The millennial generation, consumers in their mid-20s and 30s, is overtaking the baby boomers as the largest generation of shoppers in history, Barron’s reported.
Barron’s reported that by 2020, millennial spending will account for $1.4 trillion in U.S. retail sales, according to the consulting firm Accenture . That will be a quarter of the estimated $5.7 trillion total, according to eMarketer.
This year, the oldest millennials are turning 38—a prime age for young families and household formation. Spending tends to rise with income as consumers reach their late 30s and 40s, and then tapers off in their 50s, according to Census Bureau data.
“Clearly, one would expect millennial spending to increase healthily over the next decade or so,” Richard Fry, a senior researcher with the Pew Research Center, told Barron’s.
Barron’s identified five stocks that should benefit from millennial spending and are attractive for other reasons:
- Farfetch (FTCH); High-end online fashion retailer with growing share of revenues from millennials.
- Home Depot (HD) First-time home buyers are fueling a housing recovery and sales of home-improvement goods.
- Lovesac (LOVE) Maker of modular "sactionals" furniture that appeals to young families.
- Nike (NKE) Nike's digital and traditional shopping "experiences" are resonating with millennials.
- Zuora (ZUO) Fast-growing software company benefitting from the subscription economy.
The buzz about millennial spending comes in the wake of a recent report that found that more than half of millennials, or those born between 1981 and 1996, think that they will be millionaires at some point in their lives, according to a 2018 survey from TD Ameritrade.
The TD Ameritrade survey found that over 70% of millennial men say they will be millionaires at some point, while 38% of millennial women report being similarly optimistic.
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