Millennials Prefer To Research Products Online, Make Purchases In Stores

Last year, Millennials passed Baby Boomers as the largest living generation in US history—these 19- through 34-year-olds have a great deal of buying power. And this is just the beginning, as the generation has yet to hit its prime spending years.

Millennials still value physical stores above online shopping—dispelling several myths regarding the generation's shopping preferences, CBRE reports in "Millennials: Myths And Realities." The report also looked at whether Millennials desire instant gratification and whether, because they are laden with debt, they're more partial to discounted products than really expensive ones. 

It's not merely how much Millennials spend or on what products they're spending money that's important for commercial real estate. The real disruption for the retail industry is how Millennials are spending.

According to CBRE research, Millennials' smartphones are the "nerve center for all interaction with products." Of the 13,000 Millennials surveyed in the US and throughout countries in Europe and Asia, the majority see themselves on the "cutting edge of technology." More specifically, 80% of those surveyed own a smartphone, and 45% own tablets.

Though most Millennials engage with retailers predominantly through their phones, what doesn't often make headlines is that e-commerce sales only represent around 11% of total retail sales, according to an eMarketer forecast. 

Millennials mostly use their smartphones to research products, compare prices and read reviews—with the majority of the generation still preferring to make purchases in stores, valuing the ability to see, touch and try out merchandise before purchasing. CBRE's research found UK-based Millennials are leading the way in e-commerce adoption, with more than half of those surveyed expecting to do more than half of their non-food shopping online come 2019. 

"Obviously you can see cultural differences regarding what percentage of their spending is online; there are some countries that spend more than 50% online, and then it goes down from there," CBRE's head of research in the Americas Spencer Levy (below) told Bisnow. "But I think the one key trend you’ll see is the disproportionate amount of spending on experiences versus goods."

One belief that turned out to be true is Millennials' is the idea that the generation is of the "I want it now" school of shopping. The preferable method of shopping is via brick-and-mortar. But when they do opt to shop online, the majority of those surveyed prefer to have their purchases delivered to their homes.  

As for those labeled "discount junkies," CBRE dispelled that myth. Millennials are aware of the value of their purchases and how much something should cost, with those surveyed spending 48% of their disposable income on leisure. Millennials have yet to reach that stage in life where they have a lot of disposable income, but as they age, the group is expected to continue using technology to research purchases before making an investment. 

 "I don’t think it's necessarily the case that Millennials like experience retail more than they like goods retail. I think part of it is due to the fact that since they are living at home they don't need the goods, but once they make a different lifestyle choice they’ll want goods more," Spencer said. "The key takeaway is it's not age that matters, it's life stage that matters."