The generation that went through the Great
Depression never lost their habit of pinching pennies and
living frugally. The Baby Boomers, brought up in a time of
plenty, have been enthusiastic consumers their whole lives.
The question now is whether the Millennials, who have
learned the lessons of the Great Recession, will keep their
current penchant for frugality or return to the consumerism
of their parents.
It’s not just a philosophical question –it is a matter of
survival for many industries that rely on consumer
spending. As we have reported, restaurateurs have
been concerned about the trend for Millennials to
eat out less than previous generations at their age.
And carmakers are very worried about the penchant
for those younger consumers to purchase fewer
and less expensive–and therefore less profitable-
– models.These are children of
the Great Recession, and in many ways their spending
patterns are just like the children of the Great Depression.
A core is there for both groups. It is an alignment of values
in that both look for value in a purchase. They are buying
16% fewer cars and houses.
They are putting off deciding to get a driver’s license.
If they don’t need a car, they don’t buy one. It is a more
thrifty generation than we’ve seen in a while.
Where Millennials differ from their Great Depression surviving
grandparents is their use of digital devices to find
the best values and lowest prices. And because of that,
they can be reached through those channels by retailers
and others who know their preference for price transparency
and product information. Millennials
are price and payment-sensitive, but is
not sure that those behaviors will stay
with the generation as the economy
recovers. The habits of youth are likely to stick, just as
they did for the “Greatest Generation”
and the Baby Boomers.