Post on 12-Apr-2022
1 MILLENNIALS IN 2015: RETAIL DEEP DIVE
MILLENNIALS IN 2015:
RETAIL DEEP DIVE
2 MILLENNIALS IN 2015: RETAIL DEEP DIVE2
MILLENNIALS IN 2015: RETAIL DEEP DIVE
Diversity, self-expression and optimism define the Millennial
generation. As a group, this young generation is more
racially and ethnically diverse than any before it. Millennials
are fueling an urban revolution, looking for the vibrant,
creative energy that cities have to offer with a mix of housing,
shopping and offices right outside their doorstep. They value
self-expression and artistic pursuits.
Millennials are deal shoppers who won’t compromise
on quality. They place a premium on authenticity–from
the products they buy to their interactions with brands.
In particular, Millennials value goods that are handmade
and locally produced. They want to know the story, history
and heritage behind the items they purchase. And they
demand a connected, multi-channel shopping experience.
Millennials have been hard hit by economic turmoil with
high unemployment rates and high student loan debt.
However, upscale Millennials, who are more established
with significantly more cash to spend, represent a pocket of
opportunity for retailers.
MILLENNIALS—STRIVING, OPTIMISTIC & AUTHENTICToday, there are more Millennials (those born between 1977 and 1995)
in the U.S. than Baby Boomers. They are 77 million strong and make up
24% of the U.S. population. Just two years ago, Millennials and Boomers
were on equal footing, each representing 24%.
U.S. GENERATION DISTRIBUTION
27%
24%16%
23%
10%
GEN Z GEN XMILLENNIALS BOOMERS SILENT
NIELSEN GENERATION DEFINITIONS:• GREATEST/SILENT GENERATION (PRE-1945) AGE 70+• BABY BOOMERS (1946-1964) AGE 51-69• GENERATION X (1965-1976) AGE 39-50• MILLENNIALS (1977-1995) AGE 21-38• GENERATION Z (1996-PRESENT) UNDER AGE 21
Source: Nielsen Pop-Facts 2015
3Copyright © 2015 The Nielsen Company
MILLENNIALS IN 2015: RETAIL DEEP DIVE4
Millennials have been hard hit by the recent turbulence in the economy.
They’ve experienced high unemployment along with high student
loan debt, and they have witnessed their parents and grandparents
struggle with investment losses during the Great Recession. However,
Millennials’ high education levels and optimism foreshadow their
future success.
According to the second-quarter 2015 Nielsen Consumer Confidence
report, roughly 70% of Millennials indicate their personal finances will
be either good or excellent in the next year, yet 55% still feel like the U.S.
is in an economic recession. This makes Millennials cautious spenders
and savers. About half of Millennials (51%) have cut down on take-away
meals in order to save on household expenses, and 48% are spending
less on new clothes. However, as a generation defined by their use of
technology, the majority of Millennials aren’t willing to delay upgrading
their PCs or mobile devices to save money.
Source: Nielsen Consumer Confidence Study, Q2 2015
Compared to Last Year, Which of the Following Actions Have You Taken to Save on HH Expenses?
MILLENNIALS ARE CHANGING THEIR SPENDING HABITS TO SAVE MONEY
18%
17%
22%
23%
25%
25%27%28%
32%37%
45%45%
48%
51%Cut down on take-away meals
Spend less on new clothes
Try to save on gas and electricity
Cut down on out-of-home entertainment
Switch to cheaper grocery brands
Cut down on at-home entertainment
Cut down on holidays/short breaks
Use my car less often
Delay the replacement of major household items
Delay upgrading technology, eg. PC, Mobile, etc.
Cut down on telephone expenses
Cut out annual vacation
Look for better deals on home loans, insurance, credit cards, etc.
Cut down on or buy cheaper brands of alcohol
Cut down on smoking 13%
0% 10% 20% 30% 40% 50% 60%
0% 10% 20% 30% 40% 50% 60%
42%Putting into Savings
26%Paying Off Debt/Credit Cards/Loans
35%New Clothes
24%Holidays/Vacations
23%I have No Spare Cash
23%New Technology Products
21%Out-of-Home Entertainment
16%Home Improvement/Decorating
11%Retirement Fund
Investings in Shares of Stock/Mutual Funds 11%
Source: Nielsen Consumer Confidence Study, Q2 2015
Once you have covered your essential living expenses, which of the following statements best describes what you do with your spare cash?
MILLENNIALS ARE SAVING THEIR EXTRA CASH
In addition to changing their spending
habits, Millennials are saving more of their
discretionary income. After covering their
living expenses, putting money into savings
is the top action taken by Millennials.
While Millennials are spending less on
clothes to save money, 35% still make
apparel purchases with their extra cash.
Experiences are a priority for Millennials
with 24% spending their extra money on
vacations. And despite recent improvements
in economic conditions, almost one-quarter
(23%) say they don’t have any extra money
after payday.SPEND EXTRA CASH
ON VACATIONS
24%
SPEND EXTRA CASH ON APPAREL
35%
5Copyright © 2015 The Nielsen Company
6 MILLENNIALS IN 2015: RETAIL DEEP DIVE
Source: Nielsen Pop-Facts 2015
UNDER $25,000 $25,000-$50,000 $50,000-$75,000
$75,000-$100,000 $100,000+
MILLENNIALS BY INCOME TOTAL U.S. BY INCOME
27.8%15.4%
26.6%18.7%
11.4%
23.5%22.8%
23.9%17.8%
12.0%
Economic struggles are a reality for many Millennials, but one subset is thriving. Roughly 27% of this generation earn
more than $75,000 per year, 15% of this group earn more than $100,000. In addition to their high income, these upscale
Millennials (HH income $75k+) have amassed significantly more wealth than their generation as a whole. The median
liquid wealth value (income producing assets; IPA) for upscale Millennials is $157,500, more than 11 times the median IPA
of their generation as a whole. Appealing to the distinct wants and needs of upscale Millennials is vital in capturing this
lucrative segment.
Upscale Millennials lead a more established lifestyle than their generation as whole. These upscale consumers are more
likely to be married, well-educated homeowners. On the other hand, life for this generation as a whole tends to be in flux,
as 29% plan to look for a new job and 18% plan to move in the next year.
MILLENNIALS BY THE NUMBERS
MEDIAN INCOME PRODUCING ASSETS (IPA)
TOTAL MILLENNIALS UPSCALE MILLENNIALS (HH INCOME $75K+)
Median Household Income $48,797 $109,818
Presence of Kids 57% with kids 57% with Kids
Race/Ethnicity74% Caucasian, 21% Hispanic,
14% African-American, 4% Asian-American
78% Caucasian, 15% Hispanic, 9% African-American, 6% Asian-American
Homeownership 47% Homeowners 68% Homeowners
Home Type57% Single-Family Home,
23% Apartment, 9% Townhome, 3% Condo
72% Single-Family Home, 12% Apartment, 8% Townhome,
4% Condo
Education30% College Graduates,
11% Post-Grad Work51% College Graduates,
21% Post-Grad work
Source: Nielsen Scarborough 2015
Source: Nielsen Financial Track 2015
UPSCALE MILLENNIALS $157,500
$13,875TOTAL MILLENNIALS
$25,600GENERAL POPULATION
7Copyright © 2015 The Nielsen Company
MILLENNIALS IN 2015: RETAIL DEEP DIVE8
MILLENNIALS —DEAL SHOPPERS WHO DESIRE AUTHENTICITYAccording to the Intelligence Group, Millennials spend about $200
billion per year in the U.S. This figure is likely to grow as they age and
become more established. In order to capture their shopping dollars,
retailers must pay attention to the unique shopping habits of this young
generation. Millennials are deal hunters. They value authenticity and
locally made products, and they expect a connected, multi-channel
shopping experience.
Millennials, like the population as a whole, tend to frequent Wal-Mart.
Upscale Millennials, however, are less likely than their generation as
a whole to frequent Wal-Mart and are more likely to frequent Target.
Target has focused on capturing the upscale Millennial market through
its partnerships with fashion designers and the affordable, yet chic
Threshold home accessory line. This generation as a whole is likely to
shop at dollar stores, while upscale Millennials are likely to frequent
Best Buy, Costco and Old Navy.
TOP 10 RETAILERS SHOPPED IN LAST 3 MONTHS
Source: Nielsen Scarborough 2015
TOTAL MILLENNIALS
1. Wal-Mart 75.5%
2. Target 55.6%
3. Amazon 46.8%
4. Dollar Tree 38.6%
5. Kohl’s 30.9%
6. Dollar General 30.2%
7. JCPenney 26.4%
8. Family Dollar 25.6%
9. Best Buy 25.5%
10. Macy’s 22.9%
UPSCALE MILLENNIALS
1. Wal-Mart 67.8%
2. Target 65.2%
3. Amazon 59.7%
4. Kohl’s 39.1%
5. Best Buy 31.8%
6. Macy’s 30.3%
7. Dollar Tree 29.6%
8. Costco 29.6%
9. JCPenney 29.3%
10. Old Navy 24.4%
9Copyright © 2015 The Nielsen Company
MILLENNIALS IN 2015: RETAIL DEEP DIVE10
SHARE BRAND HERITAGE AND HISTORY WITH MILLENNIALS
Millennials are leading the “buy local” movement—a movement that
has become a $29 billion industry and doubled in size in the last 10
years, according to AdWeek. But Millennials aren’t just buying local;
they’re also contributing by making and selling their own goods.
Millennials make up more than half of those making and selling their
own goods. They value the personal, custom shopping experience that
buying local, handmade products affords. Roughly half (51%) say they’re
more likely to purchase an item if they have the ability to customize it.
Despite their love of a deal, Millennials are willing to spend more
to shop local. According to Edelman Digital, 40% prefer to shop
local, even if it costs more. When they’re not buying from their local
communities, they prefer to buy American-made products. Roughly
76% of upscale Millennials and 73% of the total generation say buying
American products is important to them. National retailers can
capitalize on this trend by sharing the story of their brand with them.
Make them feel like they’re a part of the process of producing the goods
they purchase by telling them how and where products were made.
SAVVY SHOPPERS & AVID RESEARCHERS
With limited money to spend, Millennials are savvy shoppers by
necessity. Avid researchers, 42% of them check at least four sources
when trying to decide on a purchase, according to Edelman Digital.
About a third make purchases only when they have a coupon or
promotional code. And roughly 40% buy previously used items online to
save money. Despite having more money to spend, upscale Millennials
are deal-lovers as well. Roughly 43% use coupons at least once a
month. Retailers can entice Millennials to buy with deals and coupons,
especially promotions that feel exclusive and customized to them.
Purchases have both short- and long-term value to Millennials. More
than half of this generation consider the resale value of an item before
buying it, according to research from the Intelligence Group. And in this
way, retailers looking to engage this generation should highlight the
long-term resale value of products by demonstrating quality, durability
and classic styling.
DELIVER A CONNECTED SHOPPING EXPERIENCE
Millennials are always connected. About 92% own a smartphone,
compared with 76% of Baby Boomers. Because technology is an
integral part of their lives, it’s an integral component of their shopping
experience. Millennials expect a seamless multi-channel shopping
experience. They’re driven by digital and want to control and customize
every phase of their shopping experience. The connected store concept
is on the cutting-edge of the multi-channel shopping experience.
Rebecca Minkoff, the women’s fashion brand, is blazing a trail with its
connected store concept, which focuses on the needs of this generation
and allows customers to select their own level of service—from trying
on an outfit in the store to purchasing it later on their mobile device.
Roughly 19% of Millennials and 31% of upscale Millennials spent over
$1,000 online in the past year. The majority (66%), use the Internet to
purchase hard-to-find items. Roughly 70% of upscale Millennials scour
the Internet for hard-to-find items.
Millennials use the Internet to engage with their favorite brands.
Roughly 36% of the total generation and 34% of upscale Millennials
share their opinions of products by posting reviews and ratings
online. And 27% of all Millennials and 24% of upscale Millennials like
to connect with brands via social media. Social media and mobile
technology can be used to deepen the relationship and loyalty among
this group.
11Copyright © 2015 The Nielsen Company
12 MILLENNIALS IN 2015: RETAIL DEEP DIVE
WHAT DOES IS ALL MEAN?Millennials have reached critical mass and are too large to ignore.
These young consumers spend $200 billion per year, and this stands
to grow as they become more established. They are deal shoppers.
They value authenticity and locally made products. And Millennials
expect a connected, multi-channel shopping experience. Focusing on
these key elements will help retailers capture opportunity within the
shopping landscape:
• Focus on Upscale Millennials: Upscale Millennials represent a key area of opportunity for retailers. Their shopping preferences are not dramatically different from their generation as a whole. However, they have money to spend, and their early life stage indicates they’re only at the beginning of building their spending power. Focusing efforts on upscale Millennials will deepen engagement and build loyalty with this lucrative segment.
• Offer Personalized Deals and Don’t Compromise Quality: Millennials are deal hunters and savvy researchers. These young consumers place a premium on getting a good deal, but not at the expense of quality. Retailers can encourage them to buy with personalized deals and promotions in the channels they prefer.
• Be Authentic: Millennials are leading the “buy local” movement. They care about the authenticity and the story behind the items they buy. Give them a connection to the brand by sharing the history and heritage, as well as the process for making goods.
• Engage with Technology: Because technology is an integral part of Millennials’ lives, it’s an integral component of their shopping experience. Millennials expect a seamless multi-channel shopping experience. They are driven by digital, and want to control and customize every phase of their shopping experience. Deepen the relationship and loyalty through social media and mobile technology.
ABOUT NIELSEN
Nielsen Holdings plc (NYSE: NLSN) is a global performance management
company that provides a comprehensive understanding of what consumers
watch and buy. Nielsen’s Watch segment provides media and advertising
clients with Total Audience measurement services for all devices on which
content — video, audio and text — is consumed. The Buy segment offers
consumer packaged goods manufacturers and retailers the industry’s only
global view of retail performance measurement. By integrating information
from its Watch and Buy segments and other data sources, Nielsen also
provides its clients with analytics that help improve performance. Nielsen,
an S&P 500 company, has operations in over 100 countries, covering more
than 90% of the world’s population.
For more information, visit www.nielsen.com.
Copyright © 2015 The Nielsen Company. All rights reserved. Nielsen and
the Nielsen logo are trademarks or registered trademarks of CZT/ACN
Trademarks, L.L.C. Other product and service names are trademarks or
registered trademarks of their respective companies.15/9231
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