Much is written about the millennial generation these days. While members of alternative generations might not see what all the fuss is about, you should most definitely pay attention if you are an investor looking for opportunity. You see, millennials are not like other generations; and millennials – by virtue of their age – are set to become increasingly important in understanding trends in consumption.
As noted by President Obama’s Council of Economic Advisers in 2014, millennials are now the largest and most ethnically diverse generation in the US population. More millennials have a college degree than any other generation of young adults; and yet millennials value community, family and creativity in their work more than previous generations. Millennials tend to get married later than previous generations; and, believe it or not, are less likely to own a home than young adults in previous generations.
We hinted at the importance of millennials in our recent note on Snapchat. As we articulated, millennials represent around 27% of the US population (which makes them the largest generation); and their spending power is set to increase significantly over the next two decades.
Some of the starkest differences between millennials and other generations is how technology and related services are consumed. Remember, for many millennials, they were not alive in a time during which the internet did not exist.
Take daily listening of streamed audio content, for example. While most over the age of 55 years old tend to listen to AM/FM radio – as they always have; millennials tend to stream content online. (And Generation Z, those born after the millennials, even more so).
Or take daily fantasy sports betting, one of the fastest growing and most popular forms of sports betting today. The demographics of daily fantasy players in the US are nearly two-thirds millennials. This generation is literally driving a booming new gambling segment.
Finally, back to Snapchat again. By capturing the eyeballs of the millennial generation, Snapchat has successfully pitched itself as the best channel through which marketers can target young people. While 70% of those Americans aged between 18-24 years old use Snapchat, just 20% of millennials have ever eaten a Big Mac, according to Bloomberg. Think about that.
Percentage of Americans with Smartphones that use Snapchat
Millennials are different. And their behaviours are driving the consumption trends of the coming decades. Investors need to pay attention.