Millennial Buying Trends and the Consumer Landscape

Millennials (spanning ages 27 to 43) are currently the largest generational segment in the US, making them one of the most critical for marketers to win. Nevertheless, a feeling of being behind in life persists with this generation. Many Millennials feel financially insecure with high inflation contributing to increased (financial) stress. Moreover, rising interest rates, lingering student loans, and diminished earning potential has many Millennials feeling locked out of the housing market and feeling pessimistic about their financial future.

Millennials have now fully transitioned out of the ‘young adult’ life stage and are now more established in their careers, are buying houses, and having kids. The accumulation of these milestones catapults Millennials into their prime spending years which makes them a primary target group for industries ranging from automotive, to household appliances, to baby products, and travel.

Marketers will indeed continue to shift their focus to younger consumers, as Gen Z claim their significance as a trendy and highly important target group. But Millennials are certainly not out of style, as they hold influence within all industries. Although they are less wealthy than previous generations, they still control a notable share of total wealth. Here at Mintel, we expect to see more advertisements targeting middle-aged consumers as brands devote resources to targeting Older Millennials.

Millennials are a highly health conscious generation and are therefore willing to invest in their health now, with notable interest in personalized health recommendations. While Older Millennials have concrete health goals such as eating healthily, Younger Millennials are focused on their mental well-being making them a key target audience for services aiming to remove barriers to mental health treatment. In the long term, Millennials’ interest in health and wellness will continue to grow as they enter the middle age life stage which suggests continued opportunities for products like wearable devices and other health services.

Despite the potential cost savings, 66% of Millennials would choose to prioritize ethics and would choose not to purchase from a brand or retailer that engages in unethical behavior. Brands looking to appeal to Millennials will have to look beyond the price tag. Although price is a leading purchase factor for Millennials, many, especially Black Millennials, are not willing to compromise on their morals and values, including social and environmental values, to score a good deal.

Although environmental issues are on all Millennials’ minds, Latino consumers are even more affected by extreme weather events, as they are more likely than non-Latinos to experience heat waves, powerful hurricanes, sea level rise, and floods. Mintel’s market research shows that 57% of Latino Millennials feel guilty about their unsustainable habits and behaviors – their concerns are contributing to their perception that brands need to be more responsible when it comes to their environmental impact.

Over 40% of Asian Millennial Americans agree that they want to see people like themselves featured in brand advertising more often. After years of under-representation, things are changing, thanks in part to the huge fandom around K-Pop music and increased accessibility of Asian content through streaming systems. However, Asian Americans have also experienced renewed racism due in part to COVID-19, with hate crimes against the AAPI community more than doubling between 2019 and 2020. In an environment like this, showing support for the Asian community can make a major difference. This starts with the visibility of Asian Americans in ad campaigns. However, to resonate with this consumer group successfully, such portrayals must be authentic, need to reflect the true diversity of the Asian American experience, and need to demonstrate a genuine commitment.

A successful example of an inclusive campaign is P&G’s ‘The Name’. The campaign focused on the all too common experience of having non-Asians stumble over names. An ad depicting this problem guided viewers to a microsite where they were invited to share their names and record and type in their spelling. The pronunciation data was then used to power a tool that companies can leverage to ensure they address employees and customers appropriately.

From the Great Recession and soaring college costs to sky-high inflation rates, Millennials have experienced numerous financial challenges, resulting in a less wealthy generation. With many feeling like financial security constantly eludes them as they face a meager economic outlook, over half of Younger and Older American Millennials plan on working for as long as they are able. Millennial buying trends are influenced by products’ and services’ overall value as many want to make their hard-earned money go as far as possible.

However, not all Millennials experience these financial stressors in the same way. This is because Millennials are a generation characterized by wide economic gaps. For example, White Millennials are more than twice as likely as Black Millennials to describe their financial situation as healthy, and Hispanic Millennials feel the most uncertain about their financial future, which makes them far more inclined to trade down to private labels. Hispanic Millennials may therefore be receptive toward services that help them save money now as well as plan for the future.

Financial service companies that recognize the financial disparities within this consumer segment have already started to tackle Millennials’ economic anxiety through technology by providing financial education in the form of budgeting apps, investing apps, and financial planning information sources such as websites, books, podcasts, and more. Particularly under the current economic conditions, buy-now-pay-later options are also appealing to Millennials.

According to Mintel’s market research, many consumers are feeling stressed and burnt out after years of global uncertainty caused by the pandemic, global conflicts, and climate change. As a result, consumers are seeking emotional relief. Older Millennials are a key consumer group for stress-reduction products and services by food and drink brands, as 34% of Older Millennials drink beverages that feature calming and relaxing claims indicating existing interest in such products.

In connection with this, throwback nostalgia marketing has emerged as one of the Millennial marketing trends that brands can tap into. Although this generation is concerned about their health, they don’t want to feel like they’re making a sacrifice when making healthy food and beverage choices. Blending the fun with the functional in the food and drink category is key for brands who intend to market their products to this generation. One way of resonating with Millennials is through branding and packaging that make them reminisce about the good old days. Growing disruptive food and drink brands such as Olipop and OffLimits Cereal successfully combine better-for-you claims with fun flavors and branding that evoke a sense of nostalgia.

Millennials are having fewer children, are deciding to have children later in life, or to not have children at all. 58% of householders aged 30 to 44 have children and while the share of Millennials with children is expected to increase over time, childless Millennials will represent a relatively large consumer group. Although this shift in family structures and planning, as well as the declining birthrate, could mean a dip in revenue for the baby products’ industry, it also carries significant opportunities.

The general delay in childbirth means Millennial parents are more financially secure when becoming first time parents compared to previous generations. Moreover, Millennial parents can spend more per child than larger families as they’re having fewer children. Therefore, premium-tier products such as environmentally friendly diapers and clean-label baby personal care products are well placed to appeal to this consumer segment. The subsequent rise of more expensive premium-tier baby brands will offset product volume declines stemming from declining birth rates. Meanwhile, the growing childless Millennial segment represents a key consumer group for brands to target. These Millennials have the disposable income for high ticket items as well as the time and flexibility to pursue their hobbies and passions including travel.

Power of the Private-Label. One-fourth of Millennials follow a strict budget to stretch their incomes as far as possible, and more than half believe private label brands are just as good as name brands. They are, however, willing to pay more for quality goods. Premium private-label brands may therefore hit the sweet spot between value and quality among Millennial consumers, suggesting opportunities for retailers to promote their premium private-label products.

Millennial parents are more likely than non-parents to exhibit budgeting behaviors, as they need to cover the costs of the entire family. Brands can offer this cohort financial relief through price-match options, discounts, flexible payment plans, and loyalty programs. The circular shopping economy also offers parents a way to stay within their budget, as shopping secondhand or renting items is a way for parents to get what the family needs, without being financially or sustainably wasteful.

Quality over Quantity. But, despite savvy shopping behaviors, quality can build lasting brand loyalty among Millennial consumers. Many are willing to spend more on quality items that last longer than go for the cheapest option. Brands can therefore highlight product durability, timelessness, craftsmanship, or messages centered on long-term savings, or energy-efficiency to encourage Millennials to splurge on premium-tier products or services.

Come Fly With Me. Although Millennials across the board follow a strict budget, they are ready to splurge on experiences like vacations. As a result, the travel industry is booming with Millennial parents seeking vacations focusing on convenience and simplicity, making all inclusives and cruises particularly appealing to them. Millennials’ willingness to pay for convenience suggests key upcharge opportunities within the travel industry for offerings that reduce travel stress.

Over half of Millennials actively embrace online shopping for all their needs, positioning them as a crucial online target audience more so than any other generation. While apparel, personal care, and food and beverages are the products bought most frequently online, brands will want to promote a wide range of items and ensure a smooth and easy shopping experience. Convenience remains key for Millennials and the ease of returning products dictates where they shop as 77% agree that they are less likely to shop with a brand or retailer if they have a bad returns experience.

A significant 8 in 10 Millennials look at many different products and brands before deciding which one to buy. Millennials were the first generation on social media, which has developed into a go-to source for product information and recommendations for 88% of Millennials. Over half of first time parents of children under five say they use social media recommendations when purchasing baby personal care products. While YouTube is a clear leader, many also consider TikTok a good place to gather product information. TikTok may therefore be a key social media platform for brands targeting Millennial parents, as they can use the platform to help educate Millennial parents by producing short informational content that is also engaging and fun.

Millennials trust others’ opinions online. Therefore, beyond the price of online offers, customer reviews are a crucial purchase factor, making social media key in the Millennial shopping journey, as platforms are ripe with short-form video content reviewing specific products and brands. Instead of perceiving this as a challenge, companies should leverage customer feedback to identify shortcomings, and take reviews to the next level to facilitate decision-making. As these platforms challenge traditional ways of product discovery, brands are well advised to utilize their social media channels as a vehicle to build relationships with Millennial consumers and a great tool to drive product discovery.

Millennials are often dubbed as digital natives. As a consequence, they are open to brands’ adoption of AI innovations that integrate both online and physical channels. Almost half of both Younger and Older Millennials agree that AI will have a positive impact on society. From budgeting apps, to health trackers, to smart home appliances, Millennials will continue to adopt new technologies that provide convenience and that help them accomplish their personal, financial, health, and career goals.

Through Mintel’s research, we were able to identify a focus on finances, health, and wellbeing as the most prominent Millennial consumption trends, and that childless Millennials are a segment within this demographic worth investing in as they keep growing in number.

To successfully target Millennials, brands can adopt these key marketing strategies to help align your business with the latest trends in consumer behavior.

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