BY LEXINGTON LAW.COM | FEBRUARY 8, 2021
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The millennial generation is often at the front of controversy among statistics, economic studies, and news articles for being drastically different from the generations before them. News outlets often cite millennials for downturns in economic sectors including chain restaurants and the housing industry or rises in other industries including live events and coffee.
Although no generation behaves the same as the last, millennials are attributed to changing much of America’s spending habits due to their sheer size. As the youngest millennials will turn 23 in 2021, it is growing important to learn about their spending habits and purchasing preferences.
General Millennial Facts
Millennials, also referred to as Generation Y, are currently between the ages of 23 and 38 and one of the first generations to spend their formative years online. At about 73 million people, millennials account for a quarter of the population of the United States, making them the largest living generation. Like every generation, millennials are characterized by sharing similar worldviews, habits, and traits.
Millennials were born between the years 1981 and 1996. [Source: Pew Research Center] Millennials account for 72.1 million of the US population. [Source: Statista]
44 percent of millennials are married. [Source: Pew Research Center]
55 percent of millennial women are mothers. [Source: Pew Research Center]
53 percent of millennial households have children. [Source: Millennial Marketing]
39 percent of millennials have a bachelor’s degree or higher. [Source: Pew Research Center]
Millennial Spending Power
As many millennials have graduated from college with financial responsibilities, including debt, they have a growing obligation to act more responsible with their money and spending habits. Millennials were expected to accrue more wealth by the year 2020, where they were trended to spend $1.4 trillion. As millennials pay off loans and get better jobs with higher salaries the spending habits are expected to change.
94 percent of millennials use coupons and have a preference towards digital formats. [Source: Valassis]
Millennial shoppers spend $600 billion in the United States each year. [Source: Accenture]
Millennial spending was projected to reach $1.4 trillion in 2020. [Source: Accenture] Millennials' average yearly expenditures totals around $47,112. [Source: BLS]
Millennials’ average yearly income is around $56,099 before taxes. [Source: BLS]
Millennials spend two-thirds the amount spent by Generation Xers and baby boomers on entertainment. [Source: BLS]
Online Shopping Habits
As the most connected generation, millennials are leading the pack in online purchases. With convenience and price in mind, online outlets offer more value to the average millennial shopper. In recent years, millennials have become more concerned about security when completing transactions online. Forty percent of millennials refer to reviews and testimonials before purchasing any products, and the number is even higher when they are purchasing products online.
Millennials are also using subscription services to replace regular shopping trips to grocery stores and other bricks and mortars. In a recent study, 23 percent of millennials said they prefer purchasing a product online before going to pick it up in-store. They also favor generic store brands over name brands if it means saving money.
23 percent of millennials prefer purchasing an item online before picking it up in-store. [Source: Euclid]
42 percent of millennials complete online shopping transactions on their smartphones. [Source: Statista]
26 percent of millennials shop for groceries online. [Source: Valassis]
67 percent of millennials are worried that their personal financial information from online companies could get hacked. [Source: Civic Science]
91 percent of millennials prefer to shop online, with only 9 percent choosing to shop in-store only. [Source: JungleScout]
44 percent of millennials prefer shopping online because of the fast shipping and wider variety of products available. [Source: JungleScout]
47 percent of millennials say they shop on Amazon at least once a week. [Source: JungleScout]
It was estimated that 85.9 percent of millennials would be digital buyers in 2020. [Source: eMarketer]
60 percent of millennials prefer to purchase generic brands over name brands. [Source: Millennial Marketing]
40 percent of millennials refer to online reviews and testimonials before purchasing a product. [Source: Millennial Marketing]
How Will Millennials Make their Next Purchase?
In-store shopping: 40%
Mobile device/tablet: 36%
Laptop or desktop computer: 24% [Source: CouponFollow]
Millennials prefer brands who offer a unique experience, value for their money and great customer service. Although many brands have credited millennials for a downturn in business, 60 percent of millennials stay loyal to brands they purchase from. Millennials also cite the importance in giving back to the community and expect the brands they follow will do the same. As millennials prefer experiences over things, they heavily weigh a brands customer experience into their perception of a brand.
Millennial parents expect brands to provide value for their money and proper customer service. [Source: Crowdtap]
30 percent of millennial consumers say they feel loyal to brands versus products. [Source: InMoment]
60 percent of millennials say they’ve been loyal to specific brands for 10 or more years. [Source: InMoment]
52 percent of millennials prefer to shop at retailers that align with their values. [Source: Euclid]
44 percent of millennial parents say they will only shop with brands who share the same social or political views. [Source: National Retail Federation]
19 percent of non-parent millennials say they always research a brands’ views on topics that are important to them. [Source: National Retail Federation]
14 percent of millennials say that they would take to social media or a brand’s website to share a review and give feedback. [Source: Retail Dive]
96 percent of millennials say that brands should find new ways to reward loyal customers. [Source: KPMG]
81 percent of millennial consumers say being a member of a rewards program encourages them to spend more money with a brand. [Source: KPMG]
55 percent of millennials like when brands offer unexpected rewards on social media or in-store, as opposed to traditional reward points. [Source: Hello World]
Advertisements and Marketing
Millennials overall are responsive to advertising if it is relevant. However, the intrusive nature of some advertisements leads to the use of ad blockers online. Although the majority of millennials use ad blockers while online, they still are receptive to some marketing ads. Many prefer in-feed advertisements so long as they do not disrupt the overall experience of a website.
As millennials prefer online entertainment over traditional cable or television, advertising to the demographic has adapted to become more specific. With the power of social media advertising and influencer marketing, these ways of marketing are becoming the new norm for brands.
49 percent of millennials are using ad blockers on their computer, while 31 percent use an ad blocker on their smartphone. [Source: Civic Science]
61 percent of millennials have shared their password or login to stream content online, while 64 percent say they’ve used someone else’s account. [Source: Bankrate]
75 percent of millennials believe attending an event in person has more impact than taking action online. [Source: Eventbrite]
92 percent of millennials think a website or app’s appearance plays an important role in deciding whether or not to submit their personal information. [Source: Clever]
30 percent of millennials are not willing to engage with online advertisements. [Source: Clever]
77 percent of millennials say they worry about a company using their personal data. [Source: Clever]
Millennials are 54 percent more likely than older generations to buy a product that was recommended by a social media influencer. [Source: Clever]
25 percent of millennials say they are more likely to purchase a product because of an advertisement on social media. [Source: Clever]
Millennials are 25 percent more likely to engage with online advertisements. [Source: Clever]
43 percent of millennials engage with an ad if it is funny. [Source: Clever]
29 percent of millennials engage with ads if they are informative. [Source: Clever]
36 percent of millennials trust social media advertisements. [Source: Statista]
Millennials spend an average of 211 minutes on apps or the internet per day. [Source: Statista]
Millennials are heavily burdened with debt from student loans, credit cards and other lending sources. As many borrow large sums of money to pay for education, millennials carry almost $500 billion in student loan debt. This large debt has a large impact on millennials as homeownership is down among the demographic and over 50 percent have said their student loan debt has delayed their ability to save for a home.
Student loan debt for borrowers ages 25 to 34, which makes up a big portion of millennials, reached $497.6 billion in Q2 of 2019. [Federal Student Aid]
46 percent of younger millennials report having an average of $26,000 in student loan debt. [Source: NAR]
38 percent of older millennials report they have an average balance of $34,000 in student loan debt. [Source: NAR]
42 percent of millennials say taking out student loan debt was not worth it given their current financial situation. [Source: Morning Consult]
On average, each millennial carries $4,712 in credit card debt. [Source: Experian]
Younger millennials around age 23 carry an average of $2,288 in credit card debt. [Source: Experian]
Older millennials around the age of 38 carry an average of $6,675 in credit card debt. [Source: Experian]
More than 50 percent of millennials say student loan debt delayed their ability to save for a home. [Source: NAR]
56 percent of millennials say they do not have a retirement savings account. [Source: Morning Consult]
56 percent of millennials say they are living paycheck to paycheck. [Source: Magnify Money]
76 percent of millennials carry some kind of debt. [Source: Bank of America]
Of those with debt, 16 percent of millennials say they owe $50,000 or more. [Source: Bank of America]
76 percent of millennials say they are unable to achieve their personal and financial goals because of their debt. [Source: Bank of America]
As millennials will soon become the largest living generation in America there is a growing need for brands and companies to pivot their sales tactics to and marketing approaches to the demographic.
Though millennials are often criticized for their spending habits, they are one of the generations that paved the way for brands to change their marketing tactics and adapt to an online way of thinking via social media and other online platforms. With millennials becoming a generation that plays a major part in the U.S economy, it is important for brands to stay educated on the spending habits of this growing powerhouse.