The Collegiate Consumer: Millennials Take Over
Record on-campus spending presents opportunities for schools and retailers
by Frank White, Director Retail Services
The higher education retail market is unique. Nowhere else is there such a large, captive, key demographic. Today’s college students have four times the spending power their parents had, even after adjusting for inflation. Institutions of higher learning and national retailers are working hard to capitalize. This blog post begins an ongoing dialogue exploring the spending habits of today’s millennial college student, and the consumer-side opportunity they present to higher education and retailers.
Enter the Millennials
Generation Y, also branded “Millennials,” are those Americans born between 1978 and 2000. Their spending power currently is at $211 billion and they will become the segment with the highest collective income in 2017. Nearly 100% of this cohort will reach college age by that date, with a majority of the demographic already there in 2011.
Gen Y is the most socially engaged, brand savvy, and marketing-averse segment in U.S. history. They rebel against broad-sided marketing, while preferring choice, immediacy, and personal identification with brands. And they represent a perfect opportunity for campus services to reinvent themselves.
Millennials are loyal to brands that take care of them. Since the campus has so many services often tied to a central campus debit card, a merged service store similar to the Exchange on military bases, is a real opportunity to consolidate labor and services in a central location. Larger campuses could use this hub as a service center, as Ohio University does with its Central Food Facility.
Bookstore/ food service fusion
The college store has undergone a dramatic change the last 10 years, right along with the book industry as a whole, and the change has been driven by an evolving collegiate consumer.
One Davis Wince client, a community college branch campus in upstate New York, does not have on-campus food service capabilities. But the school administration nonetheless understands how critically important these services are to their largely non-traditional, commuting students.
The college store has a standing order for fresh pizza, subs and salads from the top local deli to support the students and staff. The deli already does local delivery and stocks the product, so this is a win-win arrangement. The store will also take special orders and manage the whole process. To help the students in these difficult financial times, there is no markup on the food, but the store does offer the high-margin drinks and chips, plus the food service keeps traffic moving in the store.
This store has won the holy grail of retailing: consumer loyalty. True, we’re not talking about a sexy retail brand or iconic restaurant chain, but the concept demonstrates how important customer-centric service has become to colleges and universities.
The “college store” opportunity
College bookstores are being rebranded as “college stores,” – outlets for services beside the traditional hard- and softgoods merchandise offered in the past. Where a store used to have an attached convenience store, the new generation concept will be a convenience center that distributes media and name-brand merchandise, offers event space, provides technical support, and perhaps a business center.
To take advantage of the media preferences of the Gen Y consumer, social media is replacing traditional advertising to market the college store currently and more so in the future.
Beyond the “college store”
So how can colleges and universities work with local and national retail brands in mutually profitable partnerships? Davis Wince sees a number of possibilities, which we’ll share in our next blog post coming soon!
Davis Wince’s project portfolio includes campus retail, dining and resident life facilities, Big box and specialty retail such as DSW and Mellow Mushroom Pizza Bakers. If you would like to learn more, or would like to comment on campus retailing, please contact Frank White, Director of Retail Services a fwhite@daviwince.com. Frank has been consulting internationally to the higher education and general retail markets for 30 years.
