Inside the Mind of Generation X: Millennial Spending Habits
- Generation Y is unlike previous generation of customers, in terms of spending habits and preferences.
- Millennial customers are more likely to seek great experience, rather than great products.
- Social media integration is an important aspect of marketing to Millennials.
The impact of Millennials on the economy will be significant since they are now the largest generation in the history of the United States. This means they have the power to affect your business, too.
To “survive” this demographic change, you need to adjust to the preferences of Millennials — and this generation definitely has some new priorities.
What Makes Millennials Unique
Millennials have various peculiarities that make them stand apart, such as their active lifestyle, tech-savviness, taking longer to marry, etc. However, out of those set of behaviors, one of them is especially important for the businesses, and that is that 3 out of 4 Millennials prefer to spend money on the experiences rather than consumer goods.
But the truth is that those are not just millennials, this trend started affecting everyone. Studies show that people are more satisfied when they spend the money on living compared to possessing. It is interesting what could be a reason for such a change because previously possessing a property was prioritized as it served as a safety guarantee.
One reason can be the social networks. 36% of Generation Y members reported that they picked a travel destination due to seeing it on social media. Today, videos of people traveling, exploring and living can be found more on your Instagram or Facebook feed compared to a fancy piece of clothing or a luxurious car.
The motivation behind buying a product has also shifted from only materialistic purposes. Gen Y became very aware of the society and environment where they live. Purchasing a product or a service that in return “gives back to the society” has become a new trend now. Companies that serve some purpose became very popular in this generation.
A perfect example of this is a company called 4Ocean. The idea of the company is to collect the plastic from the oceans that contaminate the environment and create bracelets by recycling the materials. The company became very popular due to its purpose and the value that it offers.
Such changes in consumer spending behavior and preferences means that the businesses should also change their strategies and follow the trend.
Exceptional customer service: Starbucks and Apple as role models
These two organizations are one of the leaders in their industry. They have such a strong influence that their new products and novelty campaigns make competitor companies to follow the path. However, the habits and preferences of the customers were not easily influenced, on the contrary, consumers shaped how those organizations started to operate.
Starbucks and Apple realize the importance of keeping up with the trend and satisfying the needs of the customers. When Apple does advertising they always focus on the experience, rarely will they talk about the specifications of the phone.
iPhone commercials communicate the new features through the experiences of people. For example, when showing a new camera, instead of going into the details about its megapixels, Apple stresses on the experience when using it, such as a family trip or friends going out.
As an example, the new HomePod commercial mentioned not even a single detail about the product but rather concentrated on the customer’s persona and the experience when they use the product, which soon went viral and loved by people.
Apple is not the only one who realized this. Starbucks has been doing its best not to sell only coffee and provide something more. In fact, today Starbucks does not sell coffee, it sells something else. It just takes you several seconds to enter the café and notice busy students studying and close friends chatting in the cafe.
Maybe there is a reason why Starbucks has various electrical outlets, free Wi-Fi and comfortable chairs available at every store. Yes, there is a reason behind it. It is because they sell “quality time” experience and the coffee became something additional. The company realized that only by selling beverages it would not lead the industry for a long time.
Let’s be honest, your local café serves coffee for 1$ while Starbucks serves it for 4$. But you still decide to go to Starbucks. The reason for this is because Starbucks adds enjoyable experience behind the coffee and despite the price difference still manages to keep you as a returning customer.
Marketing to Millennials: You can do it!
You don’t have to be Apple or Starbucks to provide experiences to your customers. One thing you need to do is to understand what additional value you can provide with respect to the industry you operate in. If you have a retail business, you can provide cafés or spaces where your customer can have a quality experience.
Try making your products more valuable to the environment. Give back to the society by donating or participating in environmental-friendly activities. Your customers will appreciate it and have a feeling of pride when shopping with you.
And also remember that you don’t have to make it complicated. There is no need to start thinking about providing a “big experience” in the beginning. Maybe just a small value will serve you more from the start. Start small, examine and increase according to the insights. Your customer will appreciate every effort of yours.
