Millennials shift spending from goods to experiences as costs rise

Millennials are spending less on material goods and more on experiences as rising living costs reshape consumer priorities in Kenya and across Africa.

Young consumers aged 29 to 44 are directing more of their disposable income toward food events, live music sessions, curated gatherings and weekend outings instead of designer goods and electronic gadgets, altering how brands compete for consumer spending.

Experian, a global data and analytics firm, found that nearly 60 per cent of millennials worldwide prefer spending on experiences or events rather than material purchases.

In Kenya, a NielsenIQ Consumer Outlook 2025 report found that 49 per cent of consumers plan to cut discretionary spending on goods while prioritising experiences linked to social connection.

Housing costs in Nairobi remain out of reach for many millennials, and wages have lagged behind inflation, limiting long-term purchasing power, according to market analysts.

Rather than save for assets they consider unattainable, many younger consumers choose short-term spending that offers social value and personal reward.

Kenya's entertainment and media revenues reached $3.8 billion (Sh491 billion) in 2023 and are projected to rise to $4.8 billion (Sh619 billion) by 2028, according to PwC projections.

Matata Dickson, founder of Crispy Life Events, says interest in experience-based gatherings has grown steadily since launching the Rhythm and Brunch series.

“We treat experiences like the serious business they are,” notes Dickson.

TransUnion's Consumer Pulse Study found that Kenyan millennials and Gen Z consumers whose incomes rose in 2024 directed additional income toward digital services and experiences rather than large purchases.

The study found that 42 per cent of consumers planned to reduce spending on major goods.

Dickson said brands that focus on cultural relevance and community-based engagement have attracted repeat customers, while others have struggled to connect with younger audiences.