Why Experiences Are Great Valentine's Day Gifts Too
Jenna and Steven have Valentine’s Day all mapped out. The young couple—among the many I interview as a consumer psychologist—has agreed on a nontraditional plan for the holiday, involving no gifts but lots of fun, and each of them getting exactly what they want.
Jenna has agreed to spend a morning fishing with Steven, and on the way home they’ll stop at an outlet mall where Steven will accompany Jenna while she browses. There won’t be any gifts purchased or exchanged. Instead, each person is giving the other the gift of company and participation in an activity they wouldn’t otherwise choose for themselves. While Jenna and Steven’s version of Valentine’s Day isn’t the romantic dinner that most would imagine as a tiny bit more ideal, it’s an example of how adult millennials are changing retail and marketing.
According to the National Retail Federation, 44% of 24- to 35-year-olds are planning an experience together to celebrate Valentine's Day, and more than 50% say a shared experience is what they’d most like to receive. That’s significantly higher than the average of all adults, of whom only 39% are hoping for an experience—for example, a spa day, a concert, or fun day excursion—as a Valentine's present. Millennials will also spend more on those experiences, averaging $104 compared with $87 for all adults.
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This fits a pattern of how millennials shop and buy across other categories. They aren’t cheap. From fine wine to home delivery to high-end electronics, young adults demonstrate they are willing to spend more than other generations on everyday pleasures and conveniences. But purchases need to include more immediate emotional impact and instant bang for their buck than they did for older generations or millennials like Jenna and Steven just aren’t buying. Here are three reasons why:
1. Time costs are apparent to a generation of entrepreneurs. Alicia, a 31-year-old newlywed whose husband Dan is an Uber driver and TaskRabbit, explains it this way: “I’d rather be with him for the five hours it would take him to make enough money to buy me a necklace.” According to Kimberly Palmer, author of The Economy of You, one-third of millennials make money through entrepreneurial ventures. In an interesting way that I rarely see with older generations, Alicia factored in time away from Dan in deciding where she would get the most emotional impact from a Valentine’s Day gift. In her time/value equation, the classic fancy necklace lost out, and a nice night out of town—spent with Dan—came out as the clear winner.
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2. Millennials crave excitement, not ownership. Ownership is simply not as central to the millennial mindset as it was to other generations. As I write about in my book, Decoding the New Consumer Mind, the long-term commitment that’s by nature a part of big-ticket purchases such as cars, homes or even luxury handbags is less appealing to a generation that gets bored more easily, values immediacy, and doesn't want to be tied down. The act of going on an adventure, attending a festival, or just attending a big party has immediate and emotional impact. Aside from the obvious—that's it’s simply fun to be with the one you love, and experiences are memorable markers of affection—experiential gifts have a leg up with millennials because social media chronicling lends permanence to purchases that don't stick around physically, like a great dinner and an amazing festival.
3. It's OK to brag about experiences, but not stuff. Fawning over each other’s Valentine’s Day baubles and flowers at the office may be antiquated, but fawning, bragging and “sharing the joy” will never go out of style. It’s normal for people, especially young adults, to want to demonstrate to others that they are loved. But it’s far more socially acceptable to post the details of an expensive meal or an impromptu weekend getaway on social media than it is to show off diamond earrings or some other expensive gift. These gifts might all cost the same amount of money, but bragging about one could expose the recipient as materialistic, whereas sharing about the others simply demonstrates your appreciation of the good life—and, critically, appreciation of time spent with the most important person in your life. This gives experiential gifts an edge over tangible "stuff" too.
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Tangible gifts will ever go out of style. But the rising preference for experiential gifts--especially “the gift of me”-- demonstrates the dynamism and disruption that millennials bring to the marketplace.
Kit Yarrow, Ph.D., is a consumer psychologist who is obsessed with all things related to how, when and why we shop and buy. She conducts research through her professorship at Golden Gate University and shares her findings in speeches, consulting work, and her books, Decoding the New Consumer Mind and Gen BuY.