands give back to society instead of just making a profit.
Where do they spend?
Millennials spend more on comforts and conveniences:
60% of millennials spend more than $4 on a single coffee
70% of millennials will spend a little extra to eat at the hip restaurants in town
69% of millennials buy clothes for reasons beyond basic necessity
Over 50% of millennials spend money on taxis and Ubers while only 29% of Gen X and 15% of Boomers do the same
Millennials spend more per year on:
Their cellphone as nearly all own a smartphone and comprise the highest usage as well
Hobbies, electronics, and clothing
At the same time, millennials spend less than older generations on:
Television—as streaming services have come online, cable is becoming a service of the past
Travel, because they’re unable to afford regular vacations and struggle to save for them
With this being the new financial powerhouse generation, it’s important to learn what motivates the purchases and investing of Millennials and to change up marketing to meet their expectations.