Key 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 for 2023 - Editor's Choice
- There are 72.24 million millennials in the US in 2023.
- 94% of millennials go to restaurants at least once a month.
- An average millennial spends $488.9 a month on groceries in 2023.
- 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.
- 73% of millennials will spend the same or more on online shopping compared to 2022.
Millennials and Shopping
The millennial generation’s purchase power is large and growing. It’s projected to be at over $2.5 trillion in 2023.
Millennials make quite a formidable global force, and their buying power is expected to pass $10 trillion by 2030.
In 2023, 73% of millennials will spend the same or more on online shopping compared to the previous year.
The same study by ESW found that 27% of millennials will spend significantly more on online retail shopping than they did in 2022.
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.
(Finder, American Express)
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. In fact, the data from 2022 shows that 86% of millennials overspend on holiday gifts.
61% of millennials made at least one impulsive purchase of a product seen on social media.
The data by Bankrate shows that Americans spent $71 billion on impulsive purchases based on the products they saw on social media, and the majority regrets at least one of those purchases. Out of all the millennials that made at least one impulsive purchase in 2023, 55% said they regret it.
Millennials spent an average of $1,016 on impulsive purchases inspired by social media in 2023.
The millennial generation is leading the numbers when it comes to impulsive social-media based purchases, as 33% impulsively spent $500 or more on products seen on social media.
Millennial Luxury Spending Numbers
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 $488.9 a month on groceries in 2023.
(Capital One Shopping)
Millennial spending data shows that grocery spending has almost doubled in the past few years, driven by inflation and higher cost of living. The lastest report has shown that groceries represent 25.6% of the total annual spending made by millennials.
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)
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 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 $54 a month on streaming services in 2023.
This number is the highest across all generations, with the average US consumer spending $48 per month on streaming services. Along with being the biggest spenders on SVOD services, 45% of millennials also "churn and return" to streaming services, cancelling a paid subscription oonly to return to it after six months.
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%).
Millennials and Marketing
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)
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
94.4% of US millennials own a smartphone in 2023.
When it comes to millennials, the data shows 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, 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.
How much do millennials spend annually?
According to millennial financial statistics, their spending power is projected to rise to $2.5 trillion in 2023. 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.
What are millennial spending habits?
We listed many of the most interesting above. In short, they prefer spending money on experiences instead of things, and millennial income numbers 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.
What is the buying power of millennials?
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.
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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