College Student Discretionary Spend Way Up
Students are back on campus -- and boy are they ready to spend. Marketing firm Re:fuel’s annual College Explorer survey, which is done in collaboration with Crux Research, reports that this year will see students going for their masters in discretionary spending.
The study, based on online polls of 1,528 18- to-34-year-old students in March and April this year (with the majority being full-time students), covers the gamut: spending habits, technology adoption, and politics.
For marketers, the good news is that college kids are confident, with discretionary spend 40% above last year’s figure. The firm says that apparel and personal care products in particular are booming, with sales of products in both areas up over 100% versus last year. The 41 million or so college students in the U.S. are carrying around about $405 billion of dad and mom's money for total spending, a 5% increase over adjusted 2011 spending.
Discretionary spending, $86 billion in 2011, is around $120 billion this year. In addition to apparel and personal care, technology -- up 227% -- and cosmetics -- up 280% -- are booming on campus. Still, for the 12th consecutive year, food is likely to be the top discretionary spend. So far in 2012, students have spent more than $44 billion on food, including $20.7 billion in grocery stores, $9.6 billion on food at convenience stores and $13.7 billion spent while dining out. And while students spend much of the hefty 8.5 hours of free time per day on campus, food is what drives them off the quad. Nearly all (92%) students visit off-campus grocery stores, 88% visit quick-service restaurants and 83% visit sit-down restaurants in a typical month, according to the study.
Tammy Nelson, VP marketing and research at Re:fuel, says the best way to reach college students is definitely on campus. “College students -- even nontraditional, older students and those attending two-year schools -- spend a tremendous amount of time on their college campus,” she said in a statement. “It’s the primary hub, not only for academic activities, but also for social and recreational pursuits, making it an ideal environment for marketers looking to foster brand connections with young adult consumers making many brand decisions for the first time.”
When it comes to social and location, platforms like Groupon and Google Offers are seeing subscriptions rise this year. Forty-one percent of students polled last year used such services. This year it's 45%, and those subscribers say they are using the services far more frequently, driving traffic from 10.5 million per month in 2011 to 37.6 million in 2012.
Helping drive that trend may be increased use of smartphones. The College Explorer study found that for the first time smartphone ownership by students (at 55% of those surveyed) passed feature phone ownership (43%). Respondents own an average of 6.4 devices and the time they spend on them has jumped three hours to 14.4 total tech hours per day, versus last year.
The news is also good for brands looking to do grassroots efforts around events and promotions on campus. Nearly half (47%) of co-eds have received a free product sample, and 65% of them went on to purchase the brand. More than a third (34%) have attended a brand-sponsored event on campus; 64% went on to purchase the brand.