Key factors influencing student spending habits
The spending of college students in the US is funded largely by Baby Boomer parents, according to research from web advertising firm Burst Media, which found that 46.1% of male and 50.9% of female college students fund their expenses this way.
In fact, fewer than one in five students (18.7%) reported working full time to fund their personal spending habits, and only 39.4% have taken part time work.
What are students' spending priorities? When given a hypothetical US$500 windfall, the students surveyed were inclined to save an average of US$330, allocating the remaining US$170 (in descending order) toward:· Travel;· Clothes;· Doing something with friends;· Electronic goods;· Music.
Ordinary monthly spending also varies depending on the student's gender. Over two-thirds (69.1%) of male college students said they spend US$250 or more in a typical month on personal expenses. In contrast, only 50.2% of female college students spend US$250 or more in a month.
Key drivers of brand choice The company's web-based survey examined students' finances and purchase intentions for a number of product categories. The questions also probed brand switching behaviours and media usage among the 443 students who participated. The survey also identified several key student spending habits - for example:
- Casual clothes New casual clothing is a major purchase prior to starting the college year: Before returning in the fall (autumn), nearly half (46.7%) of college students purchase casual clothing. Perhaps not surprisingly, females are slightly more likely than males to do so (50.2% compared to 43.8%). Shoes and more formal clothing are also common purchases at that time.
- The latest gadgets Technology spending is a priority for many students, and most will purchase technology products before returning to campus. In fact, nearly one-quarter (23.3%) said they would purchase a new laptop computer, and 21.5% would buy a new mobile phone. Other technology products to be purchased before returning to campus included desktop computers (15.2%), digital music players (15.1%), video game consoles (13.7%), and laser printers (6.7%).
- Stores preferred to e-shops Surprisingly, online shopping is not the students' preferred means of purchasing back-to-college products. The survey found that students expect to make almost three-quarters (77.3%) of their purchases offline in a mall or other retail outlet, and only 22.7% online. Male college students tend to spend more online (26.6%) than female students (16.7%).
- Price decides most brand choices A better price was the main influencer of brand switching, cited by 66.3% of college students, and recommendations from friends was ranked second at 56.0%. Far behind these two factors was seeing others using a brand (25.9%), and general buzz about a product (21.0%). Paid endorsements carry little weight with this demographic, with only 18.6% responding to advertisements, 18% to packaging, 14.2% to press stories, and 9.8% being influenced by celebrity endorsements.
The internet's role The survey also asked about the internet usage patterns of the students, as well as their various media interactions. One-third (33.0%) of the students said they spend more than 10 hours per week on the internet, and 19.6% spend more than 20 hours per week online. There were no surprises when examining the most popular internet activities, which were instant messaging, downloading music or MP3 files, and school work.
Interestingly, internet usage levels surpassed those of television and terrestrial or satellite radio, as 16.6% said they watch more than 10 hours per week of television, and only 5.5% listen to terrestrial or satellite radio for more than 10 hours per week.
According to Jarvis Coffin, co-founder and CEO for Burst Media, "What internet advertisers can learn from this survey is the importance of cross-channel marketing initiatives that build word-of-mouth appeal. Offers to students that include personal interaction with products will tend to create demand and longer-term brand loyalty."