A new study, conducted by FutureCast, sets out to dispel the myths about Millennials and finds that affluent Millennials are some of the most powerful, influential consumers. They are the people who can influence others and the way the general market interacts with brands and consumer products and are setting trends among the Millennial population overall.
The “Money Matters: How Affluent Millennials Are Living the Millennial Dream” study was conducted in May and paints a robust, data-driven picture of the 6.2 million affluent Millennial households in the U.S.
The affluent Millennials are from ages 18 to 34 and are making an annual income of $100,000 or more. According to Unity Marketing, this group will take over as the largest generational segment in the luxury consumer market around 2018 to 2020, the study noted.
“As the cohort of young adults with the means to act on the shopping attitudes and preferences of the general Millennial population, affluent Millennials have the largest amount of influence today,” said Jeff Fromm, president of FutureCast and co-author of “Marketing to Millennials: Reach the Largest and Most Influential Generation of Consumers Ever,” and “Millennials With Kids” (August 2015). The study set out to dispel the myths that Millennials are narcissistic, lazy, poor and live at home with their parents, according to Fromm.
Among the highlights of the study:
* Females dominate affluent Millennials. Today, 64 percent of affluent Millennials are female, a shift from previous generations of affluence. This may be attributed to the gender wage gap which has started to decrease among Millennials. According to Pew Research Center, today’s young women are the first in modern history to begin their careers at near parity with men. Among female workers in 2012, hourly earnings were 93 percent of what their male counterparts were making, the study said. In addition, females are also graduating from universities at higher rates than men in the U.S.
* Education may look different for affluent Millennials than previous generations of affluence. The data showed that 44 percent of affluent Millennials did not graduate from college and few have attended graduate school. This may indicate a strong sense of entrepreneurship among affluent Millennials, as well as the fact that many of them are under 22 and are still in college, said Fromm.
* Affluent Millennials are social activators. The data found that 59 percent of affluent Millennials are likely to participate in online ratings and review sites compared to 47 percent for non-affluent Millennials. More than one-third of affluent Millennials regularly post on brand and product sites, compared with 26 percent of non-affluent Millennials.
* They are trendsetters among the general Millennial population. Aspirational trends such as buying organic food are a reality for affluent Millennials, compared to nonaffluent Millennials. “They’re day traders. They trade up for experiences and quality and they trade down when they’re more income-challenged,” said Fromm.
* Affluent Millennials influence the luxury market. One-third of U.S. adults making more than $500,000 annually are now Millennials so they have the money to support new market trends they are influencing. This group of adults has significant impact on luxury, financial services and travel brands, the study found. Unlike nonaffluent Millennials, who are delaying marriage, affluent Millennials do not have the fear of cost holding them back. This is significant for brands in the bridal and luxury industries that have the potential to connect with this generation in transition.
* Affluent Millennials are at a second-phase turning point in their lives where new buying patterns are being developed. Compared to nonaffluent Millennials, affluent Millennials over-index when it comes to changing jobs, buying a home and making home improvements in the past 12 months. The data found that affluent Millennials are rejecting traditional means of home ownership and they over-index compared with nonaffluent Millennials when it comes to expecting a child in the next 12 months. In addition, affluent Millennials are savvy shoppers. For nonaffluent Millennials, purchase decisions are highly dependent on cost, while affluent Millennials are more invested in quality. According to the study, affluent Millennials are more likely to pick a different destination every time they travel instead of returning to the same place twice.
“When brands understand how these affluent prosumers (a consumer co-creator who can influence others) work and how they can work with them and take action, these brands will succeed,” said Fromm.
Among the brands who get it right with affluent Millennials? American Express, Uber, Bose Sound System, Venmo, BirchBox and Revolve Clothing, as well as JetBlue, Hilton, Fidelity, Audi, The North Face and Trader Joe’s.