Millennials spend more money on "experiences" than their parents
Unlike the generations before them, Millennials are spending a lot more money on "experiences" -- travel, entertainment, and dining.
According to the latest report by JP Morgan, which looked at the expenditure of Millennials -- those born between 1981 and 1997 -- who used Chase debit and credit cards in 2015, the younger generations are spending more of their disposable incomes on travel (6%), entertainment (12%) and dining (16%).
The three categories, classified as ''experiences'' by JP Morgan, collectively accounted for 34% of the average Millennial spend last year. This compares to 28% for non-Millennials, said the report.
However, by individual category, retail was the top expenditure category, accounting for 19% of Millennial spend in 2015. This compared to 20% retail expenditure for non-Millennials.
The grocery category accounted for 15% of Millennial expenditure, followed by transportation/fuel (12%) and home improvement (3%). The 'other' category weighed in at 17%.
JP Morgan highlighted the importance of understanding Millennial consumer behaviour.
"Representing 30% of the 18-plus population today, Millennials are the largest generation and an increasingly influential demographic with $1.4T in retail spending by 2020," said the firm in a statement.
Furthermore, the compound annual growth rate in retail spending for Millennials is predicted to be 15% from 2014 to 2020. Non-Millennials will see a 4% increase, said the study.
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