Millennials, today’s twenty and thirty-somethings, are the dream customers of the Christmas holiday period. Born between 1980 and 2000, they have worked their way through the hard slog of their junior years in the workforce, and are now enjoying the fruits of their labour.
With the holidays just around the corner, the question every marketer, retailer, and payments facilitator wants the answer to is – what will Millennials spend their hard-earned cash on?
Generations of choices
Every generation has its own distinct attitudes and experiences. And it’s no surprise their buying habits inevitably reflect these experiences. For the generations that experienced World War I, the Great Depression and then World War II, life had few luxuries apart from an afternoon at the football or movies, and an evening gathered around the radio.
The 1950s saw an explosion of new and affordable consumer goods enter the household. This included televisions, as well as bigger ranges of clothes, recorded music and entertainment choices that allowed the Baby Boomers to
For Generation X (born from the early 1960s until 1980), their choices included even more highly-individualised purchases like the Sony Walkman (launched 1979), and the handheld video game players like the Gameboy (launched 1989).
Millennials are the first ‘digitally-native’ generation, where connected devices, as well as cheap communications and travel have shaped very different spending habits to earlier generations.
Smart choices for Millennials
That most striking possession of virtually all Millennials, the smartphone, will continue to be central to their lives. But since most people upgrade their phones whenever their mobile contracts expire, only some will get new phones these holidays.
The big difference between Millennials and previous generations is their taste for experiences such as travel and entertainment instead of physical purchases.
A survey conducted by PwC found that Millennials are likely to spend just over half their holiday budgets on travel and entertainment, compared to thirty-nine per cent of spending by members of older generations. And almost half of Millennials will spend more this holiday than last year, compared to a quarter of older shoppers. Significantly, more than half of this spending will be on gifts for others.
When Millennials do look to purchase physical items, they will be intimately tied to experiences like keeping fit and healthy.
Australian Millennials are amongst the biggest buyers in the world of smart fitness bands, which track exercise activity. According to Deloitte, twenty-five per cent of Australian Millennials own one of these devices, and they expect the trend to continue, and include smartwatches like the Apple Watch.
Doing the right thing
As their connectedness to the rest of the world has brought a greater awareness of social and environmental issues, a key factor which influences Millennials’ choices is whether the businesses they buy from reflect their own values.
With forty-seven per cent telling a Deloitte survey they believed the purpose of businesses is to improve society and protect the environment, many Millennials do not buy only for themselves, but to promote a greater good. Whatever their line of business, companies which ‘do their bit’ will go a long way to winning over Millennials as customers.