Price and Brand Important to Millennial Buying Decisions
- February 25, 2020
- By Todd Whitesel
Millennials are the largest generation in U.S. history. There are approximately 80 million Millennials in America, according to consulting firm Accenture. By 2030 they will outnumber other demographics by 22 million people. And their buying power is escalating. Accenture predicts Millennials will spend $1.4 trillion annually by 2020 and represent 30% of all U.S. retail sales.
It's a given Millennials will drive and influence today's and tomorrow's economy. Understanding how and why this generation shops will be key for businesses to thrive. As Goldman Sachs notes, “Millennials have grown up in a time of rapid change, giving them a set of priorities and expectations sharply different from previous generations.”
They have also grown up with digital technology and it influences how they shop. Millennials expect to quickly find information such as product details and reviews and price comparisons. And price is important to this generation.
Nearly 80% of Millennials are influenced by price when shopping, as reported on Forbes.com. In fact, price has the greatest influence on Millennials' purchase decisions above all other factors, including quality, brand, store and availability, according to the Entrepeneur article, 8 Shopping Habits of Millennials All Retailers Need to Know. Millennials often follow brands on social media to receive discounts and the majority will switch brands for discounts of 30% or greater.
Although this graph shows price trumps brand when Millennials choose their favorite retailers, brand still matters. In the Outdoor Industry Association report Engaging and Retaining Millennial Consumers – Attitudes Toward Activities and Brands, OAI affirms, “Throughout Millennials’ lives, brands have been presenting themselves as a means of self-expression and self-definition. For Millennials this is not a good or a bad thing - it is just a thing.”
Millennials are likely to choose an outdoor brand for what it represents and how it reflects the consumer's values and priorities. As the OAI report confirms, Participation is not a prerequisite. “Being open-minded, Millennials accept that brands can play this role and have come to define themselves in part through the products they buy.”
And they don't mind others who share their interests. OAI found that Millennials favor inclusivity over exclusivity when it comes to product purchases and outdoor activities. Brands that cross-over from exclusivity to mainstream are more likely to engage Millennials as individuals and as a group than those that don't.