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Millennials’ Buying Behavior: Experiences Over Goods
Millennials have unique spending habits. Learn how they differ from other buyer demographics and how to modify your offerings to appeal to them.
Table of Contents
Millennials represent a generation whose economic influence extends far beyond purchasing volume — they’re reshaping entire industries and forcing brands to fundamentally reconsider their value propositions. Their unique financial realities, shaped by events like the 2008 recession, student debt crisis and gig economy growth, have created distinct spending patterns that prioritize experiences, sustainability and authenticity over traditional status symbols. Companies that fail to understand these preferences risk losing relevance in an increasingly millennial-driven marketplace. Such a generational shift in consumer behavior represents both an unprecedented opportunity and a strategic imperative for modern businesses. This demographic’s spending power makes them an essential target for companies seeking sustainable growth.
Successfully engaging millennials requires abandoning conventional marketing playbooks in favor of strategies that acknowledge their digital-first mindset and values-driven purchasing decisions. Unlike previous generations who responded to aspirational advertising, brand loyalty campaigns and traditional sales processes, millennials demand transparency, social responsibility and personalized experiences that align with their individual identities and beliefs. Their spending habits reflect a generation that came of age during economic uncertainty, leading to careful consideration of purchases while simultaneously driving growth in experience-based sectors like travel, dining and entertainment. Understanding these behavioral patterns and underlying motivations is crucial for brands seeking to capture millennial attention and build lasting customer relationships. Below, we examine these spending habits and provide actionable insights for targeting this influential demographic through effective marketing strategies.
Millennial spending priorities
Millennials approach spending with distinct priorities that set them apart from previous generations. Understanding these core spending patterns is crucial for businesses looking to connect with this demographic.
1. Experiences over goods
Millennials consistently prioritize experiences over material possessions. This represents a departure from the product-focused spending of baby boomers, who viewed ownership as a status symbol. For millennials, experiences provide greater perceived value and personal fulfillment than accumulating goods.
“Millennials have grown up through a mix of financial uncertainty and digital transformation, which has shaped how and why they spend. They tend to put value on what something means to them, not just what it costs,” said Charlie Casey, CEO of the customer loyalty and engagement platform LoyaltyLion. “That’s why experiences rank highly. Rather than accumulating more possessions, they look for moments and memories, whether that’s travel, events or exclusive brand experiences.”
This shift towards experiences is supported by compelling data: Deloitte’s 2025 Gen Z and millennial survey found that work-life balance remains the top consideration when these generations choose employers, reflecting their prioritization of experiential value over traditional material success markers like compensation.
Several factors drive this experiences-over-goods preference:
- Money doesn’t equal happiness: Many millennials witnessed their parents’ focus on material wealth without corresponding happiness gains. Research on happiness from Georgetown University suggests that when consumers must choose between purely material or experiential purchases, experiential purchases tend to provide a happiness advantage.
- Social media influence: As the first generation to grow up with social media, millennials understand that experiences generate more engaging content — more “likes” and shares — than material possessions. Experiences like vacations produce way more Instagram-worthy photos than showing off your new purse or car.
- Unique relationship with money: Having grown up during 9/11 and the Great Recession, millennials developed a cautious approach to material accumulation. McKinsey’s 2025 U.S. consumer research reveals millennials are more likely to change spending habits in response to economic uncertainty than older generations.
2. Sustainability
Millennials demonstrate a strong commitment to sustainable purchasing practices. This environmental consciousness stems from growing up during heightened awareness of climate change, witnessing environmental disasters and inheriting concerns about the planet’s future. Unlike previous generations, who often viewed sustainability as a luxury or afterthought, millennials consider environmental factors in their purchasing decisions and are usually willing to pay premium prices for eco-friendly alternatives.
This sustainability mindset influences various aspects of millennials’ buying behavior:
- Product selection: Millennials actively seek brands with strong environmental commitments and are willing to switch to competitors offering more sustainable alternatives.
- Brand loyalty: Companies that demonstrate genuine environmental responsibility earn stronger millennial customer loyalty. “Millennials are drawn to companies that demonstrate purpose beyond profit,” Casey said.
- Value alignment: Millennials’ purchasing decisions increasingly reflect personal values about environmental protection and social responsibility. “They’re more likely to choose brands that reflect their values,” said Casey.
3. Digital-first shopping
Millennials have embraced online shopping at unprecedented rates. As digital natives, they expect seamless online experiences and use technology throughout their purchasing journey. Having grown up alongside the evolution of e-commerce, from early online retailers to mobile apps and social commerce, millennials view digital shopping not as an alternative to traditional retail but as the primary way to research, compare and purchase products. Their comfort with technology extends to embracing new shopping innovations quickly, often serving as early adopters who influence broader market trends.
Key digital shopping behaviors include:
- Advanced technology adoption: Millennials readily embrace emerging shopping technologies like augmented reality try-ons, voice commerce, AI-powered recommendations and mobile payment systems.
- Social media integration: Many use social platforms not just for discovery but for actual purchasing decisions. Eight in 10 retail executives anticipate increased social commerce in 2025, according to Deloitte’s U.S. Retail Industry Outlook.
- Buy Now, Pay Later (BNPL) adoption: According to Statista’s Consumer Insights survey, 56 percent of millennials use Buy Now, Pay Later services, leveraging these integrated digital payment solutions to make immediate online purchases while managing cash flow.
- Omnichannel experiences: Millennials demand integrated shopping experiences where they can research online, check inventory via mobile apps, purchase through social media, and pick up or return items in-store without friction between channels.
Millennial financial realities
Despite their significant spending power, millennials face unique financial challenges that shape their purchasing decisions and overall economic behavior. Understanding these financial constraints is essential for businesses and marketers to develop realistic pricing strategies and messaging that resonate with millennial consumers’ actual economic situations.
1. Debt
Millennials carry substantial debt burdens that significantly impact their spending patterns, with the most prominent form being student loan debt. According to the Education Data Initiative, millennials hold the largest share of U.S. student loan debt — about 40 percent — with an average balance per borrower of $40,438.
This debt reality creates several impacts:
- Limited purchasing flexibility for major purchases like homes
- Increased selectivity about discretionary spending
- Reluctance to take on additional debt beyond existing obligations
- Delayed achievement of traditional milestones like homeownership and family planning
Millennials may have seen their parents’ conspicuous consumption lead them to become chained to debt, perhaps even losing their homes. This is one reason why more millennials are becoming Generation Rent, determined to spend their disposable income on experiences instead of buying assets like houses.
2. Budgeting
Despite financial challenges, millennials demonstrate sophisticated financial planning practices. They’ve developed strong budgeting habits partly due to necessity, having experienced economic uncertainty during formative years.
“Many millennials plan thoroughly, balancing long-term savings with selective splurges,” Holly Andrews, managing director at KIS Finance, told us. “They’ve learned from previous generations to avoid overextending and focus on stability, but they filter those lessons through a digital-first, flexible mindset.”
Budgeting behaviors that reflect millennials’ practical approach include:
- Active expense tracking and monthly budget creation
- Emergency fund prioritization despite tight budgets
- Strategic approach to discretionary spending
- Focus on value-based purchasing decisions
However, budgeting stress remains significant, with many millennials reporting in Deloitte’s survey that they don’t feel financially stable despite their planning efforts.
3. Investing
Millennials show a strong interest in investing despite financial constraints. They represent a growing portion of new investors entering various markets, from traditional stocks to alternative investments.
Investment approaches include:
- Interest in both traditional and alternative investment options
- Growing participation in retirement planning
- Values-based investing, particularly in sustainable and ESG funds
- Use of technology platforms for investment research and management
4. Emotional stress
Financial stress significantly impacts millennial mental health and decision-making. Healthcare costs, debt management and economic uncertainty create ongoing anxiety that influences spending behavior.
This emotional stress is seen in:
- Healthcare and medical expenses as primary financial concerns
- Anxiety about long-term financial security
- Impacts on mental health and overall well-being
- Motivation to take positive financial actions when stressed
Despite these challenges, millennials demonstrate resilience through proactive financial management and healthy stress-response behaviors.
“Emotional financial stress sometimes triggers impulsive spending on experiences, but these moments get balanced out by conscious budgeting,” Andrews said. “Every purchase gets weighed against potential impact on lifestyle and future goals.”
Generational comparison
Understanding how millennials’ spending habits compare to other generations provides crucial context for targeting marketing strategies. See a generational comparison with Gen Z and baby boomers in the chart below:
Factor | Millennials | Gen Z | Baby Boomers |
|---|---|---|---|
Shopping preferences | Heavily favor online shopping and digital experiences | Mobile-first approach, social commerce-focused | Prefer traditional retail channels and in-person service |
Sustainability priorities | Strong commitment to environmental and social responsibility | Even more environmentally conscious | Growing interest, but less central to purchasing decisions |
Social media influence | Use for research and community building around brands | Heavily influenced by social media trends | Limited social media impact on purchasing |
Financial approach | Value-conscious due to debt and economic uncertainty, with selective splurging | Cautious spenders, more likely to purchase secondhand items | More traditional spending patterns, less likely to change habits during uncertainty |
Technology adoption | Digital natives comfortable with traditional e-commerce platforms | Mobile-native, expect seamless digital integration | Selective technology adoption, prefer familiar platforms |
Experience economy | Prioritize experiences over goods | Experience-focused and trend-driven | Prefer material success markers |
Payment methods | Use Buy Now, Pay Later services for flexible purchasing | High adoption of alternative payment methods and digital wallets | Favor traditional payment methods |
Millennial marketing strategies for businesses
Businesses must adapt their marketing approaches to align with millennial values and behaviors to connect with this demographic successfully. Here are effective strategies that take into account both their buying habits and their financial realities.
Build experiential value around products.
The key to engaging millennials isn’t necessarily creating experiences instead of products, but rather transforming products into experiential offerings. This approach recognizes that products can provide experiences, and creating these experiences helps engage millennials.
Effective experiential strategies include:
- Hosting exclusive events: Create memorable experiences by hosting launch events or community gatherings where your product takes center stage. This fulfills the millennial desire to attend events and connect with others. For example, bookstores can host author speaking events or provide spaces for book clubs.
- Customizing the shopping experience: Millennials want to feel like they matter and that businesses cater to them. Use high-quality CRM software to store customer information and provide personalized recommendations based on purchase history. Many leading POS systems have built-in CRM components for easier customer data management.
- Taking customers on a journey: Don’t just sell products; help customers achieve their goals. For example, if you sell fitness equipment, extend your brand through engaging website content, blog posts and social media initiatives that provide exercises, usage tips and healthy recipes.
Leverage community building and social media.
A sense of community is essential for brand success with millennials. These consumers don’t just want a relationship with brands; they want relationships with other customers and fans. This is why social media marketing is crucial — it fosters engagement and helps build a brand community.
Community-building tactics include:
- Crowdsourcing content: Encourage customers to upload videos and photos of themselves using your products. This user-generated content showcases enjoyable experiences while providing authentic content and helping customers feel part of a community.
- Using video strategically: Video can significantly improve your content marketing. Show how products are made, include designer interviews and open up about your company’s journey to create virtual experiences via video. Taking customers behind the scenes strengthens their connection to your brand.
- Integrating live shopping: With the increasing popularity of live shopping events on TikTok and Instagram, businesses should consider incorporating real-time shopping experiences into their social media strategy. This eventizes the buying process and invites customers to make their purchases together in real time.
Emphasize sustainability and values alignment.
Given millennials’ strong commitment to sustainability, businesses should prominently feature environmental and social responsibility initiatives. “Sustainability and social responsibility must be visible in messaging and actions, not just token gestures,” said Andrews.
Sustainability marketing should:
- Highlight genuine environmental benefits and certifications: Use specific, third-party verified claims rather than vague “eco-friendly” language, and showcase tangible metrics like carbon footprint reduction or waste elimination. Transparency builds trust with millennials who are skeptical of greenwashing and can easily research company claims.
- Demonstrate long-term commitment to sustainable practices: Share concrete timelines for environmental goals, progress reports on existing initiatives and evidence of sustainability integration throughout the business. Millennials value brands that view sustainability as an ongoing journey rather than a marketing campaign.
- Connect sustainability efforts to the customer’s personal values: Frame environmental benefits in terms of the positive impact customers can make through their purchases, emphasizing how individual buying decisions contribute to larger environmental goals. This approach transforms transactions into meaningful acts of personal expression and social responsibility.
Optimize for digital-first engagement.
With millennials heavily favoring online shopping, businesses must prioritize digital consumer experiences.
“Digital convenience shapes everything they do,” said Andrews. “That change has reached its peak after COVID-19, so mobile-friendly platforms, quick checkouts and visible reviews aren’t nice-to-haves anymore but baseline expectations.”
Digital optimization includes:
- AI-powered personalization: Implement recommendation engines that learn from browsing history, purchase patterns and preferences to deliver tailored product suggestions and content. Millennials expect brands to understand their individual needs and provide relevant experiences that save time and reduce decision fatigue.
- Chatbot integration: Deploy intelligent chatbots that can handle common inquiries, provide product recommendations and offer immediate support across multiple channels. These tools should seamlessly escalate to human representatives when needed, ensuring customers receive instant assistance without sacrificing service quality.
- Buy Now, Pay Later options: Integrate popular BNPL services like Klarna, Afterpay or Affirm to provide flexible payment alternatives that align with millennial cash flow preferences. Clear communication about payment terms and no hidden fees build trust and reduce checkout abandonment.
- Social commerce capabilities: Enable direct purchasing through social media platforms like Instagram Shopping, Facebook Marketplace and TikTok Shop, allowing millennials to buy products without leaving their preferred social environments. Include user-generated content and social proof to leverage peer influence in purchase decisions.
>> Learn More: How to Market to Millennials Using Instagram
Emerging trends in millennial buying habits
Given that millennials make up a sizeable portion of the population, understanding their buying habits and financial realities is crucial for business success. To earn their dollars, companies need a firm grasp on where things stand for these consumers and where they’re headed.
Emerging trends shaping the future include:
- Technology-driven personalization: As AI-powered capabilities rapidly advance, businesses must prepare for more sophisticated personalization strategies. Millennials increasingly expect customized experiences across all touchpoints.
- Social commerce expansion: The rise of TikTok Shop transactions demonstrates the rapid growth of social commerce. Businesses must adapt to meet millennials where they spend their time online.
- Flexible payment adoption: Millennials’ widespread adoption of Buy Now, Pay Later services indicates a fundamental shift in payment preferences that businesses must accommodate.
- Sustainable investment growth: The trend toward sustainable purchasing is extending beyond products to investments. This represents a fundamental shift in how younger generations view the relationship between values and financial decisions.
Despite significant debt burdens and financial stress, millennials demonstrate sophisticated budgeting practices and selective splurging habits. This suggests that businesses should avoid underestimating millennial financial acumen while recognizing their value-conscious approach to spending.
As Gen Z and future generations join millennials in buying power and influence, the desire for experiences will only increase. Businesses must find ways to frame products and services as experiences while providing genuine value. This approach will help connect with audiences, meet evolving consumer needs and ensure customer loyalty for years to come.
>> Read Next: How to Build a Brand That Attracts Gen Z and Millennial Customers
FAQs
Skye Schooley contributed to this article.
