A generational term we are hearing more and more about in the media these days is “millennial”. But who are the millennials and what makes them tick when it comes to buying stuff?
What do millennials like to spend their money on and where are their favorite places to shop?
What Is A Millennial?
This is a term given to a generation of people born between about 1982 and 1994. Like other generation titles, for example “baby boomers” and “Gen X”, millennials are often stereotyped or profiled as having particular preferences and behaviors.
While every individual person within the millennial time period is of course unique, marketers and demographers research trends and patterns in buying behavior amongst groups of people of this age.
This can provide valuable data about common shopping behaviors, and whether there are characteristics that are widespread amongst most of the people who are classed as Millennials.
The Online Life of Millennials
Millennials are the generation who have grown up with the rise of the web and social media being a central part of their lives. Never before has a generation of people had technology that was so critical and useful to everyday life.
Put simply, the majority of millennials would feel completely lost if social media, online shopping, smartphones and all related things were suddenly taken away. The life of a millennial often revolves around using these technologies; and most barely even think about it.
So it goes without saying that when it comes to shopping, that what millennials spend their money on is often heavily influenced by what is seen online; and purchases are often made online. Facebook, Twitter, Instagram, YouTube and other websites have all made it cheaper and easier for marketers and companies to specifically target their audience by age group and other specific factors, compared to traditional advertising.
This results in marketing campaigns becoming “viral”, which can spur more millennials to share with their friends. Suddenly, the next must have product is being promoted by the millennials themselves via these channels.
But what are the millennials actually buying? And how much of their income do they spend on consumer goods?
The Real Consumer Lifestyle of Millennials
There are some unexpected insights into millennial behavior being uncovered by studies and surveys. This generation does not always fit the stereotypes that marketers had assumed, and as a result many are looking at ways to adjust how they market to this segment.
It’s telling that one study by The Intelligence Group showed that over 70% of millennials do research online before they head out to a bricks and mortar retail store to buy.
This study also found that millennials were especially drawn towards shopping experiences that are personalized and exclusive, rather than heading to big box stores for the same generic products that everyone else is buying.
One of the focuses of this study was that millennials are increasingly abandoning large malls and instead spending their time and money in niche and boutique retailers – both online and in person. Niche products help millenials to share who they are and what they stand for, through their purchasing choices.
Being able to have thousands of these niche stores at their fingertips at any time, even while hanging out with friends, has made it less necessary and attractive for people of this age group to spend time in large malls, as those of previous generations did. Unlike any other previous generation, Millenials can have their much of their social life and their buying needs met online. Browsing online stores has become an entertainment and sometimes a social experience for millennials, and not purely a transactional one.
Another interesting fact is that over 35% of millennials admit to buying only the products which they see as necessary, and of these people, only about a third of them are prepared to pay the full price.
Interestingly, almost half of millennials admit to regularly browsing for products which they don’t have an intention to actually buy. This can lead to a 24/7 shopping habit; where millennials are constantly looking at products, but not necessarily making regular purchases.
So while millennials might be considered non stop shoppers, this data indicates that this generation of consumers might not be as impulsive as marketers believe. Instead, millennials are savvy to marketing messages and are less likely to be persuaded by clever marketing tactics.
Millennials Focus on Ethical Buying
The study also found that over 30% of millennials avoid buying products and services from companies that didn’t meet their expectations of ethical social practices. This can relate to human rights, animal rights, environmental ethics and other factors.
Millennials like to purchase from brands which stand for social justice and can express the same values that the millennials themselves feel towards certain issues.
Millennials want a meaningful shopping experience, not just a practical one. And they can be wiling to pay more to get it and invest more effort into finding what they want.
The Trading and Sharing Economy
Traditional shopping is just one aspect of the buying habits of millennials. Add to that trading, bartering, and sharing and it’s a whole new economy for this generation.
Whether it’s buying and selling things online through a person-to-person transaction such as Craiglist and eBay, or making use of Airbnb and Uber and other sharing economy services; millennials are switched on to opportunities that exist outside of the traditional retail and service environment.
This requires businesses and marketers to adapt their messages to the savvy and ever evolving millennial purchasing and spending behavior.
While there is still much to learn about the purchasing habits and spending behavior of millenials, it is clear that this is a generation that is very switched on and considerably more cautious about what and where they spend their money. Marketers, advertisers and businesses who take the time to understand the mindset and purchasing behavior of millennials will be in the best position to provide the products and services that appeals to this generation.