Gen Y, also commonly known as “Millennials'', are the generation born between 1981 to 1995. Gen Y are now the largest age group in Australia. The 2021 census revealed they had caught up to Baby Boomers (born between 1946 and 1964) at 21.5% of the population.
Gen Y are a diverse demographic group. They have grown up in a connected world, with access to the internet and affordable travel.
Millennials are becoming a driving force in the economy as the older generation moves towards retirement age. A Hawarth report estimates Millennials will make up 75% of the Australian workforce by 2025. Also, an AfterPay report found they will account for one out of every three dollars spent in retail. By 2030, Millennials will make up the largest consumer demographic. Gen Y characteristics, personal values and experiences may affect how they spend their money.
In this article, we explore some Gen Y consumer behaviours and trends.
There are many unique Gen Y characteristics. Understanding these differences can help you provide a better customer experience. But it’s important not to make assumptions or stereotype consumers based solely on demographic trends. Everyone is different and unique.
Many Millennials are now going through important phases in their adult lives. This could be personal or professional changes. They may be getting married. Or starting to raise a family. They also may be moving into leadership roles in the workforce.
Today, Gen Ys might have a different experience compared to previous generations. For example, many are struggling to buy a home. As a result, they may choose to spend their money on things like travel and hobbies. This is different from Baby Boomers who might have saved for a home and other long-term investments.
It may be useful to understand how this affects Millennials’ financial habits. For example, research by AfterPay [PDF, 3.31MB] found they’re 37% less likely to own a credit card than older Australians. But almost 70% use ‘Buy Now, Pay Later’ services to help manage their spending.
Most Millennials grew up with access to the internet. This generation experienced the explosion of ‘Web 2.0’. This refers to the growth of social media platforms and online communities.
This Gen Y characteristic means they’re often comfortable using technology. The Haworth report on Australian Millennials, reiterates their use on digital platforms to connect and communicate with others as part of daily life. They expand their local social circles and connect with others across the world.
Millennials also have immediate access to information about companies and products. They are likely to use many sources to find information they can trust. These might include social media or internet searches. The Telstra Tech State of Play report shows online reviews are important. 56% of people aged 35-44 find them useful when deciding to buy from a small business.
Gen Ys may be concerned about wider issues. Such as those facing our global society. A report by Deloitte found 59% of Millennials are worried about climate change. These concerns may change the way they choose to spend their money.
McCrindle research shows almost three in four (72%) believe their purchases reflect their identity. This means they may choose to buy from companies with similar values to themselves. For example, the Australia Post eCommerce Industry Report 2024 [PDF, 4.08MB] found 82% prefer to shop from brands that share their sustainability values.
Many Gen Ys are even willing to spend extra on products that align to their beliefs. Research by McCrindle suggests that 61% will spend on ethically sound products. This is true even if the products are more expensive.
There are many ways your business can build strong relationships with Gen Ys. Read on to uncover a few strategies that can help you offer a great customer experience.
It’s helpful to know Gen Ys generally manage how they spend in different ways. They often value flexibility and convenience when making payments.
Providing different payment methods or point of sale (POS) systems, can be effective and help build loyalty. Buy Now, Pay Later options allow people to pay for goods in instalments over time. Third-party payment processors can also help. They help provide more flexible and cost-effective ways to make and receive payments. Contactless payments such as EFTPOS should also be considered. For example, using different cards and devices, including smartphones. You may also want to consider how to manage transactions on the go.
Offering clear and inclusive payment options may improve the Gen Y customer experience.
The Millennial generation enjoys technology and virtual communities. So, creating a consistent online customer experience may help attract Gen Y shoppers. The Telstra Tech State of Play report highlights the importance of connecting a business website with social media presence.
Your business may want to build a strategy that encourages customer reviews. These can help build credibility, loyalty and trust among Gen Y shoppers. Customer reviews can also help you improve the customer experience.
Furthermore, customer reviews can help build brand visibility and boost your online presence. This could result in more sales. 5WPR’s 2020 Consumer Culture Report found 93% of Gen Ys are influenced by word of mouth and 90% are swayed by online customer reviews. These ranked higher than online ads (75%) and people they followed on Facebook (67%).
Gen Ys may also like to take breaks from their technology. Research by McCrindle suggests 72% of Gen Ys struggle with too much screen time. As such, an omnichannel customer experience can help build good relationships with them. This means your business presence is consistent both online and in-store. Customers then have more options to connect with and buy from your business.
It might help to think about your business values. How do they match with what Gen Y shoppers care about? For example, using eco-friendly packaging can attract people concerned about the environment. Your business could consider supporting its local community as well.
Gen Y often appreciate when you communicate transparent company values. This can help give them confidence that they’re buying from an ethical business. Which in turn, can help develop greater customer loyalty and retention.
It can help to understand unique Gen Y traits when shopping. They typically have strong buying power. They also use their purchases to express their values and identity.
Demonstrating responsible social values may help build a strong and loyal customer base. Convenience and flexibility are also valuable to this generation. Particularly as they enter an important phase of adult life.
From introducing loyalty programs to improving your digital strategies. There are many ways to improve the customer experience for the Gen Y cohort.
Disclaimer: This article does not necessarily reflect the views of Telstra or its staff.
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