The State of Consumer Spending: Millennials Driving Success of New Retail Models and Shaping Retail Trends in U.S. and U.K.
New First Insight Study Finds Millennials Using Subscription Boxes,
Flexing their Favorite Brands and Shopping In-Store/Online the Most
AMSTERDAM, Netherlands–(BUSINESS WIRE)–As Millennials gain a reputation for being category killers across
various industries, a recent study by First Insight, a global technology
company transforming how leading retailers make product investment,
pricing and marketing decisions found when considering new retail models
and shopping behavior, Millennials are currently using subscription box
services the most with more planning to subscribe in the coming year
than other generations. Further, Millennials are the most likely
generation to “flex”, or display brands to show a personal association
with the brand, across every brand category in both the U.S. and U.K.
The State of Consumer Spending: Millennials Flexing their Retail Market
Influence in U.S. and U.K. study
points to the growing power of Millennial shoppers, as their behavior
contributes to the success and longevity of several retail models
internationally more than other generations. According to the study,
Millennials also are currently the biggest spenders both in-store and
online and are the most likely to add additional items to their carts
than other generations. The results were based on a recent study of
consumers on shopping habits, purchase behavior and influences driving
decisions in the U.S. and U.K. Millennials are defined as those born
between 1981 and 2000.
“Millennials continue to be the dominant force in retail both in the
U.S. and the United Kingdom, as their shopping habits can be a deciding
factor in what makes or breaks the success and longevity of retail
models,” said Greg Petro, CEO of First Insight. “Our study found that
where Millennials shop, how they shop and when they wear the brands they
love are in close alignment with how they define themselves. Retailers
must be able to connect with this generation through the right shopping
experiences and unique products if they want to capture the attention of
this important generation of shoppers.”
The results were announced today during the World Retail Congress in
Amsterdam. Download the report and accompanying infographic to see all
the key findings from the study here.
Key findings include:
Millennials Big Spenders in the U.S. and U.K.
According to the study, Millennials in both the U.S. (74 percent) as
well as the U.K. (58 percent) were most likely to spend more than
$50/50£ per visit in-store as well as online. This compares to 71
percent of Generation X and 65 percent of Baby Boomers in the U.S., and
42 percent of Generation X and 38 percent of Baby Boomers in the U.K.
Similarly, Millennials in the U.K. are also spending more than other
generations online, as 50 percent of those surveyed spend more than 50£
per visit, compared to 47 percent of Generation X and 33 percent of Baby
Boomers. In the U.S., Generation X shoppers are most likely to spend
more than $50 when shopping online (59 percent), more than half of
Millennials (54 percent) are spending as much, followed by Baby Boomers
Millennials Most Likely Impulse Shop in Both U.S. and U.K.
In both the U.S. and U.K., by generation, Millennials have the highest
added-to-cart percentage rates in-store and online. In the U.S., 87
percent of Millennials said they sometimes or always add items to their
carts they weren’t planning to buy when shopping in-store. This compares
to 86 percent and 78 percent of Generation X and Baby Boomer
respondents, respectively. U.K. respondents mirrored these responses
closely, as 83 percent of Millennials said the same, followed by 76
percent of Generation X and 69 percent of Baby Boomers.
When shopping online, U.K. Millennials are more likely to sometimes or
always add items to their carts (83 percent) compared to the U.S. (78
percent). However, Millennials both in the U.S. and U.K. far outpace
other generations in their respective country. In the U.K., 69 percent
of Generation X and 52 percent of Baby Boomers surveyed said they add
items to their cart when shopping online. In the U.S., 74 percent of
Generation X and 53 percent of Baby Boomers said the same.
Millennials Biggest Users of Subscription Box Services in U.S., and
U.K., but Far Fewer Respondents Overall Plan to Subscribe in U.K.
Data around usage of subscription box services is similar when comparing
the U.S. to the U.K., driven primarily by Millennial adoption.
Twenty-five percent of respondents in the U.S. and 23 percent of the
respondents in the U.K. currently subscribe to subscription boxes. This
is driven primarily by Millennials in both countries, as 31 percent of
Millennials currently subscribe to subscription boxes in the U.S. versus
21 percent and 8 percent of Generation X and Baby Boomers, respectively.
In the U.K., 32 percent of Millennials versus 22 percent of Generation X
and 10 percent of Baby Boomers are currently subscribers.
However, when considering longevity of the subscription box model, data
reflects a significant difference between U.K. and U.S. shoppers. While
in the U.S., overall 32 percent of study participants intend to
subscribe in the next six months, only 13 percent of U.K. respondents
said the same. When looking at generational breakdowns, 38 percent of
Millennials, 28 percent of Generation X and 22 percent of Baby Boomers
in the U.S. plan to subscribe in the next six months. This is
significantly more than U.K. respondents, where only 18 percent of
Millennials, 9 percent of Generation X and 8 percent of Baby Boomers
plan to subscribe.
Both U.S. and U.K. Shoppers Prefer to Flex Sports Brands Over Luxury
Brands, with Millennials Flexing Most Often
The study also examined which types of brands are being “flexed” most.
Flexing is to wear or display brands to show a personal association with
the brand. This can be done to display wealth or status to make a
statement. While the assumption may be that most consumers prefer to
personally associate with luxury brands, the study found that sports
brands are actually the most popular in both the U.S. and U.K., with
Millennials the most likely to flex all brands across every category.
In both U.S. and U.K., an average of 23 percent and 24 percent percent
of study respondents overall said they are flexing sports brands, versus
19 percent in the U.S. and 23 percent in the U.K. saying the same for
heritage brands. By comparison, an average of only 17 percent of U.S.
respondents and 21 percent of U.K. respondents flex luxury brands.
The generation most likely to flex luxury brands is Millennials in both
the U.S. (19 percent) and the U.K. (22 percent), they were significantly
more likely to flex sports brands (26 percent in the US and 27 percent
in the U.K.). Further, heritage brands were also more popular with
Millennials, as 21 percent of Millennials in the U.S. and 25 percent of
Millennials in the U.K. reported flexing these brands.
First Insight’s findings are based on the results of a U.S. consumer
study of a targeted sample of more than 1,000 respondents fielded in
February 2019, and a similar study of 565 respondents in the U.K.
fielded in April 2019. The study was completed through proprietary
sample sources among panels who participate in online surveys.
About First Insight, Inc.
First Insight is the world’s leading customer-centric merchandising
platform that empowers retailers and brands to incorporate the Voice of
the Customer into the design, pricing, planning, and marketing of new
products. Through the use of online consumer engagement, the First
Insight solution gathers real-time consumer data and applies predictive
analytic models to create actionable insights, which drive measurable
value. Retailers, manufacturers and brands use the First Insight
solution to design, select, price, plan and market the most profitable
new products for reduced markdown rates and improved sales, margins and
inventory turnover. Customers include some of world’s leading vertically
integrated brands, sporting goods companies, department stores, mass
merchant retailers and wholesalers. For further information, please
SVP of Marketing
Berns Communications Group, LLC
Berns/Michael McMullan, 212-994-4660
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