According to findings released recently from Alloy Media + Marketing's 10th Annual College Explorer Study, powered by Harris Interactive, a historic number of students will go to college this Fall, carrying with them an unprecedented and immense $306 billion in projected spending power — up 13% since 2009's estimates.
Now the largest class in history, the current college population (ages 18–34) jumps 6% from projected 2009 figures. And, while overall non-discretionary expenses are on the rise, it's this consumer group's discretionary spend that is particularly revealing. Showing a projected 10% increase since last year, the 18–34 year old college set continues to display a penchant for what they deem "must haves", with annual discretionary spending figures rising to an estimated $69 billion, representing a substantial hike from 2009.
"This year's survey shows a substantial increase in college enrollment and with this ever-broadening population, a student body that appears more confident towards the future of the country's financial state of affairs and doling out their discretionary income for the necessary trappings of college life," commented Dana Markow, VP, Youth and Education Research, Harris Interactive.
Clearly, these youthful consumers are not cutting back deeply, despite the continuation of a challenged economy. In fact, their spending appears to illuminate an increasingly optimistic view when it comes to the state of the nation. When asked their opinion about the future of the nation's economy, more than four out of every ten students (42%) in both the 18–24 and 18–34 age brackets stated they feel the economy will improve in the coming year. Compared to 31% of those 35 and older in the U.S. general population who reported the same, it appears the current student body is expressing more confidence when it comes to the country's financial turnaround.
This optimism seems to be translating at the cash register, as students (18–34) report they are spending 3% more per month on discretionary purchases than they did last year — an average of $361 per student.
And where, exactly, is that added chunk of change going? For both the overall 18–34 college student demographic and its younger subset (18–24), entertainment, personal care products and technology (other than cell phones/PDAs) get a lift this year, showing a slight increase in overall monthly category spend. For this decidedly social and connected group, it appears that looking good and feeling good remain high priority.
Interestingly, when it comes down to a battle of the sexes, some stereotypes may still apply. Male students ages 18–34 are spending more towards entertainment and technology on a monthly basis, while females lead slightly in clothing and shoes, cosmetics and cell phone purchases. While gaming may be top of mind for the male student body, it also appears the 21st century college man is paying increasing attention to his personal appearance; according to the recent report, males are actually spending slightly more than females for personal care products.
Annual discretionary spending among 18–24 year old college students jumps to a projected $37.7 billion. For this younger generation, sacrifice does not seem to be in the current curriculum. While automotive and entertainment, two of the top three categories for annual spending among 18–24 year olds, saw an increase since last year, personal care and technology spending figures increased nearly as much. A similar trend is reported for 18–34 year old college consumers and, while food still leads in annual category expenditure, it is spending on personal care products and entertainment that shows a slightly larger leap over last year's figures.
Interestingly, when students were asked if their spending habits had changed in the past year, 18–24 year olds appear to have set different fiscal priorities than their older counterparts. More than half of the 18–24 year olds surveyed stated spending for entertainment, eating out, and bars and nightclubs has remained steady or increased, while approximately only four in ten 25–34 year olds agreed with such sentiment. Specifically, when it comes to eating out, a hefty 52% of 18–24 year olds stated spending stayed steady or increased, vs. 38% for 25–34 year olds. While neither group reported major shifts in their activity, for the younger college student "fun" goes hand in hand with required studies, appearing to be the way of campus life.
"This year's findings offer a very compelling view of college consumers' growing influence in the marketplace," stated Andy Sawyer, EVP, Media Services, Alloy Media + Marketing.
"From sheer population growth, compounded with notable spending hikes in key discretionary categories, college students' ever-increasing consumer power is undeniable. The annual College Explorer Study definitively reiterates the importance this group holds for brands aiming to gain long term loyalty, and should serve as the marketer's essential guide to navigating the modern campus and its inhabitants' unique behaviors."[Source: 10th Annual College Explorer Study. Harris Interactive/Alloy Media + Marketing. 7 Jul. 2010. Web. 15 Jul. 2010.]