Millennial women are a force to be reckoned with, and this influence is reflected in their buying power. A new joint report from marketing agency Merkle and career development platform Levo has identified the main ways young women spend their money, and what drives them to make these purchases. This data is not only important to large corporations, but it should also be necessary for young women. Understanding how one’s money habits compare with their peers can help them better manage their money over time, and knowing what companies look for in consumers can lead to more informed purchases as well.
In recent years, the estimated household income of millennial women has generally exceeded the average salary of the U.S. population. This shift has dramatically affected all other measurements of spending power and market representation. In 2018 alone, millennial women represented a market of 170 billion dollars. Additionally, they served a total of 85% of the U.S. economy’s spending power. Talk about girl power!
Millennial women are not just excelling in spending money; they’re becoming more responsible with their money too. The percentage of millennial women who hold a credit card is nearly 7% higher than the average of the total U.S. population. Some older millennials were working professionals during the Great Recession, causing them to adopt more frugal spending habits. Eventually, this would pay off, leading millennial women to make well-informed and beneficial purchases.
While these numbers and the spending they represent may seem excessive, millennial women are increasingly conscious of how they spend their money. The study states that most millennial women’s “big purchases” are on experiences, not material ones. Seventy-two percent of those surveyed said that purchasing lessons makes them the happiest. Millennial women are more interested in a brand’s personality and how they feel interacting with that brand than just the services the brand provides.
Furthermore, 57% of young women stated that a brand’s stance on ethical and political issues affected their purchase decision. The brands that millennial women favor are achieving this through transparency and storytelling; young women want to see themselves reflected in the companies they support. Many of these interactions are based on social media, which is also a vital tool in influencing millennial women to spend in certain ways. Sixty-two percent of millennial women admitted to trying a brand’s product just because an influencer recommended it.
Overall, the report describes millennial women as “price-conscious and purpose-driven customers.” Millennial women are eager to wield their new-found spending power but are doing so carefully. Gone are the days of spending excessively and blindly; young women are voicing their needs and supporting brands that support them in return. It’s essential for companies to embrace these trends as the buying power of this group continues to grow. Millennial women are ready and willing to place their money where the experience is.