by Dan Rafter
Millennials have received a lot of press for their impact on retailers. But Baby Boomers continue to exert their own influence on the world of retailing, according to the latest research from Marcus & Millichap.
The power of these two groups isn’t surprising. As Marcus & Millichap reports, Baby Boomers and Millennials account for more than 150 million U.S. residents. The two groups have a combined spending power of more than $5.5 trillion. These impressive numbers have inspired retailers to scramble to serve Boomers and Millennials, with many trying to combine traditional selling methods with new technologies.
As an example of the spending power of these generations, just look at how Millennials have impacted retailers involved in the housing market. According to Marcus & Millichap’s research, spending on the furniture and home-furnishings retail segment jumped 3.6 percent during the last 12 months as a growing number of Millennials have started new households or have left existing ones. Spending at building material and garden centers jumped 3.6 percent during the past year, Marcus & Millichap said.
At the same time, Baby Boomers have exerted a positive impact on the healthcare industry as these consumers age. Drug stores are especially seeing beneffits, according to Marcus & Millichap, as sales at these retailers have soared 8.3 percent during the past 12 months. This increase has been driven largely by purchases of medications and healthcare-related products.
Both Boomers and Millennials have provided a boost to the multifamily market, with Marcus & Millichap reporting that the spending power of these consumers is one reason why developers completed more than 215,000 new rental units across the United States in the year ending in the first quarter of 2016. During this same period, tenants absorbed more than 237,000 apartment units, causing the nationwide vacancy rate for apartments to fall to 4.2 percent. The average rents at apartment buildings jumped nearly 6 percent since the first quarter of last year, according to Marcus & Millichap’s report.