Gen Y’s Secret Retail Guilty Pleasure

Millennials love all things artisanal, hand-crafted and customizable, so it stands to reason that one of their top retail destinations is… Walmart?

New data about shopper patterns and preferences uncovers some interesting findings when it comes to the behemoth of Bentonville. According to an article in AdAge, “Walmart indexes higher with those under age 24 than Target, Costco, Kroger, Whole Foods or Trader Joe’s. It’s also rated higher than all those except Target with shoppers aged 25 to 34.”

While this doesn’t mean millennials are more likely to shop at Walmart, “It does mean that millennials spend a higher proportion of their money at Walmart than older generations,” says Jared Schrieber, co-founder and CEO of InfoScout, a company that analyzes consumers’ shopping behavior, which collected the raw data used in the AdAge article.

“[Millennials] are in the first life stage where they often have complete control over their spending,” says Jason Dorsey, millennials researcher and strategist at the Center for Generational Kinetics. It’s striking, he says, “that a traditional, established brand that gets negative press around hot button topics for millennials is still able to win a large group of millennials.”

Walmart’s CMO Stephen Quinn told AdAge, “That kind of shocks a lot of people, including inside the company.” He chalked it up to young adults’ increasingly busy lives. “As millennials become time-crunched with relationships and kids coming along, it’s opening up a strong need for them to have a one-stop shop,” he said.

Schrieber said young adults are also at a point in their lives when stores like Walmart fill a crucial need. “This is highly reflective of their life-stage in that they are establishing their own households for the first time, which results in higher proportions of spend on the household goods offered by big-box retailers such as Walmart and Target,” he says.

“Wal-Mart still has something that meets the needs of this new generation of young adults — budget-sensitive and one-stop shopping,” Dorsey says. “It will be interesting to see if as millennials grow up and their incomes increase, if Walmart is able to convert this current advantage… into long-term loyalty.”

Across all age groups, American households do about 24% of their spending on groceries, cleaning supplies, health and beauty products and the like at Walmart. Among millennials, that figure is 8% higher. “Millennials spend a higher proportion of their money at big-box retailers than other channels such as traditional grocers, drug stores or dollar stores,” Schrieber says.

The InfoScout data also shows that Gen Y hasn’t abandoned its love for Tar-jay: While the average household does 8.6% of its grocery and related items spending at Target, the average millennial household funnels 11.6% of its spending in this category to that retailer. In big data jargon, Target claims a 35% higher “share of wallet” from millennials than from shoppers overall.