Shopping for Gen Y

Housing preferences

By Suzann D. Silverman on Jun 5, 2013 in News

As more of the 80 million-member Millennial generation enters the workforce, these so-called Gen Y-ers, age 18 to 35, are on everybody’s minds these days as one of the largest—and most fickle—groups to influence housing, shopping and the workplace. Financially strong and responsible, they nonetheless like to shop, prefer convenient housing over expansive, and while they are not yet the company decision makers, they certainly represent a growing proportion of the workforce—with a work style that is sometimes at polar opposites to their parents, the giant Baby Boomer generation.

The Urban Land Institute followed up last year’s study of Gen Y housing preferences with a new analysis of their retail habits, released during the Spring Meeting, which took place in San Diego in mid-May. The study identified a strong group, with even a good percentage of those in their 20s financially independent and earning a comfortable living. Sixty-five percent of the 1,251 respondents to the survey said they do not receive financial help from their parents, with 41 percent working full time and fully 46 percent achieving household income of $50,000 or more per year. Thirty-two percent own their own home (predominantly those in their 30s). They carry an average of $22,000 in student debt, but four of five said they don’t use credit cards and 27 percent pay their credit card bills in full every month.

Interestingly, while a large proportion live in or near cities, their orientation and long-term plan may be otherwise. Just 14 percent live in or near downtowns, but another 34 percent live in city neighborhoods outside the downtowns (think Brooklyn in New York City or Buckhead in Atlanta), while 13 percent live in dense older suburbs and 11 percent in newer, outlying suburbs; 19 percent in small cities or towns ; and 10 percent in rural communities. But when asked how they view themselves, 39 percent said they consider themselves to be city people, while 29 percent termed themselves suburbanites and 32 percent said they were small town or country people. Of those currently living in downtowns, 62 percent are male, 51 percent are age 18 to 25, 34 percent are Hispanic and 23 percent are black. Twenty percent of Northeastern Gen Yers live in downtowns, compared to 10 percent of those in the South. And they shop more frequently than those living elsewhere.

But overall, shopping is a popular pastime, according to study author Leanne Lachman. Eighty-five percent of respondents said they enjoy shopping, with eight of 10 men admitting to favoring this pastime. Overall, blacks and Hispanics turned in higher numbers than whites, with 89 percent of each group claiming a liking for shopping versus 83 percent of whites. Only 4 percent of the overall group said they hate shopping.

The group also favors shopping as a social outlet. Sixty-five percent said they typically shop with friends or family members; 28 percent view shopping centers as their favorite place to get together with friends. Seventy-five percent go out to the movies, and 46 percent eat out with family or friends at least once a week. Thus, while 45 percent spend at least an hour online each day exploring retail-oriented sites, bricks-and-mortar stores are still important. While they often use Web sites for research, many make their actual purchase in the store.

What does all this mean for shopping center owners and managers? According to Lachman and others who spoke at the ULI Spring Meeting, it’s important to introduce fresh stimuli into the centers. Provide a mix of venues that appeals to a range of interests, including entertainment, value, style and social gathering. Provide pop-up options where retailers can test new concepts, at the same time attracting shoppers’ attention. Consider what’s lacking in the community (there is a dearth of pet concepts in malls, for instance), but don’t be too quick to dismiss more traditional representation, such as department stores.

Suzann D. Silverman is editorial director of Commercial Property Executive. More on Gen Y, including their housing preferences and how they compare to the Baby Boomers, is available through “Real Estate Innovations: ULI Special Reports” on CPExecutive.com. The full report, “Generation Y: Shopping and Entertainment in the Digital Age,” is available through the Urban Land Institute.