Millennials have been labeled the boomerang generation for
the many unwilling to leave their parents’ home, or even more negatively, the
Peter Pan generation because they supposedly won’t grow up. But now marketers,
manufacturers and retailers are recognizing the group’s potential as something
important to their bottom line: the consumers who will drive the economy in the
decades ahead.
Since the 1960s —the baby boom generation has dominated
corporate strategies behind selling nearly everything. Still constituting
one-fourth of the nation’s population, baby boomers created an economy fueled
by credit cards and trips to shopping malls as they came of age in a time of
relative affluence.
But now young adults in their 20s are moving to surpass baby
boomers as the largest age group, changing the way everything is sold, even
breakfast drinks and mattresses. Perhaps the biggest change is that today’s
young adults are putting off major life decisions as well as the big purchases
that typically go with them. As a result, their consumer behavior is
unpredictable.
There are more 23-year-olds than any other age, according to
census data from June. There is no official age range for millennials but the
generation generally is defined as being born between the early 1980s and early
2000s. By 2020, they will account for one-third of the adult population.
At the same time, millennials are the most educated
generation in American history. Far more members of this generation are going
to college than of past generations. The largest slice is now graduating and
emerging in a postrecession landscape where the job market is still troubled
but starting to show signs of improving. Many of the new college graduates have
student debt to pay off. And wage growth for younger college graduates has
risen slowly since the recession, lagging that of all full-time workers and
making expensive purchases more difficult.
But they also have significant earning potential in the
years to come and, because of the sheer size of the group, have the ability to
reshape the economy in ways that haven’t happened since the huge baby boom
generation was hitting the job market and moving into first homes.
It’s worth remembering, of course, that baby boomers puzzled
marketers in their day as they embraced consumer crazes even though they craved
self-expression and many took part in counterculture activities. They, too,
were described like millennials: selfish, entitled and unwilling to grow up.
Even as they entered their 30s, the writer Tom Wolfe labeled the era the “Me
Decade.”
Leslie Coronel, who is entering her junior year at Amherst
College in central Massachusetts, said she was careful to shop for most
groceries at major chains where she can buy bread at a discount. Yet she often
stops at the bakery at Whole Foods for more expensive treats. She does nearly
all of her other shopping online, and when she goes to a clothing shop, she
heads straight to the sales rack. But if she finds an expensive dress or shoes
she really likes, she splurges.
Such behavior has spawned a cottage industry of consultants
who collect fees from companies clamoring to figure out what this age group
wants.
Adapting to this new group of consumers should be worth it.
While baby boomers, not surprisingly, outspend millennials by a wide margin,
millennials already represent $1.3 trillion in consumer spending, out of total
spending of nearly $11 trillion, according to a study by Moosylvania, a digital
marketing company in St. Louis. Young adults, the study found, need a lot of
reassurance but don’t like to be marketed to.
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