Monthly visits to retail real estate
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Day after day people flock to their town plazas and local shopping centers to purchase the goods and services they want and need. This can be anything from the weekly grocery trip to apparel shopping to a haircut – and more extravagant purchases, too. Consumption can be somewhat routine, much of it necessary, but what does a month in the life of a consumer really look like?
We studied the shopping and service habits of consumers over a period of 36 months and here’s what we found. On average, consumers visit their local mall 1.7 times, open-air centers 4.4 times and freestanding establishments 16.4 times each month. Those visits result in significant spending that averages approximately $250, $600 and $600, respectively, over the course of the month. We also broke the patterns down by generations and some of the results may surprise you.
Millennials
Millennials, the oldest of whom are in their mid- to late-30s, are more inclined to spend on experience than other generations. Heavily influenced by the Great Recession in 2008 and starting families later, they are less focused on tangible goods and more focused on creating memories. That means eating out, going to the movies, seeing live music, or shows, and other experiences take priority.
With a median income of $69,000 per year, Millennials are spending roughly 25 percent more of their discretionary income on services, dining and entertainment than on goods ($532.54 versus $427.35). In fact, 40 percent of their trips to the mall result in spending on dining and 27 percent of the trips on entertainment. When looking at their spending in relation to median income, nearly 10 percent is spent on experience.
On average, Millennials visit malls, open-air centers and freestanding establishments 2.0, 4.8, and 19.4 times per month, respectively. This is significant as they frequent physical locations more than any other generation. They visit over five stores each visit to the mall and spend money at about half the stores.
Gen X
Gen X are the big spenders: Despite being the smallest generation, they are the highest median wage earners ($85,000 per year), hold the largest spending power, and have an average household size of 3.2 people. Gen X is more likely than Millennials to have families, and their spending reflects that: they’re buying groceries, clothes, household wares, and other goods that a family might need far more than experiences or dining.
Gen X visits the mall an average of 1.7 times per month. As parents of much of the Gen Z generation, the visits likely include their children (95 percent of whom visit the mall every month). During these trips the majority of the money spent is on goods at an average rate of $174.71 per month. This is the most of any demographic.
With a family to feed, this demographic spends the most of any group on groceries, nearly $600 a month – more than 8 percent of their monthly income. Of the average 5.2 times a month Gen X visits an open-air center, 41 percent of the time they are grocery shopping and 44 percent of the time they are making a quick stop at the grocery store to pick up a handful of items.
Baby Boomers
The generation of Post World War II babies, the Baby Boomers, may be heading toward retirement but are still active contributors to the economy. With a median income of $77,600 a year, this generation is aging out of their prime consumption years and shifting their focus from spending on their children to spending on themselves.
As many begin to leave the workforce and become “empty nesters,” they may take fewer trips each month to malls and shopping centers, but physical stores remain a key a part of their monthly shopping experience.
Baby Boomers visits to open-air and freestanding retail/service establishments result in nearly as much dining out as Millennials (29 percent and 37 percent of visits respectively). And, they still spend time and money at the grocery store, 43 percent of their visits to open-air centers being specifically for grocery shopping. On average they spend $511.76 per month on groceries.
The Future
Finally, the future ultimately depends on the demands of Gen Z, the oldest of whom are just beginning to graduate from college. As the first digitally native generation, they also crave social interaction. In fact, our study shows they frequently visit the mall (95 percent made and average of 8.6 visits in a three-month period). Most importantly, they don’t see physical stores going away in the next five years. Gen Z is likely to continue the trend of shopping in-store just as the generations before them have done.