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Millennials are being described as the “worry generation.”
And with a new coronavirus spreading across the U.S. and globally, and with the death toll rising, millennials — or those people born between 1981 and 1996 — are already changing their spending habits and preparing to shop differently more than any other age group in order to cope, according to a new survey.
“I am calling millennials the concerned generation … or worried,” Greg Petro, CEO of retail consulting agency First Insight, said in an interview. “Generally everyone is concerned about it, everyone believes there will be a financial impact. But millennials’ behavior is changing more dramatically than any other generation. They are going to cut their spending.”
Fifty-four percent of millennials say the new coronavirus has already significantly or somewhat impacted their purchase decisions, First Insight found in surveying 500 people on Feb. 28. That’s compared with 33% of baby boomers, 42% of Gen X, and 49% of Gen Z, it said.
Notably, the poll took place as stocks posted their worst losses since the 2008 financial crisis, but before anyone in the U.S. had died of COVID-19. At least 11 people have died in the U.S. from the outbreak.
Overall, 66% of people surveyed said they were either very or somewhat worried about the coronavirus. And a whopping 93% said they believe the outbreak will either somewhat or significantly impact the U.S. economy.
This includes changing where, and how, they shop. Forty-six percent of millennials said they either strongly agree or agree that the coronavirus is impacting how much they are going out in public. Thirty-nine percent said they are shopping less frequently in stores. And 30% of millennials said they are shopping more frequently, instead, online.
Analysts have already predicted the coronavirus could hit U.S. malls hard, as more people avoid crowded areas. Apparel retailer Abercrombie & Fitch said Wednesday the virus is expected to lower sales by as much as $50 million during its fiscal first quarter, and up to $80 million in 2020. Abercrombie reported net sales of $3.62 billion in the full year ended Feb. 1, 2020.
“We truly can’t be blind to [this]. We needed to put it into our outlook,” Abercrombie CFO Scott Lipesky said in an interview. People are not thinking about buying discretionary items right now, he said.
First Insight’s Petro said the life events that millennials have experienced might explain why they are more worried than others. Members of this generation were children when 9/11 happened. And many of them were trying to get jobs in 2008, in the midst of the Great Recession, he said. “The reality was you could not get a job.”
In turn, these consumers have been shopping in a different way from that of their parents, even before the new coronavirus started to spread. They are more conscious about where they are putting their money. They are more apt to buy used clothing, or rent clothes, for example.
When asked what they are stocking up on in preparation for a broader coronavirus outbreak, 30% of millennials said they are buying grocery items, 21% said household goods, 20% said health products, and 18% said they are looking for personal care.
Online grocery ordering service FreshDirect, for example, said it is already seeing a huge spike in transactions.
“We have seen a significant surge in FreshDirect orders from our existing customers, as well as a wave of new customers,” Chief Merchandising Officer Scott Crawford said in a statement Thursday. “Our data leads us to believe customers are preparing more meals at home, and are consuming more fresh and organic food to stay healthy.” Local apple sales have more than doubled, as one example, he said.
— CNBC’s Courtney Reagan contributed to this report.
Source: Business - cnbc.com
