Millennials, who are individuals born between 1980 and 2000, officially outnumbered baby boomers last year, as they now comprising one-fourth of the total US population. Currently 81.1 million strong, this group is influencing society as a whole, from how we communicate to how couples divvy up finances. Totaling 21% of consumer discretionary purchases and with an estimated direct buying power of over one trillion dollars up for grabs, the millennial dollar is so influential, it’s starting to change the stock market as we know it. And the trends are revealing surprising common denominators: happiness and quality of life.
Experiences Trump Retailers
Unlike previous generations, Millennials are not as eager to accumulate the traditional life-markers of their parents and grandparents, like a car, house or even a television. According to Bloomberg Business, retailers have felt the change in financial priorities, with leisure and travel-related stocks, including pubs, airlines and pizza restaurants, outperforming retail stock. Andrew Oswald, an economics professor at Britain’s University of Warwick in Coventry, told Bloomberg that this change could be credited to millennials being a cash-strapped generation. With finances being cut into by student loans, Millennials would rather save for and spend on brands that enhance their lives, as opposed to accumulating “stuff.”
“Today’s young consumers feel like they own enough already,” said Oswald. “With their material desires almost completely exhausted, millennials need alternative roads to satisfaction. It’s now experiences that people are short on, not items.”
Bitten by the wanderlust bug, not only have half of all Millennials taken four or more overnight trips a year, 75% express an interest in travelling abroad.
The Millennial Formula
Considered the most studied, diverse, politically engaged, and self-expressive generation to date, Millennials were raised during a period of constant innovation and technological change. These overall personality traits, along with the the ability to adapt to change and become multi-tasking gurus, have shaped these individuals into a very different consumer group. According to Millennial Marketing, businesses are more likely to earn and keep the millennial dollar if:
- Their brand supports a cause. Nearly half of Millennials are drawn to brands that represent interests beyond the bottom line.
- Their new tech product is not only useful, but “cool.” It helps to be trendy; put the product has to, in the end, prove to make one’s life easier or more enjoyable.
- Their brand is entertaining. The vast number of millennials, 80% of them to be exact, requires that their brand entertain.
- Their brand allows and encourages collaboration. Nearly 40% of this group want to be included on the inside by being including in the co-creation of brands and products.
And of course, this tech savvy generation also happens to be very active on social media. Brands and businesses don't have to guess much about what this group wants or needs. An overwhelming 70% feel a responsibility to provide feedback, both good and bad, regarding a product or service experience.
The Economics of Happiness
Putting an emphasis on life experience, Millennials have emerged as the new influencers of the finance world. Sarbjit Nahal, head of thematic investing at Bank of America Corp. in London, provided Bloomberg insight into this generation embracing the economics of happiness. “Experiences help millennials shape their identity and create memories, to a greater degree than for older generations. You’ll want to look at companies focused on live sporting events, festivals, online gaming, the sharing economy, travel and even music streaming -- all of these are experiences that millennials can share with their friends.”
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