Sam, a Chartered Management Degree Apprentice at TUI, reflects on this, noting
I think the cost-of-living is definitely affecting me personally. And a lot of the people that I speak to have cut back on takeaways and fast food. I do my essential food shop each week and really try and look for deals. In terms of luxuries, they're quite minimal at the moment.
The core question arises – do students still possess that untamed enthusiasm for university life? In our 2023 Freshers Spends and Trends report, we investigated what changes in spending we are seeing from Gen Z and, crucially in this blog post, what the student accommodation sector can learn from this insight.
Financial conservatism is evident
This year's students are demonstrating increased financial caution, particularly when it comes to non-essential spending. Abishek, a student at The University of Oxford, sheds light on the changing work habits:
If the cost-of-living crisis wasn't there, I'd do less hours per week, purely because the main reason I am doing part-time work is to put money in my pocket. And if there wasn't as much need for the money, I would place less emphasis on it.
There's a discernible reduction in outlays on pre-university luxuries and non-essential supplies. However, while groceries continue to command a significant portion of their budget, academic-related expenditures have surged. Anna, a student at Amsterdam Metropolitan University, explains, "Now I'm spending my money a bit differently. And it's going more towards the cost of my course and what I need." This is evidenced by the notable uptake in spending on stationery and course materials. Such trends emphasise that, despite tightened purse strings, education and academic preparedness remain paramount for students.
The most popular retail choices
Budget supermarkets like Aldi and Lidl are emerging as student favourites. Their central aisles present an opportunity to tap into more than just the grocery sector in the upcoming thrifty year. “I'm spending less on takeaways and going out. When I'm shopping at supermarkets it’s at Lidl and Aldi a lot more. If I'm wanting to buy something I'm waiting for sales or where I receive a discount code.” adds Anna.
Shift in spending patterns
Students are now spending £52 per week on leisure activities such as eating out and alcohol, down from £60 the previous year. This marks a 15% drop which, when adjusted for inflation, translates to a real-world reduction of 22%, suggesting a strategic cutback on leisure to manage their finances elsewhere.
Loads of people that I know are now getting part-time jobs, I've definitely seen an increase in the hours, I'm working double hours a week
The potential of experiential marketing
With the majority of Gen Z students concerned about their bank balances, innovative marketing techniques, such as experiential events hosted by brands like Bumble and Ellesse, have proven effective in garnering their interest. Bumble extends its presence beyond a dating app by hosting community events, while Ellesse showcases its sportswear line through interactive pop-ups, portraying an enticing lifestyle. For the student accommodation sector, this can translate into innovative strategies such as VR tours of buildings or pop-up room experiences, all aimed at letting students immerse in potential living scenarios. In a world rife with digital saturation, brands that offer tangible, memorable experiences to Gen Z stand out and cultivate genuine loyalty.
Student concerns and enjoyments
Although 75% of students relish the experience of meeting new peers, 34% admit that making new friends is a significant concern. The predominant worry, however, remains financial, with almost 4 out of 5 students expressing concerns.
Communication preferences for discounts
Emails continue to be the preferred channel for students to hear about sales and discounts, with 69% favouring it. App notifications and text messages follow, but social media platforms like Instagram fall behind, suggesting a tilt towards direct and personalised modes of communication.
The evolution of product choices
While course materials remain the prime purchase before term commencement, as the term progresses, the spending shifts towards leisure and lifestyle. Notably, printers, once a staple, are seeing a decline, with only 10% of students opting for them.
The student ecosystem is undergoing a transformation. Financial caution is emerging as a dominant theme, with students making selective choices in their spending. UCAS is committed to aiding these young minds in navigating these changes, ensuring they make informed decisions, be they academic or otherwise. Brands targeting this demographic will need to innovate and adapt, keeping in mind the evolving landscape.
As Lavina Chainani from UCAS aptly states,
It’s not a bleak picture for student-focused brands this year, it’s just a different one.
And as these students step into tomorrow, their evolving habits and preferences will undeniably shape the consumer landscape.
Reach out to our team for a discussion and expert guidance. Drop us an email at email@example.com and let's collaboratively navigate the future of student accommodation marketing.