Millennials are prioritizing their cars and homes less and less, and assigning greater importance to personal experiences — and showing off pictures of them. It's a trend that's ultimately helping fuel growth of billion-dollar-plus start-ups like Uber, WeWork and Airbnb.
The shift among members of America's now-largest generation is forcing many clothing retailers, particularly those with a young customer base, to quickly adapt, or in the case of Aeropostale, to file for Chapter 11 bankruptcy protection.
Millennials "aren't spending our money on cars, TVs and watches," Taylor Smith, CEO and co-founder of Blueboard, told CNBC. "We're renting scooters and touring Vietnam, rocking out at music festivals, or hiking Machu Picchu."
Blueboard, which sells "experiential" packages to companies, has customers including Astex Pharmaceuticals and GoPro and designs perks such as skydiving, cooking classes and couples massages.
A study by Harris Group found that 72 percent of millennials prefer to spend more money on experiences than on material things.
The trend is creating opportunities for start-ups, such as DayBreaker, an early morning weekday rave that hands out protein bars and energy drinks; Night Nation Run, a 5K late-night race; and Diner en Blanc, a dressy pop-up picnic where guests often spend hundreds of dollars.
The trend is also forcing established companies to adapt. Macy's, for instance, is using miniconcerts, yoga classes and cafes to draw consumers through its doors.
Macy's monitors and forecasts trends, from Fashion Week and music festivals like Coachella — highly attended by millennials — analyzing things like the average spending a millennial may put toward their Coachella outfits. The retailer hopes to tap into the money being spent on the outfits.
Macy's is rolling out such initiatives at a time when many brick-and-mortar retailers are struggling. Earlier this year, Macy's announced the closing 40 stores and more than 4,000 layoffs. Its shares are down more than 41 percent over the last year.
Social media and a 'fear of missing out'
Millennials view ownership differently than previous generations did. While young adults have traditionally placed high value in a car and home, many are now seeing them as major commitments. The trend predates millennials but is accelerating: Since 1987, Harris group found that the share of consumer spending on live experiences and events relative to total U.S. consumer spending increased 70 percent.
A lot of millennials' motivation has to do with distributing photos of themselves on social media. The Harris Poll found that factors such as a craving for recognition (for example, how many likes someone gets on their Instagram post), and a "fear of missing out" help drive millennials' cravings for experiences.
Facebook, Instagram and Snapchat are all visual mediums designed less around what people are wearing or driving and more about what they're doing. At a recent Diner en Blanc event in Philadelphia, the majority of the 4,500 young adults present had a phone in one hand as they set up for an picnic.
"There's very few surprises in everyday life now," Michelle Homsher told CNBC on what inspired her to spend $35 to bring her own picnic basket and dinner and sit among thousands of strangers.
Jenna Caroccia, a professional fundraiser, posted four photos to her Instagram account before the event was even finished. "I love using the event's hashtag on Instagram because you get to meet other people and you want to see how everyone else's experience was."
And for some, it comes down to simply saying, here I am.
"I'm posting a photo on Instagram (even though) everyone knows I'm here," Shavyra Chambers, a communications associate, admitted to CNBC. "I don't post things to make people jealous, but just to let them know what's going on."
Correction: This story was revised to correct the spelling of Michelle Homsher's last name.