The Millennial generation is growing up and with it comes a change in spending habits, experts told GOURMET INSIDER®. The generation is no longer one that is just entering the workforce, but is becoming more established in careers and is even beginning to shake some student loan debt, which has helped to free up money for discretionary spending.
“The thing that retailers have to realize now is that the Millennial generation is growing up,” said Katherine Cullen, director of industry and consumer insights for the National Retail Federation (NRF). “Many of them are in their late 30s, they are starting to become more established in a job perspective and a financial perspective. They’re also starting families and potentially doing things like buying homes. As a result, their shopping patterns when it comes to what they are buying and what they’re looking for are starting to change as well as their overall buying power.”
However, there is a growing divide in the spending habits of the generation, these experts noted, as those Millennials who are settling down and having families of their own are spending money differently than those who are not yet entering that phase of life.
According to Cullen, Millennial parents are the part of the demographic that is beginning to take the reins in retail. She explained that in NRF research, Millennial parents have more consumer confidence than their younger counterparts.
“This group came of age during the recession so they are still very value-focused. Even though their financial situation has improved and they are feeling confident, they have a value mindset. They want to find a deal; they are savvy and are willing to do research— often on their phones— to find the best value, which is not always the lowest cost. There is an emphasis on balancing cost and quality,” Cullen said.
Shae Hong, CEO of Sensio, said that he has been seeing value as top of mind to this consumer as well and that manufacturers need to be conscious of this preference.
“At the end of the day, value is a big component for them given their budgets and disposable income. And, most importantly, Millennials in general appreciate brand messaging that speaks to them as their peer and not as an authority like a heritage brand or premium category brands,” said Hong.
Cullen also explained that Millennial parents care about what a brand stands for and believes that shopping a brand is a reflection on their own values and who they are. She noted that concerns range from socio-economic issues to environmental impact, but this group is one that will be loyal to a brand if it upholds its image. However, if it doesn’t, Cullen said all bets are off.
“They care what brands stand for and they will stop shopping a brand if those values don’t align with their own,” she said.
While shopping online is convenient and a regular occurrence these days, an engaging experience still needs to be had to attract customers into retail locations, Cullen said.
“There is still a desire from shoppers to really connect and engage,” Cullen added. “Brands and retailers have really been working on events to attract the consumer. It’s harder these days just to compete on price, selection or convenience, so a way to really differentiate, acquire customers and retain them is through an engaging experience or a unique experience.”
Cullen pointed to in-store events in retail locations spanning from Walmart to independent retailers and said NRF research showed that these types of events appealed to Millennials.
“More than four in 10 Millennials said they would be interested in these events and experiences, which is one more than any other generation,” she said.