Generation Y:Retail Trendsetters

Generation Y:Retail Trendsetters

M. Leanne LachmanLachman Associates

May 16, 2013

Great Retail NewsGreat Retail News

37% of Gen Y loves to shop

48% enjoys shopping

12% say it’s a chore they can handle

4% hates shopping

Totals may not add to 100% because of rounding

Source: ULI/Lachman Associates Survey, January 2013

Challenging CorollariesChallenging Corollaries

• 18- to 35-year-olds are easily bored

• Sensory experiences need to evolve frequently

• 45% spend >1 hour/day on retail web sites

• Comfortable with multi-channel shopping

Who is Gen Y?Who is Gen Y?

Source: U.S. Census Bureau, 2010

Silent Generation

Depression & War Babies

Baby Boom

Gen X

Gen Y

Gen Next

ULI’s Gen Y Retail SurveyULI’s Gen Y Retail Survey

• Nationally representative sample:

– By age – 18- to 35-year-olds

– By race/ethnicity

– By four U.S. regions

• Confidence level of + 3%

n=1251 responsesConducted by Harris Interactive Service Bureau/Lachman Associates

Gen Y ProfileGen Y Profile

Age Marital Status18-25 45% Single 64%

26-30 27% Divorced/Widowed 2%

31-35 28% Married/Partnered 34%

Race Living w/Children <18 37%

White 74%

Black 16% Car Ownership 76%

Other 10%

Hispanic 20%

Source: ULI/Lachman Associates Survey, January 2013

Gen Y’s PetsGen Y’s Pets

Pet Owners 71.5%

Dog(s) 53%

Cat(s) 35%

No Pets 28.5%

n=1251Source: ULI/Lachman Associates Survey, January 2013

Gen-Yers’ Household IncomeGen-Yers’ Household Income

23%

14%

17%

22%

12%

12%

Under $25,000$25,000‐$34,999$35,000‐$49,999$50,000‐$74,999$75,000‐$99,999$100,000+

n=1166Source: ULI/Lachman Associates Survey, January 2013

Current Gen Y HousingCurrent Gen Y Housing

Owners

Live withParents/Relatives

Student Housing

Renters

Other

37%

24%

32%

2%

5%

Source: ULI/Lachman Associates Survey, January 2013, n= 1251

Gen Y EmploymentGen Y Employment

Source: ULI/Lachman Associates Survey, January 2013

Gen Y’s Self CharacterizationGen Y’s Self Characterization

I consider myself:0% 10% 20% 30% 40% 50%

City Person

Suburbanite

Small Town/Rural Person

n=1251Source: ULI/Lachman Associates Survey, January 2013.

Gen Y “Downtowners”Gen Y “Downtowners”• Only 14% of sample:

– 24% of Northeasterners vs. 16% for rest– 28% of Southerners vs. 39% for rest

• 64% male vs. 47% for rest• 51% age 18-25 vs. 44% for rest• 34% Hispanic vs. 18% for rest• 23% Black vs. 15% for rest

Gen Y’s fashionistas

“How can we know who we are whenthe best marketing consultants

of our time don’t know.”

Shopping Center PatronageShopping Center Patronage

Totals may not add to 100% because of roundingSource: ULI/Lachman Associates Survey, January 2013

At LeastWeekly

Few Times/Monthly

Rarely/Never

Neighborhood/Community SCs 21% 53% 26%

Enclosed Malls 14% 50% 36%

Power Centers 12% 51% 38%

Neighborhood Bus. District 13% 41% 46%

Central Business District 12% 36% 53%

Store PatronageStore Patronage

Totals may not add to 100% because of roundingSource: ULI/Lachman Associates Survey, January 2013

At LeastWeekly

Few Times/Monthly

Rarely/Never

Discount Dept. Store/Warehouse Club 31% 60% 10%

Full-Line Dept. Store 12% 52% 35%Apparel-Oriented Dept. Store 5% 32% 62%

Chain Apparel Store 9% 49% 43%

Typical Way to Shop for ClothesTypical Way to Shop for Clothes

Source: ULI/Lachman Associates Survey, January 2013

With Family Members 37%

With Friends 28%

Alone 35%

Non-Perishable Grocery ShoppingNon-Perishable Grocery Shopping

Respondents could identify up to 3 venuesSource: ULI/Lachman Associates Survey, January 2013

Discount Dept. Store w/Food Section 63%

Supermarket 56%

Warehouse Club 23%

Discount Supermarket 20%

Small Grocer 17%

Drug Store 5%

Online 1%

“Next time we’re shopping at Wal-Mart.”

Fresh Grocery ShoppingFresh Grocery Shopping

Respondents could identify up to 3 venuesSource: ULI/Lachman Associates Survey, January 2013

Supermarket 61%

Discount Dept. Store w/Food Section 49%

Specialty Grocer 18%

Small Grocer 17%

Warehouse Club 16%

Green Grocer/Farmer’s Market 16%

Daily Time on Retail-Oriented Web SitesDaily Time on Retail-Oriented Web Sites

Source: ULI/Lachman Associates Survey, January 2013

Men Women Total

<1 Hour 52% 58% 55%

1-2 Hours 28% 29% 28%

2-3 Hours 12% 9% 11%

>3 Hours 8% 4% 6%

100% 100% 100%

Gen Y’s Online ShoppingGen Y’s Online Shopping

Electronics/Computer Equipment 44%

Women 34%

Men 54%

Gifts 43%

Personal Clothing 41%

Women 47%

Men 36%

Books 39%

CDs/DVDs 33%

Items purchased online in prior six months; multiple responses permittedSource: ULI/Lachman Associates Survey, January 2013

Logistics/Warehouse DemandLogistics/Warehouse Demand• Fed Ex, UPS, USPS = big winners

• On-going need for cross-docked warehouses

• New demand for pick-and-pack facilities

• Retailers/malls encourage pick up/returns

• Promised delivery times are shrinking

Frequency of Dining OutFrequency of Dining Out

Source: ULI/Lachman Associates Survey, January 2013

At Least Weekly

Few Timesa Month

Rarely/Never

Breakfast 22% 16% 62%

Lunch 36% 35% 29%

Dinner 38% 42% 20%

Weekend Brunch 16% 17% 67%

Favorite Gathering Places with FriendsFavorite Gathering Places with Friends

Respondents could identify up to 3 venuesSource: ULI/Lachman Associates Survey, January 2013

Home: Mine or Theirs 66%

Restaurant 59%

Bar 30%

Shopping Center 28%

Coffee Shop 22%

Park/Beach 20%

Real Estate ImplicationsReal Estate Implications• Huge logistics/warehouse demand• Discount department stores/warehouse clubs

popular• Strong enclosed mall appeal

– Encourage social gathering– Keep shopping experience fresh

• Restaurants are hot – but Gen Y is fickle• Online sales eroding brick-and-mortar need• Underserved communities deserve attention• Density and walkability attract Gen Y

“And I think I speak for an entire generation when I remind my opponent that that was

then and this is now.”

Generation Y:Retail Trendsetters

Generation Y:Retail Trendsetters

M. Leanne LachmanLachman Associates

May 16, 2013