The buying power that millennials have entices brands and retailers of all industries. There are about eighty million millennials in America and they represent about one fourth of the entire population with $200 billion in annual buying power. Despite this, companies have been struggling to connect with them through advertising and capture their attention. They’re different from their parents and previous generations so retailers have had to approach them differently. Below are key factors to keep in mind that differentiate millennials and their shopping habits.
1. Save for a rainy day
According to the second-quarter 2015 Nielsen Consumer Confidence report, roughly 70% of millennials indicate their personal finances will be either good or excellent in the next year. These same consumers have experienced the hardships of the U.S. economic turmoil, therefore they are savvy shoppers by necessity. They will purchase previously used items and research at least four sources when trying to decide on a purchase.
2. Some millennials are thriving economically
Some millennials struggle with money, but about 27% of this generation qualifies as upscale millennials that earn more than $75,000 per year. This subgroup has a median income 11 times that of the general millennial group. Brands need to understand the needs of this distinct subgroup to capture their attention.
3. Spend money on what matters to them
Yes, millennials love a deal, but they also spend money on what matters to them. Known as the technological generation, millennials will not delay in upgrading their devices to save money. While they spend less on clothes to save money, 35% still make apparel purchases with their extra cash.
4. Digital is Key
About 92% of Millennials own a smartphone, compared with 76% of Baby Boomers. Because technology is an integral part of their lives, it’s a key component of their shopping experience. Roughly 19% of Millennials and 31% of upscale Millennials spent over $1,000 online in the past year. The majority (66%) use the Internet to purchase hard-to-find items. Roughly 70% of upscale Millennials scour the Internet for hard-to-find items.
5. Trusting Generation
Compared to all other generations, millennials are the most trusting of almost every type of advertising including traditional and digital. For the retailers that can tap into these outlets and properly communicate their message to this generation will see big rewards.