As the generation young people known as “Millennials” enter their professions and begin to make up a larger proportion of consumers and investors, marketers the world over have turned their attention to the tastes and habits of this emerging demographic cohort.
In many cases, however, the marketing agencies and financial firms that are trying to appeal to Millennials (generally understood as those between the ages of 18 and 34) have yet to solve this puzzle.
Some might describe this as simply being “out of touch,” but the fact is that the spending, saving, and investing behaviors that have characterized Baby Boomers—the largest generation in world history—haven’t been adopted by Millennials in large numbers.
For instance, one major difference has been how the two generations view their discretionary purchases: Boomers were more likely to buy possessions and assets while Millennials place a greater emphasis on paying for experiences that one cannot “own” or physically hold onto. This trend has led to new dynamics in the services sector, epitomized by companies like Airbnb that are tailored to experiential activities.
In an age of “big data,” more answers should naturally be found in research and statistics about Millennial habits. In this vein, a survey of Millennials conducted by Sreekar Jashthi of Credible.com reveals some crucial insights about how Millennials are shopping this holiday season.
Don’t Fear Debt?
Many Americans who came of age in the second half of the 20th century took on debt as they began to start families and enter the workforce. However, they tended to do so in the form of mortgages. Credit unions and small savings & loan institutions were more common back then than they are today.
By contrast, Millennials often accumulate debt from their credit cards and other short-term forms of spending. One of the most telling results from the Credible.com survey was that nearly 20% of respondents said they will take on debt in order to finance their holiday gift purchases. Additionally, more than 6% plan to tap into their savings to do so.
This says something about how younger Americans view debt: either as unimportant or unavoidable. Despite this willingness to amass debt as they shop for Christmas and Hanukkah, roughly half of those surveyed indicated that they didn’t bother to make a budget for their holiday spending!
In a possible uptick for retailers, 40% of the 500 Millennials who participated in the survey plan on spending more than they did on gifts last year.
In any event, the main takeaway should be that the spending and saving habits of this generation are likely to depart from the example set by their parents and grandparents. It’s undeniable that consumer habits will increasingly be driven by Millennials as they displace new pensioners and recent retirees as the country’s biggest bloc of spenders.
The opinions and forecasts herein are provided solely for informational purposes, and should not be used or construed as an offer, solicitation, or recommendation to buy or sell any product.