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Beyond the Transaction: Every Transaction Has a Story

Winning Over the Millennials

As the second largest generation on earth (just after their younger centennials) and a combined spending power of $2.5 trillion [1], it’s little wonder that identifying the needs and wants of millennials is currently a point of focus for global businesses.

To help our clients understand this group of 23 to 40 year-olds better, Mastercard recently commissioned a study with Kantar Consulting that examines what influences millennials to purchase. The research provides insights into what millennials want, and also what businesses can do to meet their tastes and expectations.

What makes millennials different?

As the world’s first generation to grow up in a digital world, millennials are tech-savvy and mobile. They are less motivated by materialism than generations past but will spend on products that are seemingly unique and not easily accessible. Having personalized experiences is a key want. Millennials also have no qualms turning away from brands that don’t match their identity or values.

What must businesses do?

Personalize, customize

Millennials today want products that are reflective of their individuality. Globally, 67% of millennials prefer to buy brands that make an effort to tailor to their needs, and 73% expect to be able to customize products and services. The expectation is even greater in developing Asian markets, such as China and India.

As a result, businesses can no longer regard personalization and customization as unique selling points, but as qualities that are integral to their offerings.

Show appreciation

As consumers, millennials seek recognition and extra benefits from companies for being loyal customers. Seventy four percent (74%) of millennials say it is important for them to be rewarded for their loyalty as compared to 66% across other generations.

Further, millennials are more likely to maximize benefits and rewards when spending, particularly in India where 81% of millennials follow this strategy compared to 70% globally.

For businesses, then, a product’s value must go beyond its basic utility and its personalization. Businesses must also create additional value-added programs that make this generation of customers feel appreciated and encourage their loyalty.

Go fast, frictionless

When it comes to consumption, millennials yearn for fast, frictionless and simple payment solutions. 67% of millennials say they would like to have one way to pay as compared to 59% of non-millennials.

In places like China, this desire can be seen accelerating behavior change. Says one female, aged 24, in China: “I never carry a wallet anymore, I always expect to be able to pay everywhere with AliPay—I will be in trouble if it doesn’t work, because I have no other way to pay.”

Globally, this mindset is driving the penetration of digital wallets—with millennials seeing the highest penetration of the technology. However, these are not yet mainstream. Debit cards, credit cards and cash are still used with much higher frequency.

As a result, businesses should be prepared to accept payment from millennials across a wide range of options. They should also endeavor to make those payment options as seamless and easy to use as possible.

Reflect well

Much like their counterparts in other parts of the world, Asian millennials have a keen sense of social and environmental responsibility and are willing to pay a premium for brands that reflect these values. Nearly two-thirds (63%) of millennials say they will choose financial brands with values similar to theirs. In China, this number jumps to 78%.

Another trend is that materialism and symbolism are giving way to experiential and spiritual aspirations, with millennials seeking out real value and authenticity. Almost half of millennials globally say they would rather spend money on life experiences rather than on material possessions. This attitude has the potential to lead to a fundamental shift in the tourism industry, among others.

Employ technology

Tech-savvy millennials are happy relying on technology to help with financial management, and fintech tools are already providing millennials with assistance that is hassle-free and convenient. 70% of millennials say that fintech innovations help them to be smarter with their money, and 64% say that technology makes dealing with their finances more fun.

Use of apps to help manage money is even more pronounced in Asia. In China and India, the numbers stand at 81% and 78% respectively. For companies at the intersection of tech and finance, this is a huge opportunity to further develop tools for this market.

Understand new wealth codes

Even within the millennial demographic, businesses will do well to recognize variations in tastes and perspectives – for example, between affluent and mass millennials.

Amongst affluent millennials, there’s a new wealth code that is defined by bite-sized luxuries in day-to-day life. Also referred to as ‘lite’ luxury, this refers to the premiumization of daily life from glamorized streetwear to cook-at-home meal kits with specialty ingredients.

Amassing higher social and intellectual capital, both of which are harder to earn and therefore prized, is also leading to demand for more unique life experiences that not everyone can have. This includes more enriching travel experiences, such as glamping and eco-sustainable tourism.

For these millennials, businesses must incorporate unique and individualized touches of luxury into their products and services to maintain appeal.

Plan for the future

As millennials make up an increasing percentage of workforces, economies and spending power, businesses must adapt to their needs and expectations to thrive. They must focus on more than just delivering form and function in their products and services, and also create experiences.

To do so, they can leverage technology to customize, reward and premiumize their offerings. They can also create value-add loyalty programs to constantly appreciate the millennial consumer.

Finally, businesses must remain sensitive to the ever-changing behavior of millennials. This includes staying aligned with their values as well as their habits, including in payments. Companies should also be willing to adapt, learn and grow with this generation to ensure their engagement and loyalty.

Source: Mastercard’s 2018 Global Needstates Segmentation study was completed by Kantar Consulting. The quantitative study was executed among 43,044 individuals (including 20,909 millennials) in 18 markets. Respondents consisted of a representative sample of men and women over the age of 18. All respondents interviewed were owners of financial products and classified as banked. The quantitative research explored the sample’s attitudes and needs based on 39,598 payment occasions. The markets surveyed are as follows: Canada, US, Mexico, Colombia, Brazil, Chile, UK, France, Germany, Nigeria, South Africa, UAE, Russia, India, China, Japan, Indonesia, Australia.


For more information on this study, please contact Mastercard’s Asia Pacific Communications at