Consumers rarely stay in the same frame of mind for long, and they often change in surprising, unexpected ways. So while the pre-recession shopper might have made aspirational luxury purchases such as Louis Vuitton luggage or a Chanel handbag to infer social status, more recently consumers have exhibited, as often reported in these pages, more frugal approaches to shopping. They have become dollar store denizens, they’ve avoided unnecessary credit card debt, and have shown a marked preference for the intangible over the tangible. We’re calling this new type of consumer the post-aspirational shopper.
Millennials are quintessential post-aspirationals, and one way their shopping habits play out is in their favorite place, the home. In fact, we’ll take it a step further and say that their very favorite place is the kitchen…particularly the well-equipped kitchen. Retailers like Pirch have gotten a jump on this trend.
Given the prevailing conventional wisdom, it may come as a surprise that millennials aren’t always thrifty. Indeed, there’s evidence to the contrary. Checkout TrackingSM data from a recent study shows that millennials will spend more than twice as much per order when shopping online in the home/kitchen category than in brick-and-mortar stores. This gap grows even wider when analyzing the spend of older millennials (the 25-to 34-year-olds) vs. the younger ones (18-to 24-year-olds), where an average in-store spend of around $19 on home and kitchen items jumps to $46 online for younger millennials and a whopping $54 for older ones.
Another attribute of post-aspirational shopping behavior is the rise of the “signature item.” Such items are best thought of as an attempt by a consumer to stand out in a personally significant and unique manner. This could very well be coming from the same psychological trait as the aspirational LV luggage mentioned earlier, only it’s a much more down-to-earth and practical bit of spending. And the place where these signature items are gaining traction as much among baby boomers as among millennials is—you guessed it—the home, and especially the kitchen. Millennials long for experiences, and boomers want to maintain connections as they age. The home is the common ground for both these generational trends. Home cooking, home entertaining, and home décor are extraordinarily important to both millennials and boomers.
Holidays, of course, are the prime time for gathering and bonding over food and its presentation. Retailers should be aware that, according to Checkout Tracking, which looks at consumer purchases at the receipt level across demographics, home and kitchen holiday online purchases are concentrated during Black Friday weekend. Retailers seeking to gain market share of such purchases among millennials and boomers will want to focus their efforts on those time periods.
“Cooking” at Home, vs Eating Out
Perhaps the biggest single opportunity in the “signature item at home” world involves selling conversation-starting small appliances such as high-end coffee makers and pressure cookers, to millennials. Our Checkout Tracking data shows that consumers between the ages of 25 and 34 contributed 61 percent of U.S. small appliance dollar sales gains in 2015. It’s no wonder millennials can’t save up for or afford down payments on homes—they have to have the best of everything now, rather than waiting and saving for a grander future.
To this end, when it comes to what constitutes eating at home versus dining out, the lines become somewhat blurred. We’ve noticed a trend of “home meals” that consists of bringing prepared meals home to serve with fabulous kitchenware—pointing to some excellent retail opportunities. In our “2016 Eating Patterns in America” study, data analysis shows that even when consumers do prepare food at home, more than 11 percent of in-home dinners are built around an entrée that came from outside foodservice. In addition, digital ordering, which is an order via the internet or a mobile app for either delivery or pick-up, accounts for 3 percent of total restaurant traffic, or about 1.9 billion visits. And 50 percent of digital orders come at dinnertime, and 35 percent of digital ordering includes parties with kids. Additionally, 50 percent of dinner meals purchased at a restaurant are taken home to eat.
The larger opportunity is clearly in serving millennials who dedicate a much higher share of spend to foodservice than do other demographic groups, even though they account for 200 million fewer restaurant visits than the same age group roughly a decade ago.
In terms of food consumption, the well-equipped kitchen will feature ways to prepare (or at least reheat) and serve meals in beautiful, unique ways that the post-aspirational consumer is prepared to pay for. The message we have for retailers is to make sure home and kitchenware, including food, are beautifully presented. Try to offer the most unique, well-merchandised products and settings, and make sure it’s available online—or in any other channel, the shopper may want to look for it. With the right data, it’s easy as pie!