In a word, no. Or let me modify that, I don’t think so. Millennials, like everyone, are feeling the pinch of a shrinking economy and collapsing financial markets. Yet there are indications Millennials may not be pulling back to the same degree as everyone else. Individually, none of these indications would be definitive. Together, they suggest Millennials will keep spending:
Our focus group research last week suggests they are still interested in imported beer.
An Ad Age-commissioned survey shows younger coffee drinkers are the least likely to report they are cutting back on expensive lattes. “Those who have scaled back the most since the beginning of the year…are consumers 45 to 54, with fully half (50.4%) saying they have “cut back a lot” on fancy or expensive takeout coffee. That was followed by consumers 35 to 44 (37.5%) and 25 to 34 (33.3%).”
This week BIGresearch predicted Millennial-favorite retailers Aeropostale, Hot Topic and Buckle “are almost certain to see an increase” in sales in 2009, based on indications from their survey panel. (Wal-mart and Fred’s were the only other retailers in this category.)
What’s going on? My guess is that Millennials are already accustomed to thinking of themselves as cash strapped, so the crisis is unlikely to bring any real change in behavior. Every college student I know is convinced he is ‘poor’. Recent grads feel burdened by (very real) college debt and young marrieds/parents are chronically short of cash. This is good news for Millennial marketers who have long understood that ‘luxury’ is not a word designed to appeal to the Millennial Mindset®. Millennials always think of themselves as ‘value’ shoppers, even as they opt for expensive brand-name apparel and electronics. Apple will continue to thrive, despite the fact that a $649 Dell provides the same functionality as a MacBook at twice the price.
Judy Hopelain, describes in her blog, Retail Hits and Misses, her experience shopping for a formal dress with her 16-year old daughter. I think it perfectly captures the Millennial Mindset®, spend carefully, but spend!
There were deals to be had. We started out at Bloomingdale’s and after trying on a dozen or so dresses, found one by French Connection she loved but was a size too small, and had them hold 3 others while we went to look elsewhere. She was concerned that someone else would show up in the BCBG dress she put on hold. A group of 15 girls all agreed to post pictures of their dresses on Facebook to prevent duplicates (GREAT IDEA!), but the whole school is not part of the plan, so she couldn’t be sure. BCBG seems to be the favorite of high school juniors and seniors, and apparently two girls wore the same BCBG dress last year. The horror!
So, we worked our way through the mall. The favorite dress on hold at Bloomies was on sale at the BCBG boutique for 30% off – and the store was filled with girls from our high school. So, despite the discount, which put the dress closer to the price I had in mind, the dress was off the list. The whole brand was out. We ended up finding a totally unique dress in a London boutique called Reiss – no way would anyone else have that dress. It was marked down 75%, which put the dress comfortably in our price range. So, we bought it, and a great looking pair of sandals to go with. Later, at home she went online and found her size in one of the dresses she’d tried on at Bloomingdale’s that was a size too small at LolaBoutique.com. What to do? Like lots of people, we are cutting back and watching our spending.
She came up with the plan – return the sandals since she realized she already had shoes to go with either dress. Return the dress to Reiss. And since the dress online was still slightly over the price I had in mind, have her pay the difference. Oh, and let her run around and handle the returns herself.
