Millennial spending habits will soon be the main driving force of our economy. We are the largest generation in U.S. history thus far. The millennial generation is anyone born between 1982 and 2002. That puts the current age range of millennials from anywhere between 15 and 35. That means that a majority of millennials will soon be looking to make big ticket purchases, such as a car or a house. As generations evolve spending habits tend to change. As a millennial myself I can attest to the differences.
We are a generation that is accustomed to immediate pleasures, after being spoiled with innovations like Amazon and Uber. We are known for being on our phones 24/7 and always being connected to everyone at all times. Millennials are more open to discussing finances than previous generations and are more keen on saving. They have witnessed the disasters brought about by the financial crisis and it has caused them to be more responsible with their finances.
Millennial Spending Habits
- Millennials would rather rent an apartment than buy a house.
- Millennials rely on different sources of information prior to making purchases.
- Millennials want to engage with brands on social media.
- Millennials purchase through different channels.
- Millennials tend to spend more on experiences.
- Millennial spending habits towards foods are also changing.
There are many reasons behind this. Since many millennials are choosing to get married at a later age in their life, they are renting out apartments rather than out right buying a house. In addition, many millennials are opting to live at home with their parents rather than moving out right after college. Many are also burdened with large amounts of student debt.
Traditional advertising is not as effective on the millennial generation. They rely more on social media and online blogs for information before purchasing products, contrary to older generations that focus more on advertising found on TV, or in books or magazines. Who even actually watches through the advertisements shown on TV anymore? We now have the ability to multitask and be on our phones doing something more valuable with our time rather than watching a TV ad.
If a brand doesn’t have a social media account is it even relevant? With the rise of social media, millennials want to connect with the brands they love, as well as see online interaction. This puts pressure on older companies to adapt and spend money differently in order to keep engaging the right audience.
Millennial spending habits on certain things might be the same, but regardless the means of spending have changed. Less millennials see themselves in the store buying an item on many occasions, and would rather shop online for the best deal. Our tech-savvy generation is keen at finding the best possible deals when online shopping. When it comes to millennial spending habits online, most of it is even done through their mobile phones. With social connectivity reaching peaks with apps like Facebook, Instagram, and SnapChat (SnapChat states that on any given day it’s app reaches 41% of all 18 to 34 year olds in the United States), it is important for companies to market themselves through these channels in order to successfully reach millennials.
Because they are the most connected and social generation, millennial spending habits towards experiences are far more superior than millennial spending habits towards possessions. We are more willing to spend on experiences that will create memories for a lifetime, rather than material possessions. There is a need for constant communication and interaction therefore resulting in more money being spent towards concerts, traveling, sporting events, and other social events. Also because sharing experiences is so easy, it creates the spark for people to go and check out the next best thing.
Unlike older generations, millennials are surprisingly more attracted to healthier foods. They are more likely to spend money towards local and organic products, and ditch the processed foods. They are also spending a higher percentage on eating out than previous generations. Even when it comes to coffee consumption, millennials are spending much more than older generations.
In order for companies to evolve and keep millennials happy they will need to adapt as the years move on. They need to create seamless experiences for the customer or someone will come take their business. This means providing better, faster, and more memorable services and goods. There are definitely many other interesting changes when comparing millennials to older generations other than their spending habits. Overall, millennial spending habits will soon become the driving force in changes that we will see in our economy and around us. We will be influencing the way the world around us develops and adapts.