X market's the spot - Generation X consumers spend more disposable income at retail

Discount Store News, April 3, 1995

At 46 million individuals, the 18- to 29-year-old Generation X is half the size of the Baby Boomer group. Gen X is roughly equal in number to the Depression-era or Empty Nester generation, but commands far less disposable income. Xers are of a more diverse composition than their elders: 70% non-Hispanic white and 30% minority.

Less numerous, less affluent, less focused. So why bother marketing to them?

With retailing more competitive than ever, merchants that take pains to generate loyalty within this group today will benefit in the years ahead. Xers have a major impact on certain product categories, such as consumer electronics, apparel, children's goods and home furnishings. Somewhat resistant to national brands, this group also represents a fertile market for new suppliers, while traditional vendors face a challenge to create new products and new images if they are to make an impact and maintain market share.

Xers are just as comfortable shopping various tiers of retailing as their forbears. The starkest differences come in the destinations they select for specific merchandise categories.

Research conducted for DSN by Leo J. Shapiro & Assoc., Chicago, has revealed that over half the Xers make discount stores a destination when shopping for consumer electronics. CE was the fifth-ranked category at discount stores among Xers - but CE was a no-show in the top 10 categories of the other two age groups.

Conversely, five categories appeared in the top 10 for Boomers and Empty Nesters that were absent from the Xers' leading discount store shopping categories. These included: cosmetics (ranked 8th by Boomers and 3rd by Empty Nesters), lawn & garden (5th by Empty Nesters), stationery (6th by Empty Nesters), blank videotape (10th by Boomers) and women's apparel (10th by Empty Nesters).

Another Xer difference lies in the gap in shopping habits between the haves and have-nots: Across most types of stores, it is most narrow in the Xer group, i.e., modest-income Xers spend almost as much as higher-income twentysomethings. The gap in spending between the well-off and just-getting-by widens among Boomer households, and is widest with Empty Nesters.

Optimism, desire to be in fashion and having fewer or no dependents are key factors in this willingness to spend at retail by Xer households with a less than $30,000 annual income.

Discounters have yet to connect fashion-wise with the Xer woman. Whether of modest or affluent income, she is more likely than her elders to shop women's full price apparel specialty stores, making 17 visits per year on average, compared to 13 trips for women in the older groups. The Xer woman is seen less frequently than the Boomer or Empty Nester woman at manufacturer outlet stores. This may indicate less bran identification by the Xer.

The Xer man emerges a a more well-rounded shopper. He makes at least as many trips as his elders to manufacturer outlets. He also makes 50% more trip to toy stores than the Xer woman.

Top Draws for `Xers'

% of consumers under 30 who shopped at discount stores in the past year for:

% of Category shoppers

Household Cleaners 63.3% Film 58.3 Toiletries 57.3 Greeting Cards 56.7 Consumer Electronics 55.7 Automotive Supplies 55.4 Domestics 54.1 Hardware 53.3 Soda and Soft Drinks 52.8 Sporting Goods 51.4