INSIGHTS
- It's valuable to study the financial behaviors of millennials (ages 23-37) because they have grown up with the internet and smartphones and have an affinity for technology that helps shape how they shop.
- The trend emerging from the research is that millennials and younger are most likely to be influenced by exposure to the internet and technology and therefore prioritize instant gratification.
OVERVIEW
The short version is that it's valuable to study the financial behaviors of millennials (ages 23-37) because they have grown up with the internet and smartphones and have an affinity for technology that helps shape how they shop. The trend emerging from the research is that millennials and younger are most likely to be influenced by exposure to the internet and technology and therefore prioritize instant gratification. Below you will find a deep dive of my findings.
INSTANT GRATIFICATION
In a recent World Bank article Roxanne Bauer explains that humans have the tendency to want things now rather than later. In order to delay gratification, they must be convinced that the reward in the future is going to be sufficiently large to compensate us for not having it right now.
There are three parts of the brain: basal ganglia or "reptilian brain" (oldest), limbic (next oldest), and neocortex (newest). Humans make decisions using these three parts of the brain. The older part of the brain can work against logic to influence a person's decisions. Research from Princeton University concludes that impulsive choices happen when the emotional part of our brains triumphs over the logical one. When people get really close to obtaining a reward, their emotional brain takes over.
MILLENNIALS
The millennial generation is the largest in US history and as they reach their prime working and spending years, their impact on the economy is going to be huge. Millennials have come of age during a time of technological change, globalization and economic disruption. They’re also the first generation of digital natives, and their affinity for technology helps shape how they shop. They are used to instant access to price comparisons, product information and peer reviews.
In a recent survey by Forrester and American Express, millennials (ages 23-37) were compared with Gen Z shoppers (ages 16-22). The younger shoppers were overall more likely to use digital and mobile payment platforms. The younger demographic was considerably more likely to have used card-branded wallets such as Visa Checkout and device-specific mobile payment platforms such as Apple Pay. Research by experts at the London Business School say the process of taking real monetary notes out of a purse or wallet acts as a brake on spending. By contrast, a tap and pay card does not seem like using real money, it is quick and provides instant gratification. When asked what kinds of services would be likely to win their loyalty, both the younger and older shoppers explained that they wanted speed (same-day delivery) and frictionless transactions (mobile self-checkouts.) Gen Z were considerably more interested in one-hour delivery via drone. According to a Singsaver article by Ryan Ong, instant gratification means having what you want, right now. This makes you willing to a pay a premium on speed, even when there’s no logical reason for it. Based on this research there is a clear connection between millennial consumer behaviors and instant gratification.
DATA
Goldman Sachs' Data Story about Millennials illustrates that with product information, reviews and price comparisons at their fingertips, Millennials are turning to brands that can offer maximum convenience at the lowest cost. 57% of millennials compare prices in store. 34% of millennials are turning to their online networks when making purchasing decisions. 90% of millennials in 2014 had purchased something on the internet in the past 12 months. 38% of millennials communicate via social media about a service, product, or brand. Price and quality make millennials loyal to a brand. Wellness is an area where millennials are willing to spend money on compelling brands. Millennials are not making major purchases. 60% of millenials in 2013 chose to rent instead of buy their home.
CONCLUSION
To wrap it up, due to digital and social shifts as a result of technology advances consumers are more likely to use mobile payment platforms,
to have used card branded wallets, and to want same day delivery, delivery by drone, and mobile self checkouts. Consumers prefer brands that can offer maximum convenience at the lowest cost, use online networks to make purchases, compare prices, regularly purchase online, and prioritize instant gratification. Thanks for using Wonder! Please let us know if we can help with anything else!