Better Living Through Big Data

The Future of Shopping: How Millennials are Changing the Holidays

Ken Kaplan Executive Editor, iQ by Intel
retail digital sign

More than 52 percent of the world’s population is under the age of 35, but new research showing why and how this generation is changing traditional shopping experiences could have bigger implications.

Like a swarm, millennials — those 18- to 33-year-old digital natives who intertwine their online and offline lives — are about to become the world’s most influential spenders.

Recent research shows this generation is bending preconceived notions of consumerism, causing big name and smaller brands to innovate in order to remain relevant.

It’s a shift sure to impact the traditional holiday shopping season, when so-called omnichannel shoppers, those who shop online, via mobile devices and in stores, will spend an average of $592 on gifts, which is 66 percent more than shoppers who only buy inside stores in the United States, according to a recent report by Deloitte.

Despite having the ability to browse and buy almost anything online anytime, young omnishoppers don’t miss out on the busiest shopping days of the year. Seven out of every 10 shoppers in the United States, aged 18 to 33, surveyed by New York-based research firm YPulse said they’re hitting the stores on Black Friday and websites on Cyber Monday this year.

One of the two biggest trends driven by omnishoppers is the blending of online and real-world shopping experiences, said Jamie Gutfreund, CMO of Deep Focus and lead researcher on the Cassandra Report: Consumed. The report is based on insights derived from a survey of 1,300 millennial consumers in the United States.

“They don’t even go online, they already are…they’re always online,” said Gutfreund.

“Separating the real world from digital world is an old concept. Younger people experience brands as a whole, so they expect online inventory to match what they’ll find in store. They want that brand experience to match wherever they are.”


There are 2 billion millennials living in the world today, and according to some estimates this group already accounts for half of the retail spending.

The Cassandra Report expects millennials to purchase $2.5 trillion dollars of goods and services in the year 2020, and by 2025 this generation is projected to make up 75 percent of the workforce.

But their influence is enormous now, said Jose Avalos, worldwide director of retail and digital signage at Intel.

“Young people are using technology to solve problems or create more engaging relationships and experiences,” said Avalos. “They want to have a say in shaping their favorite brands, what those brands stand for and how they will evolve.”

That desire to influence has stores introducing new technologies to interact with and keep customers engaged. Avalos sees it in places like Lego stores, which uses augmented reality to allow parents and kids to see what inside boxes before they buy.

Even American Apparel is using technology to make sure online inventory matches what shoppers will find inside stores.

While 63 percent say they are loyal to particular brands, the manifestation of the loyalty is much different than any other generation, according to Gutfreund.

The second big trend she points to is the shift away from buying and ownership toward renting and experiences.

“Young people are not into consumption as much as collaboration,” said Gutfreund. “They can pin [to Pinterest] or post [to Facebook, Instagram or Twitter] a brand and that gives them the same benefit and status as owning a product from the brand. It used to be you had to have the bag or shoes, but now it’s all about access.”

She mentioned Rent the Runway, Relapse Clothing and the Next Suite Company as examples of new kinds of clothing outlets for people who would rather rent then buy clothes.

“This model has taken off, especially for travelers, holidays and events like weddings,” she said.

Rent the Runway has become so popular that it now is one of the largest users of dry cleaning.

The Rise of Fauxsumerism

So-called acts of browsing, “wishlisting” and pinning often precede and even take the place of purchasing new items, according to the Cassandra Report.

While mobile devices have made the world increasingly transactional from almost anywhere in the world, they are also redefining the notion of window shopping. One-third of 13- to 34-year-olds consider browsing to be more fun than buying and just as exciting.

woman shopping

“My generation is demanding and impatient when it comes to consumption,” said Meredith, a 31-year-old woman who participated in the Cassandra Report.

“The Web is responsible for this dynamic, because just about anything you could desire is not only accessible, but can be delivered directly to your door. There is massive competition in both price and aesthetics which makes today’s consumer more selective than ever before.”

Even the notion of being more selective means something different to this generation.

“People are so concerned with their image that 50% say they think about what they will wear based on how it will be seen by a camera [which are everywhere thanks to smartphones],” said Gutfreund


This generation has also given rise of the sharing economy, as characterized by Uber, Airbnb, Spotify and even Netflix. The Cassandra Report shows that most millennials don’t feel a need to own things. This presents tremendous challenges to the traditional relationship between buyers and sellers.

But as this new sense of “nownership” becomes better understood, brands can potentially enter into richer relationships with their customers, ones that can last beyond one season or one product’s brief life cycle.

“The concept of owning does not seem necessary anymore because there are so many better alternatives to owning things nowadays,” said Natalie, an 18-year-old participant in the Cassandra Report. “You don’t need to be an owner of something to have access to it.”

Interestingly, when young people do buy, 45 percent consider resale value before making a purchase.

They turn to sites like ThredUp, the Kelly Blue Book of fashion, to see how the value of things will hold up over time, said Gutfreund.

Or they look for products that will last for a long time, things of quality craftsmanship and that have an interesting story behind them.

“If you can shop [anytime] and find amazing prices on great stuff, why would you settle for mediocre?” asked Gutfreund.

Gutcheck Anyone?

The Cassandra Report shows that making a purchase is no longer a solo act but rather a collective decision for many young shoppers.

While there may be more product and service options than ever, there are also more second and even third opinions to be found before deciding to buy.

The dressing room selfie with “Should I get it?” shared on Instragram is increasingly common for young shoppers. That instant feedback from friends and followers is likely already backed by online reviews or confirmation from Pinterest that the item is popular.

MEtail and Relationships

The always connected millennial has also sparked a new type of merchant.

Whether it’s via a Craigslist garage sale-style purge, an Ebay auction or the creation of a handcrafted good for Etsy, the millennial blurs the line between shopper and merchant as they are increasingly becoming a merchant themselves.

woman on computer

Companies like Shapeways will print and sell anyone’s 3D design, allowing individuals to outsource production and fulfillment of their ideas. It’s something the Cassandra Report calls MEtailer.

An interesting side effect of the MEtail phenomena is allowing those with big social media prowess to shape shopping experiences at well-known brand name stores. Target asked three top pinners to design limited-edition party collections and Aeropostale enlisted top YouTuber Bethany Mota to launch the Bethany Mota Collection.

On the flipside, there’s the notion of de-branded.

“It’s the idea that we don’t want to be a signpost for brands,” said Gutfreund. “Eighty percent of people told us they want to customize what they’re wearing. They want to put their own stamp on it and make it identifiable.” She said Hermes and Vans are doing this — covering the higher and lower end of the consumer scale.

While shopping may or may not make the world go around, it’s helping to define what Gutfreund calls a Global Consuming Class.

“These young people are growing up with the same brands, the same access to tech and living arrangements, so when they connect they’re having more in common,” she said.

Could these shopping behaviors reflect how millennials will also break down cultural barriers and spark new kinds of relationships in our increasingly interconnected world?

“Thirty-five percent of people surveyed said they have relationships with people they don’t know,” said Gutfreund. And sometimes those online relationships are more meaningful than real-life ones.

While shopping is closely tied to self awareness and identity for millennials, the ability to share experiences, tastes, styles and desires through social media is allowing them to find others around the world with common interests.

It’s clear that shopping is about more than ownership of stuff for millennials. It’s about access and interconnectedness, building a relationship with whatever they consume — be it information, experiences or a pair of new-to-me shoes.


Todd Krieger contributed this story.


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