Sep 23 2020
For better and for worse, young consumers’ shopping has shifted drastically during 2020. YPulse’s Retail’s New Reality trend report dug into all the ways that it’s changed, but found that The desire for shopping is strong, and retail is perhaps more emotionally charged than it has been in Gen Z and Millennials’ lifetimes. Now, our latest shopping and retail report has even more stats on young consumers reshaped buying habits and preferences—including these five somewhat surprising insights:
Nearly two in five have been shopping more during the COVID-19 crisis to boost their spirits.
That’s right. While what they’re spending on has shifted significantly (hello comfort clothes, goodbye office attire) many young consumers tell us they’ve actually been shopping more than they used to, because they’re looking for mood boosters during this time. We’ve dug into the emotions driving their shopping habits right now, and found that over two in five also say that they have bought something to boost their moods during this time—something that we predicted would be the case when we said the Treat Yo-self mentality would be accelerated by COVID. With a recession mentality baked into them at a young age, spending on things they don’t need can still feel “wrong”—so they’ve looking for a reason and rebranded retail as self-care. Meanwhile, retail sales are continuing to grow globally. The Sourcing Journal reports that retail sales have risen steadily for four months across the U.K., China, and the U.S. In the States, retail sales rose 0.6% in August, and were up 2.6% compared to last year—representing the “fourth straight gain in retail sales since April,” when the pandemic first started. With the holidays coming up, retailers are expecting online retail sales to surge as young shoppers plan to do most of their shopping from the comfort of their own homes this year. Which brings us to…
Over half now prefer to shop online over in a physical store.
Pre-COVID, the majority of young consumers preferred shopping in-store over online, with 45% saying they preferred to shop online in 2019. But now that in-store visits have been limited, young consumers’ preference has shifted in the opposite direction for the first time—revealing a monumental shift in how consumers want to shop going forward. Over half now tell us they prefer shopping online. Millennials are more likely than Gen Z to have online shopping preferences, with 55% of 18-24-year-olds and 56% of 25-39-year-olds saying they would rather shop online than in a physical store. Interestingly, feeling unsafe about shopping in person is not the driving force they name. Instead, 66% of those who say they prefer online shopping say that online shops being open 24/7 is the reason, while 53% say it’s because they can online shop from anywhere. Only 24% say it’s because they don’t feel safe shopping in-person.
Over one in five Millennials 21+ have online shopped while intoxicated.
With all that online shopping going on, some of it is bound to take place after a drink or two has been imbibed—and 22% of 21-39-year-olds confess that they have indeed online shopped while intoxicated. Older Millennials are the most likely to have done so, with 28% of 35-39-year-olds saying they’ve done some drunk online shopping. Chain Store Age calls drunk shopping “a billion dollar habit” with a survey by Finder reporting that consumers in the U.S. spent $44.9 billion on drunk purchases in the last year. Though their estimates are higher than our data found, they also say that Millennials are the generation most prone to intoxicated purchasing. Interestingly, drinking and shopping might have appeal for young consumers in-store as well: our shopping report found that 43% say they are interested in being able to drink alcohol while they shop after the threat of COVID-19 has passed.
Half have used or are interested in using “buy now, pay later” services.
Payment solutions have big appeal to young shoppers during a time of economic uncertainty: 22% of 13-39-year-olds say they have used a “buy now, pay later” or payment installment service (e.g. Afterpay, Klarna, etc.) and 29% say they haven’t but are interested in using them. Our data shows that 25-39-year-olds are the most likely to use these services, with 28% of this group saying they have used “buy now, pay later” to shop, versus 17% of 18-24-year-olds. But while older Millennials are the most likely to already be using them, 18-24-year-olds are the most interested, with 38% of this group saying they haven’t but are interested. A desire to avoid credit card debt is one reason these services are appealing. Afterpay’s research discovered that only 41% of Millennials use a credit card, and the number is even less for Gen Z. With finances unclear and budgets tighter for many young people right now, “buy now, pay later” solutions could play a key role in retail going forward—especially for the holiday season.
Over half would now rather spend their money on products over experiences.
Just as we saw the preference for where they want to shop shift, we’ve seen a major change in what young consumers prefer to spend on right now. For years, Gen Z and Millennials have preferred spending on experiences over products. But suddenly, with so many experiences cancelled or on hold, the majority say they prefer to spend on products for the first time. Currently, 53% say they would prefer to spend on products over experiences, versus 32% in 2019—a huge increase. For two generations that have flummoxed multiple industries with their spending preferences, this is a significant shift. While their spending on experiences is on hold, an enormous opportunity for many brands has been created. They are looking for their entertainment, and emotional boosts, via products, and they’ve never been more open to spending on physical items.
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