It’s well known that many brands are enamored with Millennials. But they must also face the harsh realities of this generation: Millennials have below-average incomes and net worth, tend to engage more in deal-seeking behavior, are spending less than they used to on discretionary items, and have shifted more to a savings mindset. Fortunately, a recent report [pdf] from L.E.K. Consulting identifies the group of Millennials that have the most to spend.
This segment is the group of Millennials (18-34) that have kids and at least some college education. With an average age of 29 (the oldest of the Millennial consumer segments examined), 91% of these youth have household incomes above $50,000.
They’re also the highest spenders: survey respondents in this group reported spending, on an annual basis, an average of:
- $980 on electronics, 52% more than the next-highest Millennial consumer segment;
- $858 on apparel, 49% more than the next-highest segment;
- $735 on the home, 68% more than the next segment;
- $578 on footwear & accessories, 56% more than the next segment; and
- $524 on personal care, 49% more than the next segment.
As for those segments, the 5 analyzed in the report are:
- With kids and at least some college;
- Without kids and with at least some college;
- With kids but no college;
- Students; and
- No kids and no college.
Looking at those segments, Millennials with kids and college spend around 50% or more than those without kids but with some college. Previous research has also demonstrated that adults with kids in the household spend considerably more on discretionary items than those without kids.
Meanwhile, the L.E.K. Consulting study also points to a potential shift over time in youths’ spending patterns.
When Gen Xers and Boomers were asked to think back to their purchases when they were young, they reported a greater frequency of purchases in apparel and footwear & accessories than estimated by today’s youth. By contrast, today’s youth estimate making more purchases in personal care and the home than older generations remember making.
One thing working in brick-and-mortar retail’s favor? Millennials tend to award greater brand equity to store brands than do Boomers, despite their apparent greater inclination to shop online.
About the Data: The results are based on a 2016 survey of more than 3,800 Americans, including around 2,200 Millennials ages 18-34.