One of the largest generations in history is about to move into its prime spending years. Millennials are poised to reshape the economy; their unique experiences will change the ways we buy and sell, forcing companies to examine how they do business for decades to come.
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Who are they?
A different world, a different worldview. Millennials have grown up in a time of rapid change, giving them a set of priorities and expectations sharply different from previous generations.
Born Between
Source: Goldman Sachs Global Investment Research
- A Larger Cohort
- The First Digital Natives
- Social And Connected
- Less Money to Spend
- Encumbered with debt
- Different Priorities
A larger Cohort
The Millennial generation is the biggest in US history—even bigger than the Baby Boom.
M = Million
- 5m
- 4m
- 3m
- 2m
- 1m
- Population
- 15
- 20
- 25
- 30
- 35
- 36
- 40
- 45
- 50
- 51
- 55
- 60
- 65
- 70
- Age in 2015
92 M
Millennials
61 M
Generation X
77 M
Baby Boomers
Source: US Census Bureau
The first digital natives
Millennials have grown up with the internet and smartphones in an always-on digital world.
- Millennials
- Gen X
- Boomers
"Which online activities do you regularly do for fun and entertainment?"
Source: Prosper Insights & Analytics for the Media Behavior and Influence Study
Social and connected
The online world - and social media in particular - have given the Millennials a platform to reach the world.
"After searching online, how do you communicate with others about a service, product, or a brand?"
Source: Prosper Insights & Analytics for the Media Behavior and Influence Study
Less money to spend
Lower employment levels and smaller incomes have left younger Millennials with less money than previous generations.
Mean income for 15–24 year olds as a % of total population
Source: Bureau of Labor Statistics
Encumbered with debt
Student loan payments are taking up a growing chunk of postgraduate Millennials' income.
$
Mean Student Loan Balance for 25 year olds, in US Dollars
Source: Federal Reserve
different priorities
With less to spend, they're putting off commitments like marriage and home ownerships.
% of adults 18-31 married and living in their own household
Source: Pew Research Center,
Current Population Survey
Housing
As Millennials enter their peak home-buying years, their reluctance to enter the housing market could change. The cohort’s sheer size, plus its desire to settle down in the future, could lead to a surge in home sales.
Peak Home-Buying Years
y/o y/o
Source: Goldman Sachs Global Investment Research
- Snug in the nest...
- But waiting to fly
Snug in the nest...
A growing number of Millennials are choosing to live at home with their parents.
% of 18-34 year olds living with parents
Source: IPUMS-CPS, IPUMS-USA and
Goldman Sachs Global Investment Research
- Current Population Survey
But waiting to fly
An overwhelming percentage of Millennials say they want to own a home sometime in the future.
% of renters who plan to buy a home some day
Source: Trulia
Love & Marriage
Millennials have been putting off significant milestones like marriage and children. But that doesn’t mean they want to stay single forever.
Median
marriage
age
2010s y/o 1970s y/o
Source: Goldman Sachs Global Investment Research
- Marriage can wait
- Putting off parenthood
- Never say never
Marriage can wait
The percentage of young people married and living on their own has dropped by more than 50% since the 1960s.
% of 18-31 year olds married and living in their own household
Source: Pew Research Center,
Current Population Survey
Putting off parenthood
Millennials aren't just putting off marriage. They're also waiting longer to have children.
- 1970s
- 1980s
- 1990s
- 2000s
- 2010s
% of women having children by age
Source: IPUMS-CPS and Goldman Sachs Global Investment Research
Never say never
Millennials may be putting it off, but polls have shown they do want to have their own families some day.
Source: Pew Research Center
Access, not ownership
It’s not just homes: Millennials have been reluctant to buy items such as cars, music and luxury goods. Instead, they’re turning to a new set of services that provide access to products without the burdens of ownership, giving rise to what's being called a "sharing economy."
“25 years from now, car sharing will be the norm, and car ownership an anomaly.”
- Jeremy Rifkin, Author and Economist Source: Goldman Sachs Global Investment Research
- The hierarchy of needs
- The renter generation
The Hierarchy of needs
The must-haves for previous generations aren’t as important for Millennials. They’re putting off major purchases—or avoiding them entirely.
- 15% Extremely
Important - 25% I might purchase
one if I really need it,
but indifferent otherwise - 5% I do not feel
strongly about it
CAR
30 %
- 30% I do not intend to
purchase one in
near future - 25% Important,
but not a big priority
- 10% Extremely
Important - 10% I might purchase
one if I really need it,
but indifferent otherwise - 25% I do not feel
strongly about it
LUXURY BAG
30 %
- 30% Important,
but not a big priority - 25% I do not intend to
purchase one in
near future
- 15% Extremely
Important - 15% I might purchase
one if I really need it,
but indifferent otherwise - 20% I do not feel
strongly about it
TV
30 %
- 30% Important,
but not a big priority - 20% I do not intend to
purchase in
near future
- 7% I might purchase
one if I really need it, but indifferent otherwise - 8% I do not feel
strongly about it - 15% Do not intend to
purchase in
near future
HOUSE
40 %
- 40% Extremely
Important - 30% Important,
but not a big priority
"How important is it for you to own the following?"
Source: Goldman Sachs Fortnightly
Thoughts intern survey, 2013
The Renter generation
A growing percentage of older millennials are choosing to rent, not buy.
52%
2005
60%
2013
Renters as a % of total population, 25-34 years
Source: Organization for Economic Co-operation and Development
Brands and retail
Millennials’ affinity for technology is reshaping the retail space. With product information, reviews and price comparisons at their fingertips, Millennials are turning to brands that can offer maximum convenience at the lowest cost.
% of Millennials
Who Compare
Prices in Store
%
Source: AIMIA Inc. “Born this Way: US Millennial Loyalty Survey” ©2012
- Beyond the brand
- The power of social
- Clicking to buy
- Searching for value
Beyond the brand
When marketing to Millennials, a strong brand isn't enough to lock in a sale.
- Strongly agree
- Tend to agreee
- Tend to disagree
- Strongly disagree
- Don't know
"When I shop, I always try to buy branded products"
Source: Ipsos MORI Global Trends 2014;
(16k respondents across 20 countries)
The Power of Social
If brands are shrinking in importance, social media is growing. Millennials are turning to their online networks when making purchasing decisions.
"When a brand uses social media, I like that brand more"
Source: Association of National Advertisers, Barkley, SMG, BCG
Clicking to Buy
Unsurprisingly, the generation that lives online, buys online.
Purchased something on the internet the last 12 months, UK
- 16-24
- 25-34
- 35-44
Source: Office for National Statistics, United Kingdom
Searching for Value
Quality is still key for Millennials, but price is a more important factor than it is for other generations.
"What factors make you loyal to a brand?"
- Millennials
- Non-Millennials
Source: AIMIA Inc. "Born this Way: US Millennial Loyalty Survey" ©2012
Wellness
For Millennials, wellness is a daily, active pursuit. They’re exercising more, eating smarter and smoking less than previous generations. They’re using apps to track training data, and online information to find the healthiest foods. And this is one space where they’re willing to spend money on compelling brands.
% of 12th graders who
disapprove of people
18 or older smoking
1 or more packs of
cigarettes a day
2013 % 1998 %
Source: monitoringthefuture.org
- Defining healthy
- Smoking and drinking
- Fitness focused
Defining Healthy
For Millennials, “healthy” doesn’t just mean “not sick.” It’s a daily commitment to eating right and exercising.
- Millennials
- Gen X
- Boomers
"What's your definition of healthy?"
Source: What's Your Healthy Survey, Aetna 2013
Smoking and drinking
As young Millennials pursue wellness, they’re turning away from unhealthy habits like drinking and smoking tobacco.
“Do you disapprove of people (who are 18 or older) doing the following…?"
Source: monitoringthefuture.org
Fitness Focused
How important is wellness to the Millennials? As their consumption in other areas drop, they’re willing to pay more for athletic gear.
- Athletic Brands
- Total industry (PCE)
Year-over-year sales growth of athletic apparel and footwear brands vs growth in total apparel and footwear spending
Source: Company data, Personal Consumption Expenditures (PCE) from Bureau of Economic Analysis, Goldman Sachs Investment Research
The Takeaway
The Millennial generation is the largest in US history and as they reach their prime working and spending years, their impact on the economy is going to be huge.
Millennials have come of age during a time of technological change, globalization and economic disruption. That’s given them a different set of behaviors and experiences than their parents.
They have been slower to marry and move out on their own, and have shown different attitudes to ownership that have helped spawn what’s being called a “sharing economy.”
They’re also the first generation of digital natives, and their affinity for technology helps shape how they shop. They are used to instant access to price comparisons, product information and peer reviews.
Finally, they are dedicated to wellness, devoting time and money to exercising and eating right. Their active lifestyle influences trends in everything from food and drink to fashion.
These are just some of the trends that will shape the new Millennial economy.
FAQs
Millennials Infographic? ›
Strauss and Howe ascribe seven basic traits to the millennial cohort: special, sheltered, confident, team-oriented, conventional, pressured, and achieving.
What are the 7 basic traits of Millennials? ›Strauss and Howe ascribe seven basic traits to the millennial cohort: special, sheltered, confident, team-oriented, conventional, pressured, and achieving.
What are the 5 characteristics of Millennials? ›- Millennials are technologically savvy. ...
- Millennials are civic-oriented. ...
- Millennials are conscious. ...
- Millennials are global citizens. ...
- Millennials are entrepreneurial. ...
- Millennials are flexible.
- Values meaningful motivation. ...
- Challenges hierarchical status quo. ...
- Places importance on relationships with superiors. ...
- Intuitive knowledge of technology. ...
- Open and adaptive to change. ...
- Places importance on tasks rather than time. ...
- Passion for learning.
| Generations | Born | Current Ages |
|---|---|---|
| Millennials | 1981 – 1996 | 27 – 42 |
| Gen X | 1965 – 1980 | 43 – 58 |
| Boomers II (a/k/a Generation Jones)* | 1955 – 1964 | 59 – 68 |
| Boomers I* | 1946 – 1954 | 69 – 77 |
Due to their independent nature, Millenials are not as interested in teamwork as other generations. Millennials do not have as strong a work ethic, with an average of 38.8 hours spent at work a week compared to previous generations who both average above 40 hours8.
What are stereotypical characteristics of a millennial? ›Millennials, the generation that includes those born between 1980 and 2003, are commonly described as lazy, poorly prepared and without aspirations.
What do millennials value most? ›What do Millennials value most? Millennials value experiences, personalization, authenticity, and transparency. They appreciate companies that are socially and environmentally conscious, and also value flexibility, communication, and collaboration.
What is a millennial attitude? ›Issues that matter to Millennials
Millennials as a whole also demonstrate more optimism about the future than the other generations. They are more passionate than the older generations, with 27.2% falling into the Passionate group compared to 14.2% of Baby Boomers and 18% of Generation X.
So what do millennials do all day? They spent more time working, providing child care and taking part in educational activities than their older peers. But they spent less time than nonmillennials on household chores, civic or religious work and leisure activities.
Which generation is the wealthiest? ›
Baby boomers have the highest household net worth of any US generation. Defined by the Federal Reserve as being born between 1946 and 1964 (currently in the ages between 59 and 77), baby boomers are in often in the sunset of their career or early into retirement.
What is the parenting style of millennials? ›Overall, according to the results of a poll conducted by Time, millennials have a more laid-back approach compared to previous generations. Millennial parents value work-life balance for themselves and their children. They aren't too concerned about filling their kids' schedules with tons of organized activities.
What is the cut off for millennials? ›If you were born between 1981 and 1996, you are a millennial. Anyone born after that is in a different generation.
What is unique about millennials? ›The generation has unique attributes such as being web-savvy, curious, independent, and tolerant. The millennials grew up in an electronic and online environment that created their eagerness to acquire new skills.
What makes millennials different? ›Flexibility and Multitasking. As already mentioned, the Millennial Generation is able to accept different cultures. Hence, flexibility means that Millennials are able to work with new people, places, and situations. Although they do not expect to change, they are ready to accommodate to new things and people.
What are millennials also known as? ›GENERATION Y OR THE MILLENNIALS: DIGITAL NATIVES
The revolution was shaped by the millennials or generation Y. Also known as digital natives, millennials are those born between 1982 and 1994 and technology is part of their everyday lives: all their activities are mediated by a screen.
Flexibility and Multitasking. As already mentioned, the Millennial Generation is able to accept different cultures. Hence, flexibility means that Millennials are able to work with new people, places, and situations. Although they do not expect to change, they are ready to accommodate to new things and people.
What is the difference between Gen Z and millennials? ›Generation Z was born between 1995 and 2012, whereas Millennials were born between 1981 and 1996. In 2019 the oldest Millennials turned 40, which means that they have been part of adult life for a while.
Are millennials family oriented? ›Millennials will emphasize family experiences over material things. An emphasis on travel, learning and experiences is characteristic of their generation and a pattern they are likely to carry over into their parenting.
What are seven qualities of millennial that can make them excellent employees? ›- Curiosity. Millennials are a curious generation. ...
- Individuality. ...
- Social good. ...
- Financial stability. ...
- Technological innovation. ...
- Regular feedback. ...
- Collaboration.