Generation Freedom: How millennials are teaching us the value of experiences

For millions of people, taking snapshots of our lives through digital media has become just another part of everyday life. Billions of photos, videos, and audio recordings – all representing unique moments in time – and all captured, broken down, and stored forever in the form of 1s and 0s in the cloud.

The rise of the “experience economy”, valuing moments over physical goods and possessions, has been recognised and understood for some time. And our new research paper, the Spending Power Index, has revealed it to be one part of a much bigger picture, with millennials (defined here as the 26 – 40 age group) leading cross-generational change not just in the value of experience, but in the structure of people’s lives.

The trend can be clearly seen when looking at what British consumers – across all demographics, not just millennials – are choosing to spending their money on.

We expect lifestyle spending to grow by 3.1% in 2019, while spending on holidays will grow by a whopping 4%.

In contrast, retail spending – the amount of money Brits spend on buying goods – will grow by an average of just 1.9% in the same period. This will be the third consecutive year of easing growth in retail spending, at an average of 2.9%. Meanwhile, holiday spending will have grown at average of 3.7% per year over the same period.

Impact on retail

What this means for retail marketers is quite simple – if you want to entice shoppers, you’ll need to offer more than just stocked shelves.

In a world where you can buy the same goods online, stores are already considering what else they can offer customers beyond a better, more exciting buying environment. Many are setting up new store layouts, payment schemes, and innovative in-store customer experiences.

Some businesses are taking it further still by investing in partnerships to heighten the experiential element of a physical space, and further reduce the emphasis on traditional retail transactions.

One example of this is the partnership between WeWork and Samsung, where the tech giant’s customer care centre doubles up as a modern work facility, complete with high-speed internet and video conferencing capability. 

Demographic shift

Contrary to popular opinion, it’s not just the younger generation who are learning to value experience. The trend exists across all demographic groups.

Holiday spending is set to grow fastest among people aged between 41-45, at 4.9%. That’s compared to 4.6% for those between 26-30.

And the 71-75 and 76+ age brackets are spending the highest proportion of their incomes on holidays out of every group we studied.

This extension of the experience economy to all UK demographics is one part of the bigger picture I mentioned.

Increasingly, millennials – the freedom generation – are shunning traditional models of salaried employment and retail spending in favour of lifestyles that offer more control over their time.

Through 2018 and 2019, we predict millennial age brackets will see an average 3.6% increase in their self-employment income. Those aged between 31-35 will make £127.52 per week in self-employed income in 2019, compared to just £104.72 in 2013.

So what does this all mean for employers, marketers, and society?

It’s clear that millennials are demanding control over their lives. And they’re are prepared to fend for themselves if it isn’t being delivered by their employers.

They are obtaining increasing levels of income from their own means, like self-employment and entrepreneurialism, and becoming less reliant on monthly salaries to survive.

To engage these people successfully, employers should be looking at flexible working programs that allow staff to work in their own time, trusting that this increased level of responsibility will reap rewards from a generation that’s getting used to making its own way in the world.

And it means that brand leaders and marketers who want to target them should be very aware that they won’t be easily manipulated. Their interest in owning things – as judged by growth in their retail spending – will have slowed for three consecutive years by 2019. At the same time their spending on lifestyle and experiences will follow the broader national trend upwards.

In this age of information abundance, our perception of value is shifting from the material to the ephemeral.

Millennials are increasingly inspiring the rest of us to find the worth not in simply owning a piece of the real world for but in experiencing it and owning the memories instead.