A seismic shift in wealth distribution is already reshaping consumer spending patterns across America, according to a recent study from Visa Business and Economic Insights (VBEI). This “Great Wealth Transfer,” estimated at a staggering $36 trillion, is set to ripple through the economy over the next 20 years, with immediate consequences for small businesses, particularly in sectors like housing, travel, and retail.

Visa’s analysis reveals that more than three-quarters of inheritance recipients already have a higher net worth than the average household, indicating that much of the incoming wealth may not translate into spending. Instead, it is likely to be invested or saved. “For businesses in big-ticket sectors like housing and travel, this is not a future trend to watch,” said Wayne Best, Visa’s chief economist. “It is already influencing consumer decisions—and shaping where growth will be distributed in the years ahead.”

Approximately 75% of the wealth being transferred is expected to remain within financially secure households. This means that while a noteworthy $8 trillion could stimulate consumer spending, the overall flow will be more targeted. The sectors poised to benefit the most include automobiles, housing, and retail. Visa predicts a 6.4 percent annual growth in auto spending, which could ultimately translate into substantial sales for small and medium-sized automobile dealerships.

Furthermore, the study notes that the impact will be most visible in the major financial decisions that consumers are currently making. One in four millennial homeowners received parental help for down payments, with over half of inheritance recipients reporting that expecting an inheritance was critical to their ability to purchase a home. This trend presents a unique opportunity for small real estate businesses and developers to not only target younger buyers but also cater to the increasingly prevalent trend of multi-generational housing.

The travel industry will also feel the effects, with 28% of grandparents reporting they’ve taken trips with their grandchildren without the parents, a trend that speaks to the desirability of experience over material goods for many consumers. Small travel agencies and local tourism businesses can leverage this opportunity by tailoring packages that target these multigenerational travelers.

While these developments herald significant opportunities, small business owners should be aware of potential challenges. The concentration of wealth means that not all sectors will benefit equally. The anticipated $8 trillion in spending is a drop in the ocean compared to the total wealth being transferred, which highlights a may impact only select market segments. Additionally, while families are opting to share their wealth earlier, the distribution of funds might not be extravagant for all businesses, particularly those in suburbs or less affluent areas.

Moreover, business owners must consider that the wealth being introduced into the market is likely to head towards savings and investments. For financial institutions, this signals an opportunity to capture assets as emerging heirs look for ways to manage their newfound wealth. However, businesses that fail to adapt or understand these shifts could miss out on the potential upside.

As Visa’s findings become increasingly relevant, small business owners will benefit from closely monitoring consumer trends. Those who can position themselves effectively in sectors benefiting from this wealth transfer stand to gain significant market advantages. Understanding this economic overhaul will not only inform marketing strategies but also enhance customer engagement as wealth dynamics evolve.

For further insights from Visa’s research, visit the full report here.

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This article, “Wealth Transfer from Boomers to Millennials Reshaping Spending Trends Now” was first published on Small Business Trends