SPENDING PATTERN

UNDERSTANDING SPENDING PATTERN OF THE PEOPLE LIVING IN CITIES HELPED TO CURATE PLICO MODULAR FURNITURE SYSTEM

Budget is an important consideration for the majority of the people when it comes to spending and understanding the user’s ability and spending pattern helps to not only draw a picture of their lifestyle. This helps to understand whether they are the target customer and developing a concept that will be a welcome addition in their lifestyle as well as the budget. This helps to draw a better picture of the target user and how this thesis is a welcome addition to their lives.

Most people have a budget in mind when they spend money. But people in different cities tend to spend in different ways. For example, in New York, the population density means high housing costs, but the availability of public transportation means that people can save money on getting around the city.

Although people in different cities have different spending patterns but there are still some common factors when it comes to spending and expenditure. People living in the major cities across the US spend major chunk of their earning on housing, followed by transportation. These two factors constituted around 50% of the average budget of the people living in the metropolises across the US. But if we look deeper, a person living in Houston is spending 20 percent of the budget on transportation and 32 percent on housing, while a New Yorker is spending 12 percent on transportation and 40 percent on housing. Apart from transportation and housing, food is also a major component when it comes to spending for example a person living in New York spends 11 percent of their budget on food, while in Miami it jumps up to 13.8 percent.

As mentioned in the pie chart, Housing -34.9 percent and Transportation – 14.6 percent constitute the biggest share of the Household spending on Essential Purchases in the Metropolitan areas. This means almost half of the earnings are spend on these two essential commodities, while the 20 percent approximate spending is on non-Essential commodities such as Entertainment – 5 percent, Dinning out 5.5 percent, Apparel – 3.2 percent.

The sending on the Essential Purchases such as Housing, Transportation, Personal Insurance and pensions, Healthcare and Education also varies from Metropolitan Average vs Rural Area Average. Where a person spends 78.5 of their household spending on essential purchases in the metropolitan, 77.9 percent of the household spending is on essential purchases in the rural areas. While interestingly the spending on Nonessential purchases is low in the Metropolitan areas – 21.5 percent vs 22.1 percent in the Rural areas.

United States Furniture Market and furnishing is the center of the home goods industry and it consists of the manufacturing, distribution and retail of home furnishing as well as all the products and goods related to the home furnishing, outdoors and gardening equipment. In the year 2019, furniture sales in the States amounted to 114.5 billion U.S. dollars. The home furnishings market is made up of small categories linked to different spaces and functions across residential and commercial spaces. Some of the leaders in the home furnishing industry in the United States in the year 2019 were Ashely Home Store followed by IKEA, William Sonoma, Mattress Firm, Restoration Hardware and others.

(Bureau of Labor Statistics)

Understanding the spending prowess of the target consumer – Millennials and Generation Z allows one to not only understand their behavior pattern when it comes to spending their money but also if the solutions being thought of is a suitable for them and can find application in their busy lifestyle.