When you look up information about millennials, you might find that there are some disagreements regarding the years in which these individuals were born. According to U.S. News, millennials (also referred to as Generation Y), were born between 1981 and 1996.5
This is an interesting generation for several reasons, one of which is the fact that they grew up with computers and the internet, unlike older generations. And when you look at the way they behave and the decisions they make—including financial decisions—you can see that they are quite different from other generations, including Generation X, which came before them.
What are some of the many fascinating facts surrounding millennial spending habits? Below are a few to help you better understand what motivates this unique generation.
- Millennials typically spend more of their money on things like food (restaurants and takeout), travel, and streaming services. On the other hand, they tend to spend less of their money on things like housing, cars, and clothes.5
- Impulse buying is common amongst millennials. When they’re shopping in stores, a whopping 81% of them are inclined to make at least one impulse buy every month. And even when they’re shopping online, 69% of millennials will make this type of purchase.2
- Millennials have a lot of spending power. On average, $47,256 is spent every year per person.9
- In 2020, the most popular brands for millennial shoppers included PlayStation, Amazon, and Target.9
- Millennials in the United States spend around $600 billion annually.3
Millennials Prefer Shopping Online
Millennials have their own preferences when it comes to shopping. And because they grew up with the internet at their fingertips, it should come as no surprise that, when it comes to buying the things they love, they turn to the World Wide Web. Plus, they use the internet for everything from researching the best items on the market to reading customer reviews before making a purchase.
- More than half of millennials (roughly 54%) do their shopping online.1 And 26% of them will even shop for their groceries on the internet.3
- Around 42% of millennials use their smartphones to make online purchases.3
- Roughly 47% of millennials do their shopping on Amazon at least once a week.4
- Some millennials (23%) prefer buying online and picking up in store.3
- A mere 9% of millennials claim to only shop in-store.3
- There is one drawback that millennials recognize when it comes to online shopping: 67% of them are concerned about the security of their financial information.3
- 44% of millennials like shopping online because of the product options and fast shipping, while 40% prefer it because they don’t have to leave the house. Additionally, 36% like being able to read customer reviews as they shop online.4
What Do Millennials Look for in Brands?
Are millennials loyal to certain brands or are they willing to frequently switch from one brand to another? You might be surprised to learn that millennials aren’t always fickle when it comes to the businesses they support. Sometimes they even buy generic brands rather than big name alternatives.
- Millennials tend to stick with a brand they love, with around 80% of them making repeat purchases to support the same business again and again.2
- Millennials do like saving money, and 66% of them would be willing to switch brands if they were able to save at least 30%.8
- More than half of millennials (around 60%) prefer buying generic brands.3
- Around 83% of millennials prefer supporting brands that match their values.9
- Because many millennials care about the planet, nearly half of them (47%) will look into the environmental impact of a brand when deciding where to shop.9
- Millennials are also known for buying from businesses that do positive things for others5 and 75% of them think that it’s important for brands to give back rather than focus solely on profits.8
- While 40% of millennial consumers are value-driven, 22% are quality-driven, and 33% are image-driven.9
What Do Millennials Spend Their Money on?
Now that we’ve established that millennials often prefer the convenience of shopping online while they support brands they admire, you might be wondering what they typically spend their hard-earned money on. Here are some interesting stats surrounding millennials’ shopping habits.
- In 2019, millennials were spending about $187 per month on groceries and $139 per month at restaurants, on average.6
- Roughly 22% of a millennial’s annual budget goes towards housing costs like utilities. And many will put aside nearly 36% of their income each month to cover their rent.6
- Millennials love to travel and experience new things. That’s why, on average, they spent around $5,700 when traveling in 2018.7
The Effects of the COVID-19 Pandemic on Millennial Spending Habits
The COVID-19 pandemic impacted people all over the world, so it isn’t shocking to learn that millennials were affected with regards to how and where they spend their money. Only time will tell if these new habits will stick or if millennials will go back to their old ways once the pandemic is over.
- Roughly 30% of millennials ended up spending even more money online since the pandemic began.9
- In May of 2020, 47% of millennials stated that they bought from Amazon once a week.9
- Around 52% of millennials now like buying their groceries on the internet instead of in stores.9
- In the first couple of months of the pandemic, millennials spent around 60% less.9
- When it comes to buying habits during the pandemic versus pre-pandemic, millennials spent around 40% more on groceries, 13% more on alcohol, 8% more on restaurants, and 3% more on health and beauty products.9
Overall, the millennial generation is one that has its own distinctive spending habits, as well as a lot of buying power. That’s why businesses would be wise to keep an eye on what these individuals are looking for in brands, products, and services when they shop for necessities and entertainment.