While the millennial generation may be in line to inherit the Earth, right now they’re having problems just making ends meet, a new survey shows. Businesses that have been eyeing the 18-34 age group as their golden ticket to ride will need to go back to the drawing board and develop a new strategy to get millennials, or Generation Y, to part with their cash.
Millennial shoppers represent the highest percentage of Americans who do not have enough money to cover their basic needs, according to a survey of 1,950 consumers conducted by WSL/Strategic Retail, a shopping behavior and retail trends research firm. Nearly 25 percent of those in this young adult market say they are not able to make ends meet — compared with 17 percent of adults ages 35-54, and only 13 percent of those age 55 and over.
The group is beginning to turn into price-conscious value shoppers, the survey found. Four out of five millennials now believe it's important to get the lowest price on most things they buy, a full 10 percentage point increase from a year ago.
Sixty percent say they are likely to choose a lower priced brand over their usual, if they can save money, and more than half (57 percent) of this demographic make a point to search online for discounts before shopping. They're also less likely to make aspirational purchases, the survey found; 63 percent are now sticking to only those brands and stores they know they can afford.
"The young adult market has always been known for being the most fashion forward, first to respond to trends and first to adopt to new retail channels," said Candace Corlett, president of WSL/Strategic Retail. "But they’re also the group that’s been hit hardest by the economic recession, which has left them struggling to find jobs and pay down student loan debt."
"This decline in millennial spending power presents a significant challenge to brands and retailers who have long considered young adults to be the 'golden ticket' to sales growth," said Wendy Liebmann, the company's CEO. "Businesses must begin rethinking their strategy to lure these shoppers to buy. At the same time, they must re-evaluate the power of this generation to support new brands and stores."
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