Millennial shoppers have never taken social norms at face value. From demanding values-based retail marketing to refusing to invest in homes they can’t afford, millennials have been questioning the status quo since they came of age in the early aughts. Yet millennials’ bucking of traditions doesn’t end there. Millennials shifted the global retail marketplace by spending on experiences rather than things, debunking the idea that by foregoing their daily avocado toast they can buy a home, and, most recently, ignoring headlines about in-store traffic and opting to shop online. A whopping 73 percent of millennials plan to spend the same amount or more online this year.

So, why are Y2K-ers doubling down on online-only purchases? What’s behind this shift in purchasing behavior, how is social media contributing to it, and what comes next as forward-thinking millennials stare down the barrel of middle age? Let’s get into it.

Time is a big deal for millennial consumers. Security is too. Even when millennials are buying something special for themselves, like a luxury handbag or even a quality skin serum, they have one eye on the clock

Why the Heck are Millennials Buying Luxury Online?

One of the most fascinating factors about millennials’ online shopping boom is the categories they’re purchasing via ecommerce channels. One would expect household goods to come in first, perhaps followed by grocery delivery, then pet care… but that’s not even close to the case. More than 27 percent of millennials will increase their online spending in 2023. Health and beauty products come in first for millennial’s online spend, with luxury purchases coming in a close second.

How odd when beauty products and luxury purchases are two categories where customers really need to see and try before they buy! Millennial (63 percent) luxury purchases have outpaced luxury spend by every other generation. The International Gem Society estimates that most jewelry shops affected by the pandemic now depend on online shopping visits to stay afloat. Further, IGS reports that struggling jewelry brands are those lacking a strong ecommerce presence as well as a large social network. An online presence is critical to jewelry retailers’ bottom line.

Where Are Millennials Making Online Purchases?

So, why are millennials buying their luxury and beauty products online? To answer this question, we need to understand millennials’ daily lives, which include juggling conflicting demands like taking care of aging parents and their own young kids. Gen Y is frantically trying to save for big ticket purchases like homes while fighting for student debt forgiveness. The same financial freedoms that millennials’ predecessors took for granted –– the ability to buy a home, help finance kids’ college tuition, and save for retirement –– are things that millennials need to fight for, tooth and nail.

In addition to juggling familial and economic priorities, millennials are hyper-aware that artificial intelligence could make many of their jobs redundant. Way back in 2018, Forbes published a study suggesting that 37 percent of millennial jobs would be at risk when the AI sector grew. Flash forward to 2023: ChatGPT is a household name. Despite all of the positive press focused on how AI will soon make most jobs “more fulfilling,” nobody knows exactly how AI will affect the global landscape. If the pandemic taught us anything, it’s that nobody can fully predict the future.

So, yes, time is a big deal for millennial consumers. Security is too. Even when millennials are buying something special for themselves, like a luxury handbag or even a quality skin serum, they have one eye on the clock. It’s for this reason (not the inability to pry themselves away from social media) that many millennials plan to continue shopping online.

Two Generations’ Perceptions of CSR

A brand’s corporate social responsibility (CSR) can make or break its ability to appeal to millennial consumers. Gen X may still have more money to burn than their younger cohorts, but millennials make up the largest chunk of the global population. Millennial consumers are more likely to take sustainability action than Generation X ­­­­–– whether it’s paying significantly more for sustainably made goods, seeking out ethical brands, or buying secondhand goods.

Millennial customers are attracted to social responsibility primarily through CSR. This means that the brands they patronize need to have a strong sustainability audit on their website. Brand websites should also include how they plan to reach their CSR benchmarks, with regular updates showing their progress. Since greenwashing –– companies making themselves seem more environmentally friendly than they are to boost sales –– has become so prominent in recent years, next gen consumers are looking for cold, hard facts. A few pictures of happy, young environmentalists frolicking in the ocean and in the field won’t cut it anymore. Brands need to communicate CSR through supply chain data, not an ad blitz of stock photos.

To the Online Thrift Shop and Beyond

Millennials’ sustainability concerns make secondhand goods an incredibly popular category for this demographic. When secondhand retailers offer an app with strong convenience and dependable shipping, they’re almost unbeatable for Generation Y. Just look at luxury: The secondhand luxury market growth has long outpaced regular luxury spend, and millennials are leading the charge. While 79 percent of all millennials that made purchases in the last year shopped on Amazon, the very next company on that list was eBay –– an online marketplace/app that specializes in secondhand goods. Next on the list? Groupon, which, while not a secondhand goods retailer, offers steep enough discounts to mirror one.

Although millennials grew up in malls during their teen years, they don’t want to visit them in adulthood. This can be attributed to the fact that millennials can find better deals at thrift stores and consignment shops, online marketplaces like eBay and Groupon, and in person at off-price stores like Ross and T.J. Maxx. Put simply, mall visits are still more trouble than they’re worth. But there’s still a place for retail and department stores, provided they prioritize the omnichannel shopping experience –– which is rooted in WiFi accessibility. Retailers need to steer clear of not offering internet access that prohibit millennials from researching potential purchases — and they need to offer free WiFi at all of their locations. By giving millennials who show up for in person shopping the ability to price check and read reviews that they get from online shopping, retailers can build trust with Generation Y.

It’s important to understand that millennials’ shopping behavior doesn’t come from a place of distaste for an in-person retail experience. But they’re pressed for both time and money. Retailers that understand this reality, and cater to it, will be well positioned to gain market share from this powerful demographic.

We’re all guilty of repeating the tired clichés about millennials being forever renters and never buying their own homes as generations before them have done. Well, fuhgeddaboudit.

New research shows that not only is this generation – now the largest demographic group in the country – buying homes but more of them are now homeowners than renters. It’s a remarkable transformation for what has to be one of the most over-analyzed yet misunderstood groups on the American population landscape. And with this huge shift, it means potentially big changes for the retailers that sell products to homeowners: the Home Depots, Lowes and home improvement stores that supply new kitchens and bathrooms; the home furnishings stores that sell them furniture, rugs and lighting, and all the other businesses that have up until now written off millennials as non-customers for homeowner-related merchandise. Retailers will need to offer different products, sold in a different way with the accompanying service level they haven’t had to offer previously. Millennials area different breed of home customer. And you thought you knew who your customers were.

Millennials may want a brand and a premium product, but they want to hear the backstory of it’s worth: is it eco-friendly, sustainable, from a company promoting diversity and socially correct? They want all the details and won’t fall for empty advertising messages.

For a long time, it seemed that millennials were going to be the generation that would break with past traditions and be largely renters, giving up the American dream of home ownership. And in fact, that was the case for a long time as millennials held off buying homes until they were much older. Historically, the average age of a first homeowner has been 33, according to theZebra.com, a website for insurance information. But in 2022 that jumped to 36 years old, confirming that millennials are buying, they are just buying later in life.

Maybe it was the pandemic, but just as likely it was inevitable. Millennials are now in their “prime home-buying years,” and the pandemic, which caused many in this age group to move in with their parents, may have actually helped the home buying surge.

Over the past few years, the surge in home ownership among this group has been remarkable. New research from the online site RentCafe, which looks at the apartment market, shows what it calls a “historic shift” in the percentage of millennials owning homes. Millennials gained 10.8 million homeowners in the last decade, including 7.1 million in the last five years to reach 18.2 million in 2022. This pushed the balance in favor of homeownership to 51.5 percent of the age group. “The pandemic and the evolution of the real estate market during the last few years didn’t suppress millennials’ appetite for buying homes,” the website states. “On the contrary, most millennials are now sipping their matchas in their own homes rather than in rentals.” RentCafe adds, “With work-from-home supporting these decisions, many millennials saw this period as an opportunity to save for a down payment.”

Even with the recent surge, millennials still trail their baby boomer parents in the percentage who own homes: 80 percent of those golden oldie boomers are homeowners. About two-thirds of Gen Xers own homes and now with this new shift only Gen Z members remain predominantly renters. Even though millennials still trial their parents and older siblings in home ownership, the sheer size of the group means companies that cater to homeowners now have to get ready and rethink their strategies.

The Furnishings Future is Now

For the past decade or so retailers selling products for the home – be it furniture, appliances, kitchen cabinets or home improvement items – have focused most of their attention on older shoppers – boomers and Gen Xers. Millennials were a small portion of their business, and they targeted goods more suited for rentals to this demographic.

That’s about to change:

• Furniture: It’s not a hard and fast rule but homes are generally bigger than apartments and have more rooms. Homeowners can buy bigger sofas, bedroom items like larger mattresses and even dining room sets than they could for their rentals. They will also often spend more because they know they will be in their homes for some time as opposed to the more transient nature of apartment living.
• Lighting: Renters are notoriously big lamp buyers and would never think about buying a chandelier or what the trade calls hard-wired lighting. Now they will.
• Flooring: Even though wall-to-wall carpeting sales are in decline, it’s another item that renters would never buy but homeowners would. More likely are hard floor coverings like wood, tile, and vinyl flooring. Renters might buy a small area rug but that’s about all they thought of when it comes to what is below their feet.
• Home Improvement: Obviously, renters rarely worry about things like new windows, flooring, or HVAC (heat, ventilation, and air conditioning) systems. Now they are on their shopping lists. Same for kitchen cabinets, plumbing fixtures and home exterior products like siding, roofs, and walkways.
• Outdoor: This is another home area that usually doesn’t exist in apartments, or if does it’s often just a small terrace. Now we’re talking backyards, patios, and decks…and the corresponding outdoor dining sets, chaises, fire pits, barbecues and water features that every self-respecting new homeowner lusts after…just like their parents did.

New Opportunity

Taken together, the stores that sell all these things – DIY chains, large furniture dealers, outdoor specialty shops, flooring stores and lighting showrooms – are all in line for pick-ups in business as the percentage of homeowning among millennials continues to climb. More importantly is the change in attitude that comes with these new customers. Boomers were aspirational shoppers and responded to the brands their parents knew and trusted. Millennials, not so much. They may want a brand and a premium product, but they want to hear the backstory of its worth: is it eco-friendly, sustainable, from a company promoting diversity and socially correct? They want all the details and won’t fall for empty advertising messages.

It will be a process for these retailers to rethink their selling approach, especially after many of them figured they could keep living off the boomers forever. That generation will still be buying for a while longer but as with so many things they are being replaced by millennials. That is, until Gen Z comes along…

Geriatric millennials are turning forty, but don’t expect us to make the same big-ticket purchases as our predecessors. Millennials currently fall within the age range of 27 to 42. Many are staring down the barrel of the big Four-O. But, due to the perilous state of the economy, millennials have more to fear than our mortality.

Although millennials’ minds and bodies are of a certain age, our net worth is not. Millennials still only account for 7 percent of the nation’s total wealth. Before you start saying that everyone struggles in their 20s through 40s, note that Boomers were worth 22 percent of the nation’s wealth at the same age. It’s this systemic inequity, not a mass fault of character, that has middle-aged millennials more likely to take a new antidepressant or take up drinking in excess than to buy a new car.

As mental health awareness continues to increase, so will consumer expectations for retailers to service those concerns. Retailers can tap into our collective crisis spend by focusing on the positive mental health implications of products and experiences, whether it’s crafting items, #selfcare products, rock climbing classes, or utilitarian goods like sleeping bags and tents to facilitate camping trips.

Let’s take a look at the challenges being faced by middle-aged millennials, our collective financial and mental states, and what we’re actually buying as we embark upon our respective crises.

In Defense of Millennial’s Middle Age

Contrary to popular perception, women actually experience midlife crises more often than men. The most common age range for a midlife crisis to kick in is somewhere between are 45 and 49, followed by between 50 and 54 years old. Early onset midlife crises, however, can also happen between the ages of 35 and 44.

Many say that millennials’ midlife crisis should happen when we’re at least fifty, since we’ll live to be over a hundred. But millennials don’t see it this way. Those that don’t expect global warming to take us all out in the next 20 years cite stress-related illnesses as the reason they’ll be out of the ballgame long before hitting that centennial benchmark.

The Expendable Income Gap

Say what you will about millennials, but this generation simply didn’t have the same opportunities as the generations that came before us. Case in point? Millennials experienced two recessions before we turned forty. Once you adjust for inflation, it quickly becomes clear that our income levels don’t compare, either. Millennials that fall between the ages of 28 to 38 have a lower net-wealth-to-income ratio than any generation before us. The typical 40-year-old millennial earned $49,000 a year in 2021. This is slightly more than the inflation-adjusted $43,000 and $39,000 that Gen Xers and boomers earned at the same age.

However, when you take a look at the cost of housing, student loans, medical bills, automobiles, and so on, you’ll quickly see that we simply aren’t dealing with the same world. Business Insider reports that the cost of childcare has risen by 115%, medical care by 130%, college tuition by 178%, and housing costs by 80%. Millennials may be the perfect age to ring in our midlife crises with big-ticket purchases, but we lack the economic security to make them.

No Midlife Mobility Crisis for Millennials

Cars and Harley Davidsons and divorces, oh my! None of these traditional midlife crisis purchases will be on millennial’s shopping lists in the coming years. The reason? Cars, along with furniture, are two of the verticals that were the most hit by inflation. Most millennials are too busy saving for a home, better apartment, or furnishing their recent home purchase to start thinking “BMW convertible.” We’re more worried about paying exorbitant gas prices and trying to pack our free time with experiences significant enough to make all of the striving worth it. What you need to understand about millennials, more than anything, is that we are very, very tired.

But, don’t take my word for it: The National Bureau of Economic Research did a study last year that shows that middle-aged millennials experience many of the same mental health issues as their Gen Z counterparts: Sleeping problems, alcohol dependency, concentration difficulties, memory problems, extreme job strain, disabling headaches, suicidal feelings, and extreme depression are all on the table, with the addition of skyrocketing midlife suicide rates for extra fun.

Millennials in Crisis Are Going Back to the Basics

Millennials have long been infamous for valuing experiences over things. Despite the precarious state of our collective mental health, this experiential preference will carry over into how we shop during our existential moments. Not to brag, but out of necessity you’ll see millennials exhibit bigger picture thinking in the midst of our midlife crises. The categories we invest in will be those with positive implications for mental health. For instance: Rather than buying a new car, we’ll buy bikes.

Rather than spending our nest eggs on plastic surgery, we’ll invest in an adventurous hobby that gets us out of our comfort zones.

As mental health awareness continues to increase, so will consumer expectations for retailers to service those concerns. Retailers can tap into our collective crisis spend by focusing on the positive mental health implications of products and experiences, whether it’s crafting items, #selfcare products, rock climbing classes, or utilitarian goods like sleeping bags and tents to facilitate camping trips.

Make no mistake: millennials will burn through some of our hard-earned cash in service of midlife crises in the years to come. But, to benefit from it, retailers will need to master the fine art of selling experiences with a greater purpose. By helping millennials help ourselves in a non-condescending way, retailers can position themselves to be the ones we turn to for help when our mental s*** hits the fan.