When people think of college spending habits, it’s easy to just say “cheap”. And yes, we are. But there’s more to it than that. In Part 1: No Brand Loyalty, I argued that one reason college kids are cheap is that purchasing habits aren’t developed yet, which provides an opportunity to hook a relatively “blank-slate” purchaser more susceptible to price and advertising. Now, I’d like to talk about what college kids actually do spend money on by breaking down purchases into…
2. Needs vs. Wants
In my experience, college kids tend to scrimp on necessary items but splurge on luxury items and experiences. This theory explains why my friend who refuses to buy Tupperware (“leftover takeout boxes work fine!”) will spend $150 to see her favorite band in concert. Or one story where a student sold his meal plan to go on spring break, then didn’t know what to do for food the second half of the semester.
It’s not just my experiences either. This article cited a survey by the National Association of College Stores found some interesting numbers regarding the Needs/Wants phenomenon. While 75% of students surveyed said that “they compare prices more often than in previous years”, 20% reported spending more on entertainment and 13% said they were buying more designer-brand clothing. This infographic by market research firm O’Donnell & Associates that shows 40% of the average student budget is spent on discretionary purchases.
Why do college kids have low standards for necessities but high standards for luxuries? Honestly, spending money on toilet paper (“we could just steal some from the library”) or razor blades isn’t fun. If you had an allowance or part-time job in high school, the money you made was probably spent on doing fun things because the necessities were probably taken care of at home. This pattern associates money with fun, not necessity. Even if students are paying their way through school or helped pay the bills in high school, that just means less money to spend of their own volition. If you only had a small amount of money to spend however you wanted, wouldn’t you want to buy something fun instead of Tupperware?
So where’s the opportunity? If you’re marketing a product to a college demographic, do everything possible the product or purchase seem fun as well as practical. Take Blendtec, whose “Will it Blend?” videos make boring kitchen appliances seem exciting and entertaining. On the other hand, if you’re selling a luxury experience (such as skydiving) or product (such as an car stereo system), consider opening your market to include college students. Appeal to them on a pricing angle by offering a student discount or reduced rates for group.
Thanks for reading! Lindsey Kirchoff