If your Millennial offspring have stayed living at home pleading poverty, yet waste what ‘little’ they have on copious takeaway flat whites and smashed avocado, are you forgiven for being miffed? Kiwi consumer spending specialist Marketview managing director Stephen Bridle says yeah, nuh, maybe.
Millennial consumers in New Zealand have been labelled as big spenders, wasting their money on smashed avocado and takeaway coffee. And there’s more than a bit of truth to the epitaph.
In a report analysing spending behaviour by consumers aged 25-29, Marketview found that over the past eight years, these consumers have increased their spending by 56%, outstripping their growth in population.
Much of Millennial’s spending growth is due to a growing interest in eating out… whether it be cafes, restaurants, bars or fast food, Millennials really are dining out much more than previous generations.
With their preoccupation with convenience, takeaways are an increasingly popular purchase for this age group – our spending figures revealed that in 2017, Millennials spent more on takeaways than they did at clothing, footwear, health, beauty, pharmacy and cosmetic stores combined.
We also identified that Millennials have a strong preference for online shopping, with spending growth for nearly all online categories outstripping their bricks and mortar equivalents.
Figures show that since 2009, these consumers have more than tripled the amount they spend online, now allocating 10% of their spending budgets to online purchases. Popular online categories for Millennials are fashion, accommodation and, increasingly, groceries and food, encouraged by convenience and growing availability.
While many industries both on and offline are benefitting from Millennial money, figures from Marketview identified an emerging trend with potential to impact the wider retail landscape… younger consumers are increasingly spending their money outside the central cities.
In the past eight years, spending by Millennials in non-metro areas increased by more than 50%, while the CBDs of Auckland, Wellington and Christchurch combined only saw a 14% increase in spending from these consumers.
As young people increasingly turn to online options for their everyday shopping needs, the concept of the CBD and ‘High Street’ is becoming somewhat redundant, at least to Millennials. As they no longer need to head out to the shops in the city every weekend, Millennials are breathing life back into the ‘local village’, bringing business back to their communities as they go out for coffee, drinks and dinner in their local neighbourhoods – a phenomenon we are only seeing increase as this group grows.
Millennials are not to be underestimated in their spending power and ability to alter the retail environment. Retailers need to pay attention to the preferences and spending patterns of this generation if they want to profit from what is a highly valuable group of consumers, and not be left behind.