U.K. and USA: What about consumer spending?
Millennials driving success of new retail models and shaping retail trends in U.S. and U.K.
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.
“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”
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.
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 (49 percent).
Millennials most ikely 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.
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.
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.