Experience Over Goods: The Millennial Shift in Spending

Business.com / Starting a Business / Last Modified: February 22, 2017

Millennials are different from other generations in a variety of ways and their shopping habits are no exception.

Millennials are taking center stage. They are now making up the majority of the workforce in both the U.S. and Canada, according to recent studies.

For businesses, this has marked a big shift. CEOs are wondering why sales are down and why they are still relying on the older generations to meet their financial targets.

Attracting Millennial buyers is the next great challenge of companies today.

And that’s because Millennials are prioritizing the experience over what they are actually getting. A lot of older people simply can’t grasp this concept.

And since most CEOs tend not to be Millennials, this has created a huge gap in opinion and understanding.

Related Article: How Companies Are Changing Their Culture to Attract (And Retain) Millennials

Why Has This Shift Happened?

It’s first important to understand why this has happened in the first place. The Baby Boomer generation, which was one of the biggest consumer generations ever, were marked by their ownership of anything and everything. It was a sign of success.

Today, owning a product is easy. Even the poorest person can own a cell phone if they really want to. Owning something means nothing. It’s possible to say that it’s become something that’s expected of people. And so Millennials are looking elsewhere.

For them, experience is worth more. It’s why more and more millennials are maximizing productivity by working from home. Their lifestyle is more important than the concept of following a traditional career simply to buy a bigger car or house.

And the difference is significant. According to one study, 52 percent of consumers from the Millennial generation are spending money on experience-related purchases. And what do they want from this, you ask?

They are looking for experiences that provide them with a lasting impression. They want the chance to connect with new people, according to 72 percent of millennials spending money on experience-related purchases.

Growing Up in a Different World

Millennials grew up in households that were primarily motivated by money. They saw their parents spend on material goods in order to show off their wealth and success. It often led to them becoming chained to debt, and in some cases they even lost their homes because they were so tied up in mortgages.

It left a negative effect on Millennials. It’s why more and more Millennials are becoming Generation Rent, where they are determined to spend their disposable income on experiences instead of solid assets for the future.

And there’s also the fact that the world today is radically different. Mortgages require huge deposits, which the vast majority of young people can’t find. Student loans are higher than ever before, making it impossible for Millennials to save.

Related Article:How to Lose a Millennial in 10 Days

The Experience Economy is Growing

Social media is also responsible for a shift in how Millennials are spending. The fact is everyone can talk about their lives and find out about the lives of others, which has only been possible with this generation. Millennials want to feel like they are connected. They are also scared of missing out.

Technology has helped to drive this shift and it has led to the growth of the experience economy.

So How Can Brands Turn Ordinary Products Into Experiences?

Think about the experience economy and you instantly think about a day trip or some sort of adventure vacation. But this is only the basic idea of the experience economy. These days’ products can provide experiences. Creating this experience is dependent on how brands communicate and engage with millennials.

For example, HP launched a special edition Star Wars notebook to coincide with the latest addition to the franchise. They also started the #AwakenYourForce social media campaign in order to get people to interact with each other.

By doing this, it’s creating engagement and the experience is there. It may only be an experience that’s happening from the comfort of your own home, but it is there.

The answer is in building a community.

For businesses, this is something that they have never had to do before. Creating a community has never been the priority for most niches. Today, it’s essential. Customers don’t just want a relationship with you they want a relationship with other fans. It’s why social media is quickly becoming a core of all marketing campaigns.

So how else can you turn a product into a brand?

  • Host Exclusive Events: You can easily host events. These can be launch events or teaser events. You are placing your product front and center, while giving people the chance to interact. That fulfills the desire to attend an event and to connect with others.
  • Customize the Shopping Experience: Millennials want to feel like they matter and that businesses are catering to them. The answer is in the customized shopping experience. Retailers are increasingly offering shopping based on the customer’s previous history.
  • Take Your Customers on a Journey: Don’t just sell to people, go out of your way to help them. Think about what your product is designed to achieve and how it’s supposed to turn the lives of people around. Extend your website and social media channels to provide exercises, tips, and inspiration.

Conclusion: This Is the Future

Do remember that this is most certainly the future. There’s no indication that this is going to change anytime soon. As Millennials invest in experiences, so will the next generation. Society is changing, and you have to adapt to that.

Related Article: Steps to Success: 9 Important Life Rules Millennials Should Follow

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