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Zeroing in on the Purchasing Behaviors of Millennials
Posted: July 11, 2012
At 50 million strong in the U.S. today, millennials, defined as adults aged 18-34, are demonstrating more volatility and showing less fiscal confidence than average shoppers. These views are significantly impacting their purchasing attitudes and behaviors. Understanding these shoppers is critical to CPG and retail success, because millennials are predicted to spend $65 billion on CPG products during the next decade. SymphonyIRI announced these and related findings of its inaugural SymphonyIRI Shopper Sentiment Index in the latest Times & Trends research, “Millennial Shoppers: Tapping into the Next Growth Segment.”
Findings from the Shopper Sentiment Index reveal that millennial shoppers have demonstrated a more cautious and volatile outlook compared to other age groups during the past 18 months. This reflects the environment in which they live at a critical juncture in their adult lives. For various reasons, millennials tend to head larger-than-average sized households. Meanwhile, they have relatively low levels of household income. They are 11% more likely to have incomes of $25,000–49,000, 14% more likely to have incomes of $50,000–99,000, but 18% less likely to earn six figures than other Americans. As an added hardship, the recent recession has hit millennials hard; the Bureau of Labor Statistics reports a 2011 unemployment rate for this group of 12%, as compared to 9% for the general U.S. population. Underemployment, too, is a huge challenge.
SymphonyIRI’s MarketPulse survey also notes that millennials are coping through several money-saving activities. This group is 46% more likely to use at-home beauty treatments to save money, and is also 18% more likely to “self-treat” where possible to avoid spending money on doctor’s visits.
Another report finding is that communication through new media has an outsized impact on millennials. A group that has grown up in the age of digital media and smart devices, this technology-savvy group is the first “always connected” generation. As expected, new media are essential to millennials’ process of learning about CPG products. When making brand decisions, millennials are 262% more likely than the average shopper to be influenced by smartphone apps, 247% are more likely to be influenced by blogs or social networking sites, and 216% are more likely to be influenced by in-store touch screen displays.
“Millennial shoppers remain an important group to consider when creating pricing and marketing plans,” says John McIndoe, senior vice president of marketing, SymphonyIRI. “A nuanced group that behaves much like the savvy, cost-conscious consumers of the recent recession, they are very different in how they interact with CPG brands and in how they seek deals. Understanding the unique characteristics of the millennial generation, or any group of shoppers, is essential to building powerful and lasting relationships.”