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The top millennial buying habits and insights for 2021

by Khoros staff | Jul 01, 2020

Millennials are a force: the first digitally native generation has overtaken baby boomers as the largest adult population in America. Millennials now range in age from 24 to 39, and many have settled down with careers, homes, and families. Their buying power is undeniable: By 2030, the collective annual income of Millennials worldwide is expected to exceed 4 trillion dollars.

That figure has retailers doing a double-take. But while millennials present a huge market opportunity, they have high expectations of brands and low regard for advertising, meaning brands must use different tactics to reach them. Millennials often scoff at traditions, and they care about a brand’s values and actions within their communities. To draw the interest of this oft-maligned yet powerful group, you need to understand who they are and how they make their purchases.

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Millennial statistics: Who are millennials?

Anyone born between 1981 and 1996 is a millennial

(Source: Pew Research Center)

The youngest millennials will turn 24, and the oldest 39, in 2020. If you imagined someone younger when picturing millennials, you may be looking for gen Z.

There are approximately 72.1 million millennials in the U.S.

(Source: Pew Research Center)

Millennials surpassed baby boomers as the largest living adult generation in 2019. This means that millennials make up a huge percentage of consumers and have immense buying power. It was estimated that millennials will spend $1.4 trillion in 2020.

34% of millennials have a bachelor’s degree or higher

(Source: Pew Research Center)

Millennials are a highly educated generation. In fact, according to Pew Research, they are the highest educated generation. 34% of millennials have at least a bachelor’s degree, while only 13% of the silent generation and 24% of baby boomers can say the same.

Millennial spending habits: How do millennials spend their money?

Millennials are more likely to make purchases online

(Source: MarTech Advisor)

A major part of marketing strategy includes bringing your brand to where your customers are. In the case of millennials, well, they’re online. MarTech Advisor reports that 54% of millennials make purchases online.

So if your brand targets millennials, it’s important to be visible online. Providing an engaging website with a well-thought-out user interface and seamless customer support can make your brand stand out from competitors. It’s also important to have a robust organic — and possibly even paid — social media campaign. Millennials aren’t the only generation on social media today, so if you’re not posting at least to Facebook, Instagram, Twitter, or LinkedIn, you may be missing out on key demographics. Learn more about how to manage social media with enterprise software here.

Millennials will pay a premium for luxury and popular items

(Source: Charles Schwab)

Millennial shoppers admit that they are willing to pay more for items that are popular or offer a unique experience. According to Charles Schwab, 60% of millennials agreed that they would buy a cup of coffee that costs more than $4, compared to just 29% of baby boomers. Additionally, 79% of millennials said they would spend more money to dine out at a popular restaurant.

For brands, this presents an opportunity to provide an experience with your product. Doing so can result in an increase in your brand’s perceived value.

Millennials spend money on technology and fashion recreationally

(Source: Charles Schwab)

Millennial shoppers are likely to spend more money than required by necessity for new gadgets and clothing. In Charles Schwab’s Modern Wealth Index report, 76% of millennials said they would spend money on new tech products, and 69% reported that they’d buy clothes they didn’t need. These insights show brands what millennials are truly interested in and can be used to guide future strategy.

Millennial shopping habits: What motivates millennials to shop?

57% of millennial women say that their purchase decisions are driven by a brand’s values and stance on issues that are important to them

(Source: Business Wire)

Millennial women in the U.S. have $170 billion in buying power — 85% of the total buying power of U.S. millennials — and social responsibility matters to them. As a brand, it’s important to clearly define what values and morals matter to your company and convey those values to your audience in a thoughtful, authentic way.

50% of millennials say that positive customer service experience is a factor in their loyalty to brands

(Source: Morning Consult)

You already know that, in the age of social media, one well-placed disgruntled Tweet can negatively impact your brand’s bottom line, and that’s frightening. But if you work towards ensuring positive care experiences for all of your customers, you can build up goodwill for when you need it.

30% of millennials feel loyal to brands

(Source: Inmoment)

We know that brand loyalty is an important goal for brands. When a consumer is loyal to your brand, that loyalty can be an airbag during a crisis, and it can mean consumer advocates in the wild. Still, brands have the potential to build a great deal more loyalty; just 30% of millennials feel loyal to brands. Millennials want to feel connected to brands, they want to know that brands they buy from share their values, and they want exceptional customer service. Meeting these expectations builds loyalty.

60% of millennials say they’ve held relationships with specific brands for 10 or more years

(Source: Inmoment)

The median millennial age is 30, and the majority of millennials formed lasting brand relationships in their twenties, or even earlier. Building lasting relationships with millennials is incredibly important, even when it comes to the youngest millennials, because, even if they don’t command the highest purchasing power yet, they tend to stay loyal.

70% of millennials will go out of their way to buy from a brand they feel loyal to

(Source: Inmoment)

Millennials truly are distinct from other generations: their purchasing decisions aren’t just about the product or service, or even the ease of purchase. That nearly three-quarters of millennials will devote their time and energy to shopping from a specific brand to which they feel loyal is a real, tangible benefit of fostering loyalty in customers.

How can marketers speak and connect with millennials?

The size of the millennial generation and its collective buying power is impossible for marketers to ignore. But to catch the interest of this highly-educated and skeptical generation, brands will need to work harder to connect with audiences on a deeper level.

Khoros provides the marketing and customer care solutions that enterprise businesses can use to identify consumer insights and build customer relationships. If you’d like to get a first-hand look at our award-winning solutions, schedule a demo today.

For more consumer insights, see our Forrester Report: Getting to Know Your Customers.

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