Experience Over Goods: The Millennial Shift in Spending

Who are millennial buyers?

The millennial generation consists of people born from 1981 to 1996. Older millennials are primarily the children of baby boomers (born between 1946 and 1964), while younger millennials likely have Generation X parents (born between 1965 and 1979). There are around 72.7 million millennials in the U.S. population, and that number is projected to reach 78 million by the year 2030.

Millennials are purchasing powerhouses who have likely embarked on careers. Many have children, and many are married. Millennials with kids purchase items like toys, clothes, and products for education, enrichment and safety. Some have bought or want to buy a home and will likely be involved with purchases associated with homeownership. 

However, these milestones are far from uniform among millennials. Here are some commonalities among members of this generation:

• According to Statista, only 44 percent of millennials were married as of 2020, compared with 53 percent of Gen Xers, 61 percent of baby boomers, and 81 percent of the Silent Generation (children of the Great Depression born between 1928 and 1945) at a comparable age.
• Millennials tend to marry later (when they marry at all) and are more likely to live with a romantic partner without being married than previous generations.
• Millennials have children later but still have roughly the same number of children as previous generations.
• Millennial fathers are more involved in raising their children.
• Millennials are slower to become homeowners than previous generations. According to ​​Apartment List’s 2023 Millennial Homeownership report, 51.5 percent of millennials own homes. However, by age 30, only 42 percent of millennials were homeowners, compared to 48 percent of Gen Xers and 51 percent of baby boomers. 

Why do millennials prefer experiences over products? 

Millennials prefer experiences over products because most grew up with everything they needed — product ownership wasn’t a primary focus. In contrast, the baby boomer generation, one of the biggest consumer generations ever, saw product ownership as a sign of success. 

Because owning products isn’t particularly impressive to most millennials, they do not view ownership as a measure of someone’s success to the same degree. Many millennials look elsewhere for fulfillment and value experiences over things. Their lifestyle became more important than following a traditional career path and buying bigger cars and houses.

Here are a few factors driving the millennial preference for experiences: 

• Millennials don’t equate money with happiness. Many millennials grew up in households primarily motivated by money. They saw their parents spend on material goods to show off their wealth and success. They may also have noticed that conspicuous consumption didn’t necessarily equate to happiness in their parents’ generation. Studies on happiness agree: People tend to be happier after spending money on an experience compared to a product.
• Millennials eschew debt. Millennials may have seen their parents’ conspicuous consumption lead them to become chained to debt, perhaps even losing their homes. This may be why more millennials are becoming Generation Rent, determined to spend their disposable income on experiences instead of solid assets for the future. While they may carry student loan debt (as described below), they are reluctant to take on more debt than necessary.
• Social media showcases lifestyles. Social media is another factor playing into the experience boom. Millennials were the first to grow up with the internet, smartphones and social media. To generate more social media likes, users showcase their lifestyles and experiences. Vacations produce way more Instagram-worthy pics than showing off your new purse or car. Social media allows everyone to talk about their lives and learn about others’ lives, which has only been possible with this generation. Millennials want to feel connected, and they’re scared of missing out. Technology has helped drive this shift, leading to the growth of the experience economy.
• Millennials have a unique relationship with money. Millennials grew up in the shadow of 9/11 and the Great Recession. While many went to college and attained degrees, some carry a heavy burden of student debt to the tune of an average of $39,000 per borrower. This debt impacts the lifestyle they can afford, which often doesn’t include purchasing a home. Some even live with their parents to cut costs. Nevertheless, millennials can be very loyal to companies that provide more perceived value. For millennials, a big part of added value is experiences. 

How can brands turn products into experiences?

When you hear about the experience economy, you may instantly think about a day trip or adventurous vacation. But experiences don’t have to be so obvious. Products can provide experiences, and creating these experiences can help you engage with millennials.

For example, back in 2015, HP launched a special edition Star Wars notebook to coincide with the release of Star Wars: The Force Awakens. It also started the #AwakenYourForce social media marketing campaign to promote interaction, create engagement and deepen the experience. 

The secret to turning products into experiences is building community, which is something businesses didn’t prioritize in the past. Today, community creation is essential for brand success. Customers don’t just want a relationship with you; they want a relationship with other fans. This is why social media marketing is so crucial. It fosters engagement and helps build a brand community. 

Here are several ways to turn a product into a brand experience that captures the interest of millennials:

• Host exclusive events. Host events to create a memorable experience. These can be launch events or teaser events where you place your product front and center and give people a chance to interact. This approach fulfills the millennial desire to attend an event and connect with others. For example, when selling books, include speaking events for authors or provide a location for a book club to meet.
• Customize the shopping experience. Millennials want to feel like they matter and that businesses cater to them; a customized shopping experience accomplishes both. Retailers are increasingly offering shopping upselling and cross-selling suggestions and promotions based on a customer’s previous history. The best CRM software stores extensive customer information to help you customize your offers and suggestions. Many POS systems have a built-in CRM component, making customer data gathering even easier.
• Take your customers on a journey. Don’t just sell to people; go out of your way to help them. Think about what your product is designed to achieve and how it’s supposed to improve people’s lives. For instance, if you sell fitness equipment, extend your website, blog posts and social media platforms to provide exercises, tips to maximize its use, and healthy recipes.
• Crowdsource your content. Involve customers by asking them to upload videos and photos of themselves using your product. Ask them for tips and suggestions to share with other customers. This user-generated content can help you showcase the enjoyable experiences your products create. Your users can feel like a part of a community and receive recognition from others while providing you with authentic, quality content for free.
• Use video to expand your brand. Video can improve your content marketing significantly. Consider providing customers with virtual experiences through online video content. For example, show them how your product is made, include interviews with the designers and engineers, and tell them about the history of your company or product. Upload or stream videos for a more immediate experience where customers can ask questions.

Millennial marketing is the present and future

As Gen Z and future generations join millennials in buying power and influence, a desire for experiences will only increase. Find ways to frame your products and services as experiences and provide genuine value. This will help you connect with your audience, meet evolving consumer needs, and ensure customer loyalty for years to come. 

If you modify your marketing tactics and find they aren’t working, consider surveying your target audience. The survey data you gather will give you firsthand insights into what they want and need from you as the market evolves.

Skye Schooley contributed to this article.