European Retail Destination Index

European Retail Destination Index
 
Where are the millennial and Gen Z consumers?

17 November 2016, by Marie Hickey

Affluence of the ‘youth’ population as important as scale in determining a city’s appeal

 

Our recent analysis of UK shopping habits highlighted a number of differences in the way different generations shop for fashion. While the research focused on UK consumers some of the demographic trends, we suspect, could be universal across Europe.

The research found that the physical store still holds the aces when it comes to the customer experience and engagement, particularly for the younger age groups of millennials (those aged 25-34 years) and Gen Z consumers (aged 16-24 years). In those markets where online retailing only forms a small part of the shopping experience, this preference for an in-store experience is likely to be even more pronounced.

For those expanding international retail brands targeting this demographic the need to have a physical presence as part of their expansion strategy, in order to drive sales, becomes vital. The question is then, which of our gateway European cities offer the greatest opportunity to these types of retailers?

A very simplistic approach is to identify those cities that have the largest youth population. London and Paris, based purely on their overall scale, lead with a population aged between 15 and 34 years above 2.5 million. The remaining gateway cities have relatively similar sized populations aged between 15 to 34 years ranging from approximately 1 million in Madrid to 400,000 in Dublin.

From a retailer perspective, the markets with the larger youth populations are likely to have a stronger appeal, meaning that beyond Paris and London, Madrid and Berlin stand out. However, with youth unemployment still a major issue in a number of European countries those cities with low levels of unemployment, pointing to a greater propensity to spend, could hold a greater appeal dependent on brand positioning and their specific requirements. For example, while Warsaw, Milan, Amsterdam, Munich and Dublin all have relatively small ‘youth’ populations, they have some of the lowest unemployment rates of the smaller gateway cities (Figure 8).

FIGURE 8

‘Youth’ population count and unemployment rate

 
‘Youth’ population count and unemployment rate

Source: Oxford Economics, Local Statistical Offices

 

 
Dublin has a low unemployment rate

▲ Dublin has a low unemployment rate

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Key Contacts

Marie Hickey

Marie Hickey

Director
Commercial Research

Savills Margaret Street

+44 (0) 20 3320 8288

 

Lydia Brissy

Lydia Brissy

Director
European Research

Savills Paris

+ 33 (0) 1 44 51 73 88

 

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