segmenting the Millennial market

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.

2.  Eating

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.

 

 

One response

  1. Pingback: What stocks to invest in = segmenting the Millennial market « PRACTICAL STOCK INVESTING | Stock Investing

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: