Summary: Data shows that millennials make up a significant portion of total spending at department stores. At Macy’s they’re outspending all other age groups by twice the dollar amount. Surprised? Read on for more…
Millennials are America’s largest generation, and an Accenture report puts millennial spending at about $600 billion per year. Millennials – who spend a significant amount of their time online – now make up a colossal portion of America’s retail expenditure.
This new generation of shoppers has left many wondering if department stores can keep up.
Our data says: Absolutely!
We looked at spending from our consumer panel at the leading department stores in America: Macy’s, Kohl’s, JCPenney, Marshalls, and Sears.
The demographic spending the most at department stores? Millennials between 25 – 34.
The future of retail
Millennials are outspending almost all other age groups at department stores.
However, a look at spend per customer at these stores indicates a new shopping trend. On average, millennials spent much less per transaction than any other age group.
As people age and generally acquire homes, children, and larger families, their shopping habits undergo a sea change. Millennials are entering these phases of their lives later than previous generations.
It will be an altogether different challenge for department stores to capture this group’s wallet share for pricier products like appliances (as Sears’ small spend per customer indicates!).
Millennials love Macy’s
One store that has captured millennials’ hearts?
At Macy's, this age group outspent all other consumer groups by almost twice the dollar amount. Millennials' spend-per-customer at Macy’s was also higher than any other store by a long shot: $214.17 to runner up Kohl’s $143.74
So how did Macy’s win over this coveted consumer?
Simple: Shopper insights and marketing!
A press release confirmed these efforts. The company is using lifestyle profiles to direct buying, and planning decisions.
Macy's has capitalized on millennials’ omnichannel shopping behaviors. Millennials tend to compare deals and prices online, but still desire in-store customer service experiences – they expect shopping experiences to be consistent across all channels.
Millennials’ spending power is projected to grow to 1.4 trillion dollars by 2020. As this group of consumers ages into family life it will be crucial for department stores to build brand loyalty. A commitment to providing seamless, omnichannel shopping experiences could be the key to success.
Conclusion: Despite many false alarms, the bell isn't quite tolling for department stores yet. Just ask Macy’s!
Learn more about consumer spending analytics with TXN.