Who Are Millennials?
As with other generations, there are no firmly set boundaries for inclusion. Millennials, also known as Generation Y, reached adulthood at the beginning of the 21st century. A widely accepted definition for Millennials is those born between 1982 to 2000.
Millennials range in age from 20-40 years old. They have (mostly) graduated from college, many are married, some have already had kids, and many have purchased houses. Millennials have entered a period of high consumption. It’s no secret Millennials spend money differently than previous generations. High consumption is not the same as for earlier generations as Millennials are not today’s top spenders. Of all the generational cohorts, they are only #3 in terms of annual retail spending, averaging $5,928 annually per household (after Gen Z and Gen X).
The pattern of under-spending compared to other generations continues beyond retail. Compared to GenZ, GenX, and Baby Boomers, Millennials spend less on Travel (only $3,112 average annually) and Financial Services ($1,431 annually). Before moving on to discuss impacts on Millennial shopping habits, let’s first understand the why behind Millennial spending.
Millennial Spending Habits
Millennials came of age during the Great Recession, so the uncertainty of the housing market collapse and financial instability weighs heavily on this generation. Their lower spending – and spending on different categories – led to them been accused of killing everything from canned tuna to the suburbs. Yet, Millennial habits are not so different from that of previous generations, “once the effects of age, income, and a wide range of demographic characteristics are taken into account.” Younger people spend less because they have less money to spend.
They Turn to the Technology to Make More Informed Decisions.
They Value Price Over Brand Loyalty
Millennials are very price-conscious; they are deal seekers. Price is the most significant force powering purchase with two-thirds of millennials say they will switch brands if offered a discount of 30% or more.
They Make Purchases on Their Smartphones
Millennials switch between different types of tech every day for work, play, and shopping. Technology enables Millennials to purchase how they want and when they wish, taking advantage of this more than other generational cohorts. Millennials are more likely to buy on their mobile phones compared to the rest of the population (43% versus 28%).
They Are Frugal, to an Extent
Millennials spend, just not as much on average as other cohorts. They more than make up for the lack of average spend per person by their sheer as Millennials are over 75 million in number, are nearly a quarter of the total US population, and almost two-fifths of the working-age population.
Monitoring the spending habits of Millennials will remain beneficial for years to come.
