The millennial generation is expected to outspend baby boomers by 2017, yet retailers underestimate the size and purchasing power of the younger consumer group, according to a new study recently unveiled by Berglass + Associates and Women’s Wear Daily. The study, What Happens When Millennials Get the Wallet, found that retailers do not fully understand the needs of millennials and are employing business strategies and tactics that do not apply to them.

Conducted in September, the online survey queried 121 U.S. business leaders in all sectors of retail—including department stores, specialty stores, home shopping and direct-mail catalogs—primarily in the apparel, accessories, footwear and beauty sectors. The survey found that approximately half of respondents are unaware that millennials are expected to outspend boomers annually within five years. Also, millennials rely most on their friends to make buying decisions, yet more than a quarter of respondents mistakenly believe that online advertising is the number-one influencer of millennials' purchasing activity.

Additionally, 60% of respondents were not conducting any research or analysis of the millennial customer and 36% of respondents from companies with physical stores and e-commerce sites offer a seamless customer experience, yet millennials expect the channels to be integrated.

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