Millennials are planning to spend big on two categories in 2018: travel and home goods, a study by CouponFollow! has found. To grab these customers, however, retailers need to offer transparent and competitive pricing—60% of millennials say price matching is very important, as they are always out for a bargain.
According to "The Millennial Money Report Winter 2017," conducted by CouponFollow!, most of the shoppers in this demographic believe they are shopping wisely and spend less or at least the same as their peers and are looking for retailers to validate what they purchase.
So where are millennials spending their money in 2017?
Overall, 31% of millennials said they will dedicate most of their spend to products related to travel and home goods in 2018, an increase of more than 100% in both categories from 2017.
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While the biggest share of their money will go to food and drink and travel, according to the report, 14% said they will spend the most in 2018 on home goods, up from 7% in 2017. Other categories that made the response list include apparel, 8%, electronics, 7%, and health, beauty and fitness, 5%.
And millennials are very concerned with getting a fair deal on price. Sixty percent of those surveyed said it's very important or important that retailers price match, and only 13% say price matching is not important.
If you break down male versus female millennials, it's almost equal with the percentage who say price matching is important, 85% versus 88%, respectively. And the percentages remain the same for all ages between 20 and 35 and all incomes, both more and less than $50,000.
Looking at the holidays, millennials are not necessarily sold on the idea of spending on Black Friday and Cyber Monday. While 40% of those surveyed said they often participate in shopping holidays, another 34% said they rarely participate and 17% never participate.
"Millennials are hesitant to participate in shopping holidays for the same reason they’re hesitant to vote: a lack of faith in the process," Michael Parrish DuDell, chief strategy officer, CouponFollow!, told FierceRetail. "As retailers continue to drag out shopping holidays for weeks and even months, consumers, especially millennials, are beginning to view such events as more of a marketing move than a genuine opportunity to save. Meanwhile, companies like Amazon are continuing to alleviate daily consumer pain points, further decreasing the value of a time-based experience."
Brick-and-mortar is still an integral part of millennial shopping. In 2017, 45% of respondents purchased between one and five items from a shopping mall, with 10% purchasing 20 or more items. Only 16% of millennials purchased nothing from a mall.
Finally, millennials believe they are shopping savvy, as 53% believe they spend less on products than their peers and only 14% believe they spend more.
Looking to the future, 59% of millennials say they will maintain their current level of spend in 2018, while 28% believe they will decrease their spending and 13% will increase their spending.
Parrish DuDell admits that he was surprised at the level of optimism millennials feel towards their financial future.
"Our data shows that, even though 45% of the generation has $500 or less in savings, 68% of millennials believe their financial position will improve in 2018," he said.
Moving forward, Parrish DuDell says that retailer must be willing to experiment with nontraditional models, extensions and partnerships if they want to gain the loyalty of millennials.
"I want to see more brands exploring things like fluid pricing, subscription services and influencer collaboration. Retailers should be watching companies like IKEA, for instance, who have made some incredibly bold moves this year, like partnering with Sonos, collaborating with Virgil Abloh, and acquiring TaskRabbit. As shopping malls become less relevant, retailers have a tremendous opportunity to own the 360-degree shopping experience. And it's an opportunity they'd be silly not to pursue," he said.