Understanding Millennials' Influence on Purchasing Decisions
Millennials have surpassed Baby Boomers to become the nation’s largest living generation at an estimated 80 million people. And with an estimated purchasing power of $200 billion annually by 2017, and $10 trillion over their lifetimes in the U.S. alone, they have become one of the most powerful buying groups in today’s market. Not only is it crucial for brands to understand who they are, but also to understand the power they hold to influence others’ purchasing decisions. So, whom are they influencing?
- Each other. Millennials are a social generation, constantly surrounded by friends – online and offline. When it comes to making online and offline purchases, they shop in groups. A friend’s positive review wields significant power. According to Boston Consulting Group, “the vast majority of Millennials report taking action on behalf of brands and sharing brand preferences in their social groups.” And marketer Jeff Fromm states, “More than two-thirds of Millennials don’t make a major decision until they have discussed it with a few people they trust.” To solidify this even further, Fromm states, “Seventy percent of Millennials are more excited about a decision they’ve made when their friends agree with them, compared to 48 percent of non-Millennials.”
- Their parents. Surprise…Millennials get along with their parents! According to authors Joeri Van den Bergh and Mattias Behrer, 85 percent of Millennials name one of their parents, rather than a peer, as their best friend. So what exactly does this mean? Millennials have a voice when it comes to making household purchasing decisions. According to Pew Research Center, more than a third of Millennials of all ages say they influence what products their parents buy, what shops and restaurants they visit, and what trips they take.
What types of purchases are Millennials influencing at home?
- Fast food restaurants (95%)
- Out-of-home entertainment/sports/recreation (93%);
- Sit-down restaurants (88%)
- In-home entertainment and technology (50%)
- Vehicle purchase/lease (45%)
- Vacations (44%)
Consider this: If Millennials are strongly influencing each other and their parents, should we start to view both audiences as Millennials in terms of their purchasing patterns? Millennial purchasing influences are everywhere, and it’s important for all industries and brands to consider them as a potential target audience. Understanding how Millennials exert influence over others’ purchasing decisions could help you find untapped opportunities for your brand, and it is quickly becoming a crucial consideration in creating an overall marketing strategy.
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