The Millennial cohort is comprised of 80 to 90 million consumers. This large group of customers is experiencing a wage gap between those who obtained a job during the recession and those who obtained a job before the recession. This gap in wages can last 20 years after graduation. A Consumer Expenditure Survey stated that U.S. consumers 25 years or younger earn lower incomes, are not likely to be a homeowner or car owner, and spend less on gifts, food, health care, and retirement plans. Furthermore, PNC Financial Services claims that Millennials incur an average debt of $45,000.
According to Forbes, the lack of Millennial buying power has made retailers hesitant to continue to target Millennials. Recently, companies like Gap and Urban Outfitters have started rethinking their Millennial target market since they have less expendable income. Mass retailers should note that 37% of Millennials say they distrust big business and buy based on “finding a deal” instead of participating in a social event. Also, 40% of Millennials prefer buying local even if the cost is higher than a mass retailer. In conclusion, retailers who wish to continue to target Millennials should focus on deals and promote their local products.
