28 Millennial Spending Statistics for a Better Marketing Strategy
It’s a bloodbath, judging from the headlines. Millennials have killed off golf. They’ve killed off motorcycles. Diamonds. Beer. American cheese, for heaven’s sake. Home cooking, department stores...there’s no end to the American institutions, traditions, and values that millennials are prepared to slay with casual, entitled indifference in their rush to establish their stylish but ecocentric individualism.
They overspend, they love avocado, they are glued to their phones all day, they don’t want to get married, and worst of all, they are disloyal consumers who can’t commit.
That’s what the headlines say.
True? Or fake news?
There’s a nugget of truth behind some of these ideas, but according to our millennial spending statistics, not many.
This generation is growing up, and as they age, their purchasing power keeps increasing. They’ve got the cash and they want to spend it, but most companies are still scratching their heads about marketing. What do they even want? More pumpkin spice lattes? Fidget spinners? Gluten-free, organic, ethically sourced participation trophies?
Let’s take a closer look.
Millennial spending statistics highlights
- There are about 80 million millennials in the U.S.A. The generation’s purchase power is projected to reach $1.4 trillion in 2020.
- 94% of millennials go to restaurants at least once a month.
- 79% of millennials accept advertising philosophically as a part of life - and even a positive thing.
- 3 out of 4 millennials prefer spending money on experiences rather than things.
- 40% of millennials say their favorite online influencer understands them better than their real-life friends.
- 92% of millennials own smartphones.
Millennial shopping statistics
The millennial generation’s purchase power is large and growing. It’s projected to reach $1.4 trillion by 2020.
Millennials make quite a formidable force. There are about 80 million of them in the U.S.A., and according to Accenture, their spending power is projected to reach $1.4 trillion in 2020. This means 30% of retail sales will come straight out of millennial pockets. This generation is growing up. Millennials have more money at their disposal and the willingness to spend it, so retailers can look forward to more profits.
Almost 40% of retail industry leaders say that the biggest concern they have about millennials is their lack of loyalty.
Let’s get down to mythbusting. One of the most frequent millennial consumer trends we hear about is that they aren’t loyal enough. However, data shows that they can be exceptionally loyal provided you give them what they need. In fact, 80% of millennials say that once they find a brand they love, they keep coming back to it.
32.6% millennials take money out of their savings to buy holiday gifts.
They spend $576.39 on average, and they go out of their way to please friends and family during the holidays. While this can certainly be seen as admirable, millennial holiday spending sometimes gets out of hand. Taking money out of your savings often leads to overspending, and the mounting debt becomes a lot more obvious once the holiday cheer dies down and you’re left with nothing but a giant credit card bill to pay.
96% of millennials make impulse purchases at least once a month.
The average amount spent per impulse purchase is $71. These spontaneous shoppers seem to be more susceptible to reckless spending when in physical stores. Millennial statistics show that 81% make at least one impulsive purchase per month when shopping in person, and 69% of them make at least one impulsive purchase when shopping online.
48% of millennials regret giving in to a hasty purchase.
Compare this to 46% who feel content even after they buy something without a forethought. We do live in a consumerist society, so buying impulsively is nothing new. This generation seems particularly vulnerable to it; however, retailers need to be wary of pushing customers into unplanned decisions. Millennial consumers might give in to one initial purchase, but if they go home feeling guilty or frustrated with themselves, they will avoid the brand in the future. Customers who feel bullied or foolish don’t become loyal customers.
27% of millennials spend $0 on coffee on a monthly basis.
Those who do drink coffee spend around $38 a month on it, but a significant percentage don’t seem to drink it at all. According to a fact sheet compiled by the Tea Association, millennial purchasing habits lean teaward. Some 87% of them drink tea, so it’s entirely possible this is the drink of choice for many of them. Of course, the entire point of the Tea Association is to promote tea, so take that particular claim with a pinch of Earl Grey.
94% of millennials go to restaurants at least once a month.
They seem to love eating out, and most have no trouble splurging on a good restaurant, especially if they get to visit with a friend. And hey, eating out means no dirty plates, long prep times, or burnt, inedible dinners to worry about. Millennial food spending makes a lot of sense for a fast-paced, busy generation that doesn’t have the habit of nurturing cooking skills. Restaurants get them fed, allow them to enjoy a nice experience, and give them an opportunity to socialize. When you’re constantly strapped for time, meeting your friends for dinner makes it easier to both maintain the relationship and fill your belly with some good grub.
An average millennial spends $281 a month on groceries.
Millennial spending data states that 3% don’t buy groceries on a monthly basis at all. They clearly prefer eating out to cooking, but most still spend more money on groceries than on diners. For the sake of comparison, they spend an average of $163 a month on eating out.
For 75% of millennials, the monthly marijuana budget is $0.
Here’s another myth busted — statistics suggest that some millennials may not, in fact, be brain-dead potheads. However, those who do consume it tend to spend $39 per month on average, and they are known for enjoying cannabis more than they enjoy booze.
60% of millennials don’t spend money on gyms or exercise gear each month.
(LendEdu, Physical Activity Council)
Well, we’ve finally got them on something now! Or do we? Millennial spending patterns might imply that they are nothing but lazy bums, but a study on physical activity from Physical Activity Council suggests that they’re highly active. In this report, 42% of millennials participated in high-calorie-burning activities in 2017, while only 23.4% remained inactive. Compare this to 33.7% of boomers and 28.1% of Gen Xers who report being inactive. Gen Z is the only generation that reports a lower inactivity level than millennials — 17.9%.
Millennial buying power is increasing. While gyms can be expensive, the cost isn’t the reason this generation avoids them. What this young demographic seeks is a custom-tailored experience: yoga classes with a focus on spirituality and meditation, quick bursts of aggressively hyperactive crossfit, morning runs in quiet parks, or quick and simple at-home workouts that they can squeeze into busy schedules. The workout needs to have a purpose that goes beyond slimming down — it needs to be tailored to their personalities.
Millennials spend about $20 a month on streaming services.
(Smart Insights, Pew Research)
Millennial generation spending habits indicate that cable may be on its way out. Since the introduction of Netflix, HBO, and Hulu, 61% of those aged 18 to 29 claim that the primary way they watch their favorite shows is through streaming services. Streaming channels are cheaper than regular cable, they let you watch things whenever you want to, and you don’t have to worry about endless strings of commercials interrupting your enjoyment.
1 out of 3 millennials are willing to spend more than $5,000 on a vacation.
Millennial travel spending has taken off in the last few years. Millennials are more likely to splurge on a luxurious vacation than members of other demographic groups. They prefer making bookings with travel agencies that have an app to go with their websites, but they are also the most likely to use traditional offline travel agencies compared to boomers (7%) and Generation X (6%).
How on earth can we market to millennials?
79% of millennials accept advertising as a part of their life.
First of all, millennial consumer behavior indicates that most people from this generation have absolutely no problem with advertisements. It is, at worst, a necessary evil, though most believe that ads can improve their shopping experiences and help them purchase the things they need. About 46% of them have no issues whatsoever with ads, compared to 39% of those over 35. So not only is it entirely possible to market things to millennials, it turns out it’s easier to market to them than to the older generations.
33% of millennials use ad blockers.
Millennial spending statistics indicate that while this generation doesn’t mind advertising, they hate it when it’s too aggressive: videos that play unprompted, banners that cover half of the content, violently bright colors and loud call-to-action buttons that flash before your eyes. These advertising techniques are off-putting and they can harm brands in the long run.
3 out of 4 millennials prefer spending money on experiences rather than things.
Today, millennial purchasing power revolves mostly around experiences. They want to make unique memories and see things they haven’t seen before, and they’re ready to dish out a lot of cash for this luxury. Does this mean you can’t sell them a fancy dress or a clever little gadget? Not at all. It simply means marketers should learn to present products through experiences. This can be particularly easy in the beauty industry. For example, a moisturizer is more than a wrinkle-preventing solution — it’s an elixir of youth, a chance for a person to indulge in a nightly self-care ritual that will make them feel rejuvenated.
For millennials, shopping habits are influenced by the opportunity to feel good. Remind them that your product can offer more than simple material benefits and you’ll draw their interest.
66.3% of millennials are more likely to shop in places where they are part of the loyalty program.
There’s nothing like a good loyalty program to make sure a customer keeps returning to the store. Millennials are particularly fond of them because they help them feel closer to the brand.
15% say loyalty points influence their purchases.
Millennial spending habits can easily be influenced through point-gathering programs. They are more likely to consider a new body wash if loyalty points allow them to try the product at a discount.
50% of millennials say they always respond to limited-time offers.
Limited-time offers are a great way to create a sense of urgency and get people to click on the purchase button. When it comes to millennials, online shopping statistics indicate that things like countdown timers, flash sales, and limited-time coupons seem to be the most effective strategies.
55% of millennials blame FOMO — fear of missing out — for their last impulsive purchase.
Limited-time offers are a good way to induce FOMO in millennials and get them to put a product in the basket. Bear in mind that this tactic could scare them away in the long run. Ultimately, you want the customer to leave your store or website feeling good about what they bought - especially if your customer is a millennial.
94% of millennials use coupons compared to 90% of Gen X and 89% of boomers.
(Infographic Journal, Psychology & Marketing)
Statistics regarding consumer spending by generation show that millennials love a good bargain. Coupons, especially digital coupons, go above and beyond simply saving a few dollars. According to a Claremont Graduate University study, receiving a coupon can increase a person’s oxytocin levels, decrease the levels of stress hormone called adrenocorticotropin, and even slow the heart rate by 4%. The psychological reaction is similar to having a positive social interaction. It’s no wonder people like to indulge in a little retail therapy after a bad day — it works.
Prices need to be at least 10% lower to get millennials to switch to a retail competitor.
Statistics about millennials once again illustrate that they’re not quick to jump ship and run to competitor brands without a very good incentive. If you’re trying to stand out in a cut-throat market, you’ll have to offer significantly lower prices to pry them away from other companies and make them pay attention to your offers.
40% of millennials say their favorite online influencer understands them better than their real-life friends.
(Think With Google)
What do millennials enjoy besides adventure travel and Netflix? Apparently it’s YouTube. Influencers, rather than celebrities, are now affecting millennial spending power because they provide a more intimate, distinctive experience. Compared to celebrity videos, influencer content has three times as many views. It focuses on a smaller number of people and has very high engagement within that group. Famous YouTubers feel less like glamorous stars and more like friends — they come off as down-to-earth and approachable, so people are more likely to trust their product recommendations.
Digital Marketing and Social Media
92% of millennials own smartphones.
When it comes to millennials, generation statistics show that almost all of them own smartphones. They keep the little gadgets with them at all times and use them for work, entertainment, and getting in touch with those they care about. The fact that they rarely leave their phones behind means that mobile marketing needs to rank very high on any brand manager’s to-do list for reaching millennials.
68% of millennials want an integrated shopping experience.
If you are to pander to millennial shopping habits, your marketing efforts need to be optimized to suit every platform. Members of this generation like to compare product prices online before going to a physical store to check something in person, so desktop computers, smartphone ads, and brick-and-mortar stores can all work together to create a seamless experience.
32% of millennials prefer to make purchases online.
According to a Savebly infographic from 2019, there are also 25% who buy with smartphones, 24% who use tablets, and 11% who prefer physical stores. Compare this to Accenture’s study from 2013, when more than 80% reported that they still preferred physical stores. Millennial spending habits imply online stores have become more important, but bear our previous stat in mind. While this generation enjoys the convenience of purchasing something and having it delivered to their doorstep, brick-and-mortar stores are still an important part of shopping. It also happens to be an effective lead-nurturing strategy — show consumers you’re ready to meet them at every step and they’ll flock to you.
Millennials’ saving habits
63% of millennials are saving for retirement.
(Bank of America, LendEdu)
The idea that most millennials don’t care about retirement falls apart in the face of these statistics. Most are already saving, and they aren’t lagging too far behind other generations, either — 75% of boomers and 64% of Gen Xers are also setting money aside for retirement.
LendEdu figures show that 27% of millennials are spending more money on coffee and 32% spend more money on clothes than on retirement. According to this data on millennial spending habits, it looks like a significant portion are setting aside at least a little money for their pension funds.
However, with 59% of millennials reporting they feeling financially secure, it seems like they’ve got it all under control.
16% of millennials have $100,000 or more in their savings accounts.
(Bank of America, Wikipedia)
We imagine millennials as debt-ridden bellyachers who are completely incompetent with money, yet studies suggest otherwise — almost half (47%) report having $15,000 or more in their savings. For millennials, saving habits are important, and 67% of those who have a savings plan stick to it almost every month.
However, we must not forget the elephant in the room — student debt. Most of America’s $1.6 trillion student debt burden is borne by millennials, and most of them still have a long way to go before they’ve repaid everything they owe. Their finances are slowly stabilizing as the years go by, but a lot of them are still struggling to afford basic necessities, let alone luxuries.
60% of millennials prefer renting over buying a house.
Only 40% think that buying a house is extremely important. For 30% of millennials, it’s not a top priority at all. When it comes to buying a car, 25% don’t consider it important, and only 15% consider it as one of the top priorities. As much as 30% of millennials don’t plan to buy a home ever. This leads to the conclusion that this generation is moving away from traditional ownership to a sharing economy.
According to millennial financial statistics, their spending power is projected to rise to $1.4 trillion in 2020. They’re becoming savvy customers, and while they spend their money differently from members of previous generations, their financial track record and relatively deep pockets make them ideal prospects for properly targeted marketing messages.
We listed many of the most interesting above. In short, they prefer spending money on experiences instead of things, and millennial income statistics show that they’re willing to dish out more for quality. They spend a lot on luxuries such as travel, coffee, and restaurants, and they’re also willing to splurge on technology and entertainment subscriptions.
According to the Bank of America, 59% of millennials feel financially secure. The median average millennial income is $69,000, the highest it’s ever been, and the figures are bolstered by the earnings of millennial women. There are more women in the workforce, and they’re being paid more than in previous generations.
Beyond kale smoothies and avocado toast
Our millennial spending statistics show that this generation is evolving each day. The technological wonders of our age have made them savvy consumers who won’t settle for less, and while they might be a little tricky to please, they are incredibly faithful, generous consumers. Tailor your marketing efforts to millennials and you’ll gain the loyalty of the largest living generation of our age.
Albert Einstein is said to have identified compound interest as mankind’s greatest invention. That story’s probably apocryphal, but it conveys a deep truth about the power of fiscal policy to change the world along with our daily lives. Civilization became possible only when Sumerians of the Bronze Age invented money. Today, economic issues influence every aspect of daily life. My job at Fortunly is an opportunity to analyze government policies and banking practices, sharing the results of my research in articles that can help you make better, smarter decisions for yourself and your family.
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