How Millennials Are Leading the Charge for the Experience Economy

June 12, 2018

It sometimes seems that millennials are constantly warding off a barrage of questions about their supposed narcissism, their frivolous spending habits, and the inordinate time they spend on digital devices.

These inquiries are often slanted toward the assumption that millennials are miserable or confused. In fact, they might just be happier than ever—and some of that could be due to the “experience economy.”

According to the Harvard Business Review, experience economy companies “intentionally use services as the stage, and goods as props, to engage individual customers in a way that creates a memorable event.” In other words, they connect with consumers by inviting them to be active participants.

For millennials, to the appeal of the experience economy is the result of a variety of factors. First, consider the rise of social media and technology. The popularity of Facebook, Instagram, and Twitter means people can post to their accounts—and monitor others’—every minute of every day. For some, this creates a need to illustrate, for their social followers, how awesome their life is by documenting the amazing adventures they’ve been on recently.

“It used to be that our car, handbag, or wallet showed our status. Now we post Facebook pictures from a chairlift in Charmonix or the latest music festival,” says The Guardian in this article.

This could not be truer for the millennial generation:  According to a recent study cited on CNBC, 72% of millennials prefer to spend more money on experiences than on material things.

To see further evidence of this shift, look at the rise in live entertainment and music festival ticket sales. Events like Lollapalooza and Coachella are drawing more millennials than ever, which has led to the introduction of another music festival, Grandoozy, right here in Colorado in September.

These kinds of live experiences provide an outlet for millennials to get together with friends, enjoy music, and feel that their money is going to something that will ultimately bring them more happiness than the latest “blink and you missed it” material trend ever could.

A second reason for the popularity of the experience economy among millennials could be the Great Recession. A large number of millennials entered the workforce during the worst years of the crash and its aftermath, so they had to adopt alternative career goals and frugal spending habits on the fly. Coupled with rising student loan debt and costs of living, big purchases like a new car or a down payment on a home seem less attainable for many. Experiences, on the other hand, are much more doable on a limited income. (That’s not to say that big ticket items aren’t completely off the table; it’s just hard to make the case for them given the financial burdens millennials are dealing with in the here and now.)

Ultimately, this focus on the experience economy is driven by both personal and financial reasons. But it’s also safe to say—for the moment, at least—that because of this, millennials are happier and more socially active than previous generations despite the financial burdens that have been thrown at them.