Getting to know the millennial consumer
June 19, 2019
For many businesses, no other segment of shoppers is likely as enticing and yet confusing as millennials.
While the “avocado toast” generation might have a bad reputation for killing several industries – like napkins, cereal, marmalade, and beer – they’re also described as the “most-coveted consumer demographic.”
And there’s a good reason for that, given the generation’s tremendous purchasing power and tremendous influence.
But the only way to successfully appeal to millennials is to know who they are and what they want in a shopping experience.
To help get you started, we’ve put together some interesting and useful insights about millennial consumers.
Who are millennials?
Let’s begin by debunking a common stereotype: referring to millennials as kids. The Pew Research Center recently set the generation’s date range as 1981 to 1996, and the US Census Bureau uses 1982 to 2000. With either range, many of those “kids” are well into their 30s with families of their own.
- In fact, 40% of millennials are parents.
- The generation represents one-quarter of the American population. There are more than 83 million millennials in the US, outnumbering baby boomers.
- Overall, millennials in the US are more diverse than any generation that preceded them. 44.2% belong to ethnic and racial minorities, according to the Census Bureau.
- 88% of millennials live in metropolitan areas.
The purchasing power of the avocado toast generation
One of the big reasons it’s worthwhile for businesses to appeal to millennials is because of the generation’s massive purchasing power. The generation was projected to eclipse all other age groups in terms of spending power by the end of 2018.
- By 2020, millennials’ annual spending is expected to reach $1.4 trillion. That will equal about one-third of all US retail expenditure.
- Millennials spend more per shopping trip than any other generation but spend less overall per year because they make fewer trips.
- Nearly any survey you read about millennial consumers will note that they crave experiences. In fact, 72% of millennials would choose to spend money on an experience or event instead of buying material things.
Where millennials shop
Millennials are omnichannel shoppers and like to make the most of both online and offline experiences. A survey conducted by Adobe found that for the 2018 holiday season, 58% of millennials planned to visit a store to see a product that they would purchase online later.
- In addition to getting to hold and try products first-hand, millennials also like the convenience of shopping in stores. Research has found that many (63%) say not having to wait for deliveries is an advantage to visiting brick-and-mortar shops.
- According to a recent survey, 67% of millennials prefer to shop from smaller businesses because they offer a more personalized shopping experience.
- Buy online, pick up in-store is also becoming increasingly popular among millennials. Nearly half (47%) say they use the click-and-collect option 40% of the time.
- Since more than 90% of millennials own a smartphone, it’s also no surprise that they are using their mobile devices to make purchases. Millennials reportedly make 40% of their purchases on a smartphone.
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How millennials pay
Despite their spending power, millennials are terrified of credit card debt. One survey found that it scares them even more than death. And according to another, only 33% of adults aged 18 to 29 own a credit card.
- Millennials were early adopters of mobile wallets. Now, nearly half of those in the generation group prefer to pay with a mobile device than with cash.
- For large purchases, 60% of millennials are interested in financing options aside from traditional credit cards.
Do millennials have brand loyalty?
A trait often attributed to millennials is their lack of loyalty to brands and businesses. But the reality is that if provided with an experience that meets their needs, many millennials (60%) will continue shopping with a company they like.
- Millennials are likely to lessen or end a consumer relationship when they disagree with a company’s business practices, values, or politics.
- They believe strongly in corporate social responsibility. Research has found that nine in 10 millennials would switch brands to one associated with a cause. And two-thirds use social media to contribute to a company’s corporate social responsibility efforts.
- 74% of millennials will start shopping somewhere else if they experience poor customer service or rude employees, no matter how loyal they are to a particular brand or retailer.
- Millennials are loyalty program aficionados; 72% are more likely or much more likely to buy from a business offering a loyalty or rewards program, compared to one that doesn’t.
- A unique trait among millennial consumers is how they will embrace opportunities to collaborate with businesses and brands. Companies can gain a significant competitive advantage by engaging with consumers to “co-create” a product or service.
Advertising and marketing to a generation
If you’re wondering where to spend your advertising budget to attract millennials, social media is the answer. Not only do 42% of millennials say that social media is the most relevant channel for advertising, but 63% report that seeing a brand or retailer on social media increases the likelihood they will buy from that business.
- Millennials spend more time using apps and the internet on smartphones than they do watching television.
- A recent survey of millennial consumers found that 78% had discovered a retail product they were interested in purchasing via Facebook.
- 46% of millennials are increasing their usage of YouTube, and 34% use Instagram daily.
- Because they are known as the “experience generation,” pop-up shops and store events often work well to draw millennials’ interest.
Millennials might have a bad rap, but one thing is clear: when it comes to making purchases, they know what they want.
When planning your next marketing and advertising strategy, keep these insights in mind to help your business capitalize on attracting this coveted consumer group.