According to a survey by TD Bank, the Millennial generation led in “major purchases” in 2019 and responded as most likely to make similar, large-ticket purchases in the next six months. On average, Millennials told TD Bank they had made four major purchases in the last year. In contrast, Generation X and Baby Boomers combined averaged 2.8 major purchases during that time.
“Retailers should take notice, as Millennial purchasing habits are driving the retail world,” said Mike Rittler, general manager of retail card services, personal lending and business development at TD Bank. “The myth that Millennials aren’t out there putting money into the economy is just that: a myth.”
However, while Millennials are ready to spend, survey data showed that Millennials are also “extremely thoughtful” when making major purchases. On average, Millennials reported they will spend 4.4 hours researching a major purchase, more than other generations. Additionally, Millennials reported to being more likely to research financing options and financing in-store than older generations.
“Millennials are a discerning and price-conscious set of consumers, and while it may not be easy to earn their business, retailers should take notice,” said Rittler. “Improve the customer experience, focus on digital sales options and incorporate strategies and programs geared toward engaging with Millennial shoppers. Millennials are letting their wallets do the talking and successful retailers will conform to how this segment wants to shop.”
Millennials are also the most active users of store cards, averaging 3.1 uses per month. In comparison, Gen X averages 1.8 uses per month and Boomers average 1.3 uses per month. Further, TD Bank found that those consumers satisfied with retail cards spend more on average than non-engaged customers, with nearly $700 more being spent on average for a major purchase than those without a card.
Retailers are also finding loyalty from consumers through enticing membership programs. Sixty-nine percent of all consumers reported being members of a retailer loyalty program citing that “cash back and discounts are the most appealing and useful rewards.” And more than half of respondents said they often choose the same brand when making a major purchase.
As consumers’ shopping habits evolve and the factors that drive customer loyalty change, it’s important that retailers work with partners who will help them analyze data and behaviors to create new programs that cater to their customer bases across generations, preferences and levels of income,” Rittler said.
TD Bank’s biannual survey focused specifically on purchases of $500 or more. Since 2017, average major purchases saw an increase of $245 per purchase with the average price of a major purchase rising to $1,884 in 2019.
For More WWD Business News: