The Next Consumer Spending Boom Is Scheduled to Arrive in 2026 Thanks to Millennials on the Road to Affluence
Is your brand ready to profit from the Boom or will it go Bust?Download Table of Contents, Introduction & Methodology
Very soon a generational shift is coming to the consumer market, as the Baby Boomers move aside and Millennials take over as the prime customers for marketers at the high-end and low-end of the market and everywhere in between. That means marketers must learn a new bag of tricks to appeal to the vastly different tastes, attitudes and perceptions of the emerging consumer generation for marketing luxury brands.
Who are the Affluent Millennials?
The affluent are at the top 20% of incomes within the U.S. consumer market. This is the top quintile. Over 40% of all consumer spending comes from these 20%. That makes them the ‘heavy-lifters’ in the economy – across all segments of the market. Their greater income means they can shop at the high-end of the market, the low-end and everywhere in between. Beginning in 2015, the Millennials will start to reach their peak earning years, but it will take ten or so years before their growing numbers in affluence brings the potential for a consumer economic boom.
Millennials on the road to affluence don’t want their parents’ or their grandparents’ luxury brands. They want their own!
It will bring challenges to brands that aren’t prepared, as well as opportunities for brands and marketers can adapt to the emerging generation of newly affluent Millennials. Unity Marketing has just published a study, Millennials on the Road to Affluence, as a map to bridging the gap with today’s core consumers and tomorrow’s affluent Millennials.
This study answers the following critical questions for marketing success as the Millennials reach their peak earning and spending years, from 35-54 years of age, in 2015-2034. Marketers will gain valuable new insights into the next huge consuming generation:
- How demographics of Millennials on the road to affluence and the current population projections by age 2012-2040 identify 2026-2029 as the peak years to tap the generation’s customer potential.
- How Millennials career aspirations and lifestyle impact their earning potential.
- How their parents’ economic status impacts Millennials’ purchasing power and spending potential.
- How Millennial’s lifestyle aspirations, such as aspirations for marriage, children & family, and the goals for their lives, such as financial security, happiness, success in career, etc, influence their future as consumers.
- What consumer lifestyle goals and aspirations are most important to Millennials and how can marketers position their brands around those aspirations?
- What achieving Millenials’ lifestyle aspirations will mean for their happiness, satisfaction, contentment and ways marketers can align their brands with those feelings and experiences?
- How Millennials view emerging consumer business models, such as the new sharing economy, plays in their lives as consumers?
- Social media and how it influences Millennials in their purchasing and shopping decisions?
- Ways that Millennials manage their finances, the role of debt as it impacts their spending power and their preferred money-management strategies, such as coupon clipping, pre-purchase research, sales shopping, etc.?
- This study does deep-dive into Millennials and their current attitudes about luxury
- What luxury means to these Millennials and where dangers lie for marketers that fail to take their prejudices and predispositions about luxury into account?
These insights into what luxury means to Millennials also will help brands align their values with the most positive attributes that Millennials associate with luxury.
A detailed analysis is included that compares Millennials on the road to affluence with GenXers who are already affluent to identify key generational differences in how they behave as consumers.
Valuable insights are delivered about how Millennials shop and buy. This is insights marketers can take action on immediately and not have to wait till this generation reaches affluence:
- What categories of spending give Millennials the most pleasure and how they view shopping — as a pleasure or a curse?
- What stores they like to shop in and whether they prefer to shop online, in-store or some other way?
Finally, this report is enhanced by an analysis of the VALS® segments that make up the Millennials on the road to affluence.
These insights reveal the most prominent VALS type found among Millennials on the road to affluence — Achievers — and how to appeal to their special consumer attitudes and predispositions to capture their future spending. In addition, the VALS analysis shows how Innovators are the prime targets for luxury marketers today, but trouble may be looming for targeting this type with more luxury offers. The VALS analysis also offers advice on ways to capture the spending power of Thinkers, luxury’s sale shoppers, and Experiencers, which represent an important segment of young Millennials. And why luxury marketers need to forget about Strivers who don’t have good potential but could waste a lot of luxury marketers’ time and attention.
This is not a study of a representative sample of Millennials. Rather, it is study of a very select, unrepresentative sample — Millennials on the road to affluence. Based upon their education and career goals — how they are set as consumers reaching their peak earning and spending years, aged 35-54 — those people most likely to become affluent can be identified. This study delves into those young people set to succeed and reach affluence, defined as having income at the top 20%.
To provide context and comparison, a sample of GenXer consumers are included in this report. The GenXers are comparable in every way with the Millennials in terms of educational background and career goals, but they have already achieved affluence. An online survey was conducted in May 2014 among n=1,186 consumers, aged 18-44 years. Those aged 18-34 years are defined as Millennials, birth years -1980-1995 and those aged 35-44 years are GenXers, born 1970-1979. In addition to age, the survey sample was further qualified by education (completed 4 or more years of college or if Millennials, enrolled in college with plans to continue to graduate school) and self-supporting (unless enrolled in college). The goal is to survey the best and the brightest of each generation who are bound for the top of the income ladder. The raw survey sample was weighted to reflect equal distribution of males and females and to represent 75% Millennials (25% 18-24 years and in college 50% 25-34 years and self-supporting, unless enrolled in advanced degree) and 25% GenXers (self-supporting with completed college education). The GenXers were included in the survey to provide a comparative context in which to view the Millennials. The average age of the Millennials surveyed was 27.2 years; GenXers 39.9 years, so for allpractical purposes the GenXers are roughly 10-12 years older.
Surveyed topics included:
- Demographics (age, income, marital status, children, ethnicity, home ownership)
- Educational attainment (if in college, type of school and educational goals used to qualify respondent)
- Career goals and aspirations
- Family of origin (educational attainment and financial status of parents)
- Marital goals (note: affluence is correlated with being married)
- Lifestyle goals and values
- Owning vs. Renting
- Social networks and use of social media
- Money management strategies & debt
- Consumer spending and categories of spending that give greatest personal enjoyment
- Shopping behavior, including online vs. in-store shopping preferences
- Role of luxury in their lifestyles
- Attitudes toward luxury
October 2014 (100 pages + Executive Summary in powerpoint)
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