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by Alex Palmer | February 29, 2016
A new report from The NPD Group and the Baker Retailing Center at the University of Pennsylvania's Wharton School finds that gift cards are particularly popular with this age group.

The report, titled "Exploring Cross-Generational Buying Behavior at a Time of Complex Change in the Retail Landscape," looks broadly at how consumer behavior in the retail sector is changing with new technology, and how that is affecting individual generations. One of the main takeaways is that gift cards are particularly popular with those of the younger generation (aged 18 to 34).

"The gift card share of wallet is higher for Millennials than for other age groups at mass merchants, convenience stores, and warehouse clubs," write the report's authors, Denise Dahlhoff, research director at the Baker Retailing Center, and Sarah Wittenborn, director of Checkout Tracking at The NPD Group, a brand research firm.

The study draws on data from NPD's Checkout Tracking service on shoppers' online and brick-and-mortar purchases. It found that Millennials and members of Generation X spent a higher share at mass merchants (including those in the categories of grocery, health/beauty, apparel, and technology) than Boomers, with a particular interest in technology and accessories. Contributing to this higher level of spending is Millennials' use of gift cards to make purchases.

The report finds some variation within these categories, however. For example, members of Generation X are found to spend the highest share of their department store expenses on gift cards. Also, Millennials with children showed "considerably lower spending on gift cards," according to the researchers.

The study also examined online purchasing patterns of the respective generations, finding that Millennials spend relatively more on "disruptive travel/transportation" (such as Uber and Airbnb), foodservice delivery, and stores like Target and Etsy. Gen Xers' online spending went heavily to apparel, home, and grocery purchases (at retailers like FreshDirect and Costco). Boomers skewed to traditional travel services (such as Hertz and American Airlines), and department stores.