Markets have undergone some pretty big changes since millennials entered their prime earning years. Remote work, online shopping, and social media have all affected consumer spending habits to the point of being a detriment to certain industries while causing a boom for others.
Now marketing professionals in every sector are stuck trying to figure out how to please a generation of under-40s that has more access to goods and services than previous generations but less disposable income to actually spend on them.
Consequently, this leads to much commentary about what 20 and 30-somethings choose to or not to spend their bit of money on. We see this with all those articles about them killing the casual dining/ cable TV/ whatever industry, and it’s almost always framed as a bad thing. But in truth, some sectors are better at catering to this generation (and Gen Z) than others. Apparently, the camping, skincare, and luxury goods industries are all doing just fine.
The Family That Stays Together…
We accept that in the free market, only those who’re the most innovative and have the strongest branding and ability to navigate economic downturns can come out on top. – something the luxury industry was particularly good at throughout the pandemic. But I’ve noticed Millenials’ spending habits seem to face a little more scrutiny than others did at their age due to the particular economic concerns that prevented them from obtaining more traditional markers of adulthood like home ownership. Whenever we spend on something, topics surrounding housing, marriage, or starting a family are also brought into the conversation and often lead to many snap judgments about Millenials’ perceived irresponsibility or misaligned priorities.
A great example is when Fortune magazine recently revealed data showing that Millenials and Gen Z actually seem to have no problem spending some of their disposable income on luxury goods, but only because they save so much money by living at home with mom and dad.
As you can imagine, these findings made their way around the internet. As any Millenial-focused topic does, it got some pretty unsavory reactions from those who I feel misunderstand the motivations of younger generations.
For better or worse, Millennials are an economic force to be reckoned with
For better or worse, Millennials are an economic force to be reckoned with, and I think understanding their approach to work and life is key to understanding why they would choose to spend on things like luxury goods and leisure activities over putting as much energy into more traditional markers of success.
You Only Live Once
Many Millenials – especially those on the coasts and HCOL areas – have accepted the economic realities of their lifetime and have begun to make tradeoffs for the sake of still wanting to live fulfilled lives, even if it means becoming a permanent renter or living with their folks.
If you feel like you’ll never be able to own a home no matter how much you save, at some point, you’ll simply stop aiming to do so and divert your money and attention elsewhere. Even in places with more moderate housing prices, a handbag is still cheaper than a home.
Cultivating Cultural Capital
Never underestimate how much having the right tastes, preferences, and interests can help move you forward. For some industries like real estate, banking, and advertising, projecting an image of success is somewhat necessary to get ahead (meaning eventually making more money to be able to move out of your parent’s house) so looking the part can be a strategic move to show you mean business or that you’ve still managed to make it.
Gone are the days of waiting for a gold watch from your employer alongside a fat pension. You’ll have to figure out how to get that Rolex yourself anyway.
Home is Where the Heart (and Your Luxury Collection) Is
Low or high income, debt or no debt – I always feel like articles about adults still living at home ignore the fact that some people prefer living in households with their parents, children, and other relatives.
According to the World Economic Forum, one-quarter of U.S. adults ages 25 to 34 lived in a multigenerational family household as of 2021. And for many of those households, remaining at home isn’t only considered to be the financially smart thing to do but is encouraged and embraced, if not outright expected (depending on the culture.) Because even if it doesn’t save money on rent, it sure does on child and elder care.
I’m not writing this to encourage anyone to spend outside of their budget or at the expense of their financial well-being. I just don’t feel like these headlines ever tell the full story.
I’m in my own home now but wouldn’t feel bad about moving back in with family if my spouse or I ever needed to – there’d just be more love and Louis V to go around.