A new report from CB Insights identifies 12 industries that will boom because of millennial spending, and how some of them will make this happen thanks to the prevalence of technology-faced solutions to usher spending along the way.
The report highlights that technology has allowed a purchasing portfolio that is more sustainable and affordable, but also that it can cater to the on-the-go, “I need to know now!” mentality often seen among the Gen Y population. And it’s not that millennials really need to know, it’s that when information or a process is hard to follow, there is a sense of distrust that arises and this can cause millennials to look elsewhere when spending their money.
Camping is one industry that has seen a big surge in millennial interest. Technology is helping millennials learn more about camping via online resources, tutorials and social media. In 2018, 56% of all new campers were millennials, according to CB Insights.
Millennials want to know about what they are buying, just like anyone, but the habits that have formed are different than those of previous generations and this is why these noted industries are important to follow.
“What was once a world requiring personal interaction has now become a world of convenient, mobile interaction,” says Amanda Dorenberg, a recognized expert in the marketing and technology scene with 15 years of experience. Dorenberg now serves as the chief data and technology officer at FrontRunner Technologies, which specializes in digital out-of-home (DOOH) ad-programmatic technologies.
Industries such as consumer goods are profiting hard off a quest for “transparency” in the digital age. The way millennials shop is often coupled with a story or experience, a charitable cause, or something that feels less transactional.
“In today’s beauty market, consumers purchase products and then try them out on social media, asking for everyone else’s opinions on how it should make them feel,” says Dorenberg.
10 to 15 years ago if you tried a product, you either liked it or returned it, but that’s changed with technology and new social formations among millennials.
Fast casual dining is another industry that has evolved with the use of technology, and one millennials like to spend in. The report says that both traditional dining and fast food chains push for personalization and a lot of this personalization is presented with the use of technology.
Findings cited in the report stated that 25% of fast casual diners said that technology options are an important factor in their choice of restaurant. Mobile ordering, self-serve kiosks and the ways service is administered inside restaurants (from front-of-house to back-of-house) are being repurposed through the proliferation of technology.
Earlier this month, the Ontario Municipal Employees Retirement System (OMERS) made a $100-million investment in Toronto’s TouchBistro, a business that heavily uses its iPad POS and payments system to manage its operations. The processing of tables and food is happening more and more through the interlock of technology and millennials are a big subset buying into this system.
Another key industry is the micromobility industry. Bird Canada recently did a Toronto test pilot with its fleet of e-scooters, for example.
“I think the e-scooter space was a very clever niche that blew up,” says Dorenberg. “This form of transportation is extremely popular in warmer urban locations where most of these companies originated. California is kind to these companies,” she says. “Who doesn’t want a super convenient form of transportation that’s inexpensive, doesn’t require you to park the e-scooter in a specific location, and affords you the luxury of not having to drive, take Uber or Lyft or carry your skateboard with you everywhere you go?”
Financial services and banking is another area that has seen a lot of growth in millennial spending, the report notes. Canadian companies like KOHO and Clearbanc are just two examples of how modern fintech is evolving with personal finance, allowing more millennials to make lending and purchasing decisions that were once only available through traditional banking institutions. Digital currencies and emerging technologies like blockchain hope to make transactions even more seamless, adoptable and affordable for millennials.
“Generation Y’s secret weapon when it comes to navigating budgeting, saving, investing and spending—even with depressed wages and a less-than-desirable job market—is technology,” notes the report.
“Transacting has seen the onset of widely adopted e-commerce, tap to pay and digital payment solutions through to tokenization of assets and creation of digital currencies,” adds Dorenberg.
While millennials tend to favour spending their money on an experience, it could also be because there is no sense of security in the future. Earlier this year MNP reported that nearly half of Canadians are only $200 away from financial insolvency. Perhaps the mentality of “do now, think later” is more about what won’t be there later, so might as well take part in the experiences while we can.