This is a continuation of my post from Wednesday.
How important is understanding this evolving segmentation between older and younger Millennials?
Overall, I think it’s more important to think about shifting our consumer stock exposure away from Baby Boomers and toward Millennials. On the other hand, this potential change in portfolio structure is probably already much better understood than the finer point of distinguishing between older and younger Millennials. So the latter may have equal outperformance-creating power.
In what follows, I’m relying on a recent NPD study that you can send for on the NPD website.
1. Overall spending
Both older and younger Millennials do a larger amount of their spending online than the rest of the population.
Older Millennials tend to belong to loyalty clubs and often use retailer apps on their phones. Younger Millennials, not so much.
Older Millennials buy more kids’ stuff and have more home-related expenses. This makes sense, since they are in the household formation stage of their lives . Younger Millennials are attracted to experiences rather than things–they do more and buy less.
Older Millennials like to cook; younger ones don’t. Both groups want healthy, filling food, but younger Millennials like the convenience of eating out.
Both groups use wholesale clubs more than supermarkets.
3. Department stores vs. specialty retail
Overall, Millennials spend more of their income in department stores than the rest of the population.
Among specialty apparel retailers, younger Millennials like Hollister and Charlotte Russe the best. Older Millennials prefer Zara and Old Navy.
4. Beauty products
Millennials spend more on this category than the overall population. Both older and younger do about half their spending in this category in a combination of Wal-Mart, Target and Costco–a larger percentage than the population in general.
5. Younger Millennials are very interested in health in fitness. Not so their older counterparts. YMs like REI and Nike.
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