Millennial 'Buyer's Guide' (Part 1)
What are the CPG habits of 18- to 34-year-olds, and just how influential is this group?
Estimates of the number of millennials in the United States range as high as 86 million, approximately 7% larger than the baby boomer generation. Recent estimates by the Boston Consulting Group (BCG) have pegged millennial consumer spending at $1.3 trillion annually (21% of total consumer spending).
And given the relative size of millennials' social networks, and their propensity to engage in reviewing products and reading product reviews online, Modi said he believes that such social network interactions are having real effects on this generation's buying habits.
"We are increasingly finding that millennials' use of frequently changing technology and social media--as well as their influence on other generation--demands additional attention," he said. "As Millennials grow older and their spending power increases, how consumer staples companies interact with and appeal to this generation may have long-lasting impacts on future buying decisions and behavior."
Millennials also tend to be more aspirational in terms of consumption than prior generations and other age groups today, said the report. They prefer more expensive natural and organic foods as well as more expensive, sophisticated beverages including wine, whiskey and craft beer.
"We attribute these findings to social media where millennials are most often following wealthy celebrities and those within their own social networks who are sharing positive and successful life occasions. This in turn leaves millennials with a distorted view of the world, and the belief that the majority of their peers are very successful and celebrating, when in fact the majority are not, and simply refraining from social media postings. This distorted view in turn leads millennials to trade up beyond their means," Modi said.
The research also examines how millennial's employment, living arrangements, marital status and family status affect their buying habits and influence.
Because of the recession, more millennials live at home with their parents. "Given this high proportion of millennials living at home with presumably little in the way of income or assets, we wonder how their buying habits are influenced by shoppers in the household--or how these millennials are influencing households' shoppers," said Modi.
He added, "We believe that financial strains (in addition to changing social dynamics) have compelled millennials to delay decisions to get married and/or have children--and these decisions are also likely changing consumer habits."
Millennials make far fewer shopping trips than older generations…