Millennials and their Spending Power

With a population of over 72 million, millennials have overtaken baby boomers as the largest generation in the United States [1] . Born between 1981 and 1996, us millennials now range from age 27 to 42 years old and we’ve attained an estimated spending power of $2.5 trillion as of 2020 [2]. We account for over a third of the current workforce and currently spend more than any other generation – an estimated $208.77 daily according to a study by Sunmark Credit Union [3]. Yet, an ever increasing portion of that daily spend goes towards rent/mortgage and general living costs. With inflation on the rise and housing costs driven exponentially higher right as millennials are finally getting a taste of financial stability, it leaves those in my generation uneasy. Can I move forward with this big investment? Will buying a house now be my last shot at homeownership? Can I afford this vacation? Everything seems so volatile and we’ve been burned before. 

Advertisers need to be mindful of what millennials are up against. All too often there are articles blaming millennials’ lack of spending habits for a particular industry’s “demise”: diamonds, soda, bar soap, cruises, department stores. While these articles mainly strive to drive engagement via finger-pointing, it’s still a short-sighted view on general spending trends. Maintaining a rigid targeting strategy in the face of changing consumer behavior won’t do advertisers any favors. We need to listen to what consumers want and find solutions that cater to their needs. What is it that millennials value?

According to a study by Eventbrite [4], millennials favor “experiences” first and foremost. Over 78% of those surveyed say they would rather put their money towards a memorable event than a desirable purchase. New experiences provide fulfillment and leave us with long-lasting memories. Through social media we are continually exposed to new locations we’ve never visited via influencers, friends’ vacation posts, and travel vlogs. Whether driven by adventure, or perhaps even a tad bit of FOMO, millennials are keen to expand their horizons and strengthen bonds with friends, family and community. And not just via travel – concerts, festivals, and events in general have grown in spend over the past decade. 

In terms of general expenditures, approximately 54% of a millennials’ shopping is completed online. Naturally, having a strong online presence is therefore an important consideration for today’s advertisers. Online shopping affords consumers with a wealth of knowledge and options; an estimated 80% of millennials will not even buy a product without first reading a review [5]. Providing product reviews, product images and video, as well as detailed product information can be a huge leg-up in securing a consumer’s confidence when making purchase decisions. While 82% of millennials may confess to making an impulse purchase if they like an item enough [6], we still tend to comparison shop. Even when shopping in-store, 53% of millennials consult the internet to find out more details about a product and view reviews [5]. I confess to recently doing the same in the hardware store for something as cheap as a $13 handsaw. Do people recommend it? Will this suffice for my project? Is there something of a similar price range people liked more? A one-minute consultation on my phone solidified my purchase, but could have just as easily dissuaded me. Such is the power of a review. Overall, about 90% of millennials say online reviews affect their decision to make a purchase, with only word of mouth exceeding that influence at 93%. Meanwhile, 75% report that they are influenced by viewing an online ad and about 72% find themselves swayed by the opinions of those they follow online [6]. 

Environmental and social responsibility are qualities that millennials do not overlook when making a purchase. Around 83% of millennial shoppers feel it’s important that a company’s values align with their own and 71% are even willing to pay more for an item if some of the proceeds go towards a charity [6]. According to Business Wire [7], millennials also lead the way in pushing for sustainability with their wallets, with 42% being willing to pay more for a sustainable product – the highest of any generation. We want to feel good about our purchases; a business’ reputation matters and a positive social or environmental impact can have a lot of sway when consumers are weighing their options.

This willingness to pay more for our values is present in spite of an ever-growing issue that millennials are confronted with: the rising cost of living. Sure, it’s something we are all experiencing, but millennials are currently at the stage where we may be finally buying our first home or deciding whether or not to have kids, so this unease can have a particularly powerful impact. According to a 2023 study by Deloitte [8], cost of living is the foremost concern of 42% of the millennials they surveyed. Of that same group, 52% reported that they are living paycheck to paycheck with 37% of millennials working a side job, either part or full-time, to make ends meet or at least supplement their current income. Areas millennials tend to cut back on to save? Those top reported areas tend to be in health and wellness, home goods/furniture, and beauty products [6]. Despite these cutbacks, the average personal debt of millennials has been calculated at $115,784 in 2022, which grew 14.7% percent from 2021. This rate of increase is surpassed only by Gen Z, who are graduating with new student loan debt. Average credit card debt for millennials alone jumped 23.4% between 2021 and 2022, leaving millennials with an average balance of $5,649 [9]. This is a much larger rate of increase compared to the older generations (X: 15%, Boomer: 7.6, Silent: 4.4%), though millennials comparatively have a lower overall balance to these same generations.

Regardless of these hurdles, millennials continue to grow their savings. In a 2020 survey by Bank of America [10], a reported 73% of millennials are currently saving up money, compared to 63% two years prior. Approximately 59% of millennials now have over $15k saved (up from 47% in 2018), and 24% of millennials have over $100k saved (up from 16% in 2018). The same report found that millennials also started saving at an earlier age, 24, than the previous generations of Gen X and Baby Boomer, who began saving at ages 30 and 33 respectively. Despite these improvements, 51% of millennials still described feeling behind where they should be in terms of financial growth. Those in my generation are finding it difficult to be optimistic as inflation and overall cost-of-living increase chip away at the spending power of our hard-earned savings. A whopping 73% of those surveyed were “not optimistic” about their financial future.

Advertisers have long struggled with targeting the millennial demographic, but above all else, in order to succeed in reaching this generation they have to be open to a change of approach. There’s a lot of talk about millennials not following the traditional life trajectory, hitting supposed milestones at a later point than previous generations. It’s important to remember that each generation develops under unique influences, with rapidly advancing technology and economic recession being trademarks of the millennial experience. Striving to understand the motivations of millennials and what influences their spending behaviors will allow for advertisers to create a more mindful strategy. Millennials don’t confine themselves to the expectations of past generations – we adapt, redefine, and push for change. Advertisers will need to follow suit and Brkthru can help guide the way. If you need assistance developing a new targeting strategy or refining your current approach, our team is all ears!

Reach out to start a conversation: 

[1] Statista:

[2] Ypulse:

[3] Sunmark Credit Union:

[4] Eventbrite:

[5] Invespcro:

[6] 5WPR:

[7] Business Wire:

[8] Deloitte:

[9] Experian:

[10] Bank of America:

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