You’d have to go back 74 years to observe similar living arrangements among today’s young women, according to the Pew Research Center.
Pew’s 11/10 analysis of US Census Bureau data shows a U-shaped curve with a record 36.4% of 18- to 34-year-old women still living with their first families (mom, dad, or other relatives) in 2014 compared to the previous record high of 36.2% back in 1940, and up from a record low of 20.0% during 1960. Men display a similar profile.
Their comparable percentage fell from a record 47.5% during 1940 to 28.0% in 1960 and rose to 42.8% during 2014.
Let’s consider the implications of so many young people still living with mom and dad:
- Huge young adult population. The Millennial generation, or those aged 15 to 33, now numbers 83.1 million, or more than a quarter of the nation’s population, according to the Census Bureau’s count. This implies that 33 million young adults are living at home, using Pew’s 40% share. That may be a slightly inflated estimate since the Millennial population includes 15- to 17-year-olds.
- All the comforts of home. In a follow-up 11/11 NYT article, the author of the Pew study said: “I don’t have any research to back it up, but one does hear that the social acceptance of living with your parents has increased.” After all, kids these days aren’t stupid. More of them are getting college degrees than the generations that preceded them. And it’s comfortable at home, especially if the cooking, cleaning, and laundry is done for you.
- Profile of Delayers. In theory, young adults who have mom and dad to foot the household bills should have lots of extra money to spend. However, reality bites. Lots of “Delayers” — as seems a fitting name — are enrolled in college and postponing life’s milestones such as forming their own households, getting married, and having children. Payments on student loans are sapping their spending power. They certainly aren’t buying homes, furnishing them, or populating them with babies. They may not even have the desire to get gussied-up to attract potential spouses. So they are buying fewer clothes and buying them online or at Old Navy.
- Not born to shop at department stores. Many young adults today probably don’t shop at department stores. Many clothing and non-apparel purchases are now done so conveniently online as with Amazon’s click-to-purchase and Prime shipping options. Further, digital shopping experiences provide the ability to easily comparison shop and be more budget conscious. Indeed, the y/y growth rate in retail sales for non-store retailers is up more than any other retail sales category, as noted above. So, while the big department stores may not be faring well, there are winners to be found in the retail space, especially those in the Internet space, as Jackie has discussed in previous weeks.
For what it’s worth, Melissa — the closest to being a Millennial on our team — says that she and her peers shop at places like Target, H&M, Forever 21, and Zappos, where the consumer goods are trendier and less expensive than the traditional department stores.
Target, for example, has caused shopping frenzies both in stores and online by offering designer brands at lower prices than traditional department stores, as noted in an April USA Today article. A quick search revealed a Lilly Pulitzer for Target dress might cost $40 whereas Nordstrom had versions costing upwards of $100-$300. Which do you think a Delayer would choose?
- Jeans and pizza. The Chief Development Officer of one trendy brand targeting youngsters, Urban Outfitters, is apparently a fan of Star Trek, pizza, and remaining competitive in the retail landscape with brick-and-mortar stores. How is this relevant? Well, the company recently bought a pizza chain in part because restaurants don't face competition from online shopping! “Urban Outfitters Chief Development Officer Dave Ziel told Philly.com that shoppers are increasingly spending their disposable income on food instead of retail,” according to a WSJ article on Monday. “Until they invent actual replicators like on Star Trek, e-commerce is not a threat to the restaurant business,” he told the website.
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