Generation Y: Prioritising lifestyle and experiences over the accumulation of assets
Welcome to our series of blogs from our latest report on The Future Consumer, where we aim to unpack the current traits, behaviours and mindsets of our current generations and understand where they might head in the future.
We believe that generational analysis isn’t a passing fad or a generalisation of a cohort of people, but an embedding of one’s psyche and worldview when people of various ages are living through the same political, technological or social shifts.
Who is Generation Y?
Generation Y, also known as the Millennials, are a generation who have chosen differently when it comes to traditional life markers by delaying marriage, children and the purchasing of their first home. This generation are currently in their family forming years, entered the workforce during the GFC and are in the middle of their careers during the COVID-19 pandemic.
Currently the median age of marriage is 30.5 years for women and 32.4 years for men – five years later than that of 1987. The median age at which women become a mother for the first time has increased by 4.6 years to 31.4 years old.
The great Australian dream of home ownership has felt out of reach for many Gen Ys, and as a result this generation has more of a propensity to focus on lifestyle pursuits and on valuing people and experiences over acquiring real estate.
To understand the shift, we look at the economics of entering this life marker. The average house price in Sydney today is 13 times the amount (in today’s dollars) of the average full-time annual income. For comparison, the parents of Gen Y (The Baby Boomers) would see the average house price being only 6 times the average-full time income. From this, we can conclude that real estate prices are rising much faster than their incomes.
So it isn’t surprising when lifestyle pursuits take precedence, creating an all-new “Australian Dream” filled with travel and experience design. In fact, Gen Ys took more overseas trips in 2019 (3,119,918) than all Australians took in 1997 (3,040,278).
A generation of digital natives, Gen Y grew alongside the sophistication of the internet. Whilst their older siblings in Gen X were introduced to the commercialisation of the internet in it’s infant form, Gen Y saw the explosion of Web 2.0 (the advent of participatory social, with the emphasis on user-generated content such as Facebook and Flickr).
Understanding the largest consumer demographic
Looking into the future, by 2030, Gen Y will comprise the largest consumer demographic. The effect of a highly innovative, technological and social generation will shape and design the retail landscape in the future, blurring the line between online, data-rich interactions and the traditional “offline” shopping mall experience.
- Online retail will become more efficient in packaging and delivery to reduce waste in order to meet the ethical standards brought about by younger generations.
- Shopping centres will still have their place, but transform into ‘hubs’ fostering community and provide places of social interaction
- The sharing economy will continue to become embedded into our way of life. Renting, or paying a subscription fee for goods such as transport or clothing, rather than owning outright, will suffice the needs of many consumers.