With millions of students returning to university or beginning their degrees for the first time this academic year, it should come as no surprise to learn that these large student influxes have a significant – and in some cases dramatic – impact on the local economies of university towns and cities. From Birmingham to Manchester, and Newport to Glasgow, student spending accounts for significant portions of economic activity right across the UK.
Recent research from Experian casts student spending in a significantly more transparent light that is of value to marketers looking to take advantage of the ‘Student £’. In total, it’s estimated the spending power of the nearly 1.8 million full time students in the UK will contribute over 6 billion to the economies of university towns and cities – representing a large shift in money from where students live to where they study. On average, university cities have student spending to thank for 12.7% of their population’s spending, with the average student in the UK spending £9,252 each year.
Location, location, location
London’s West End tops the rankings on total student spend, with students spending £902.4M over the course of the year, excluding money spent on rent and travel. Birmingham and Manchester make up the top three, which is unsurprising given the comparative size of student populations in these cities. London aside, it’s primarily northern towns and cities which enjoy the rewards of high student populations. In a ‘Uniland’ twist on the ‘Northern Powerhouse’, key university towns such as Leeds, Newcastle-upon-Tyne and Manchester enjoy proportionally significant economic boosts from their elevated term-time student populations. The 53,890 full time students in Leeds, for example, contributed a total of £205.6m to the area throughout the 2016-17 academic year.
Major cities like London, Manchester and Birmingham may enjoy the lion’s share of total student spending, but given the comparatively larger size of their economies, student contributions move the economic needle less than they do in smaller towns where students dominate local populations during term time. In Newport student spending creates a significant financial upsurge, representing 74.6% of all spending; in Buckingham, the figure is a little over 50%. Cut through all of these data points and the reality becomes clear that student economic activity is critical to local economies right across the country.
The Rise of International Students
Another key factor in student spending is the proportion of international students in university towns and cities. Unsurprisingly, London again ranks highest by this measure, with students from abroad making up 36.9% of the student body, and spending approximately £333 million. Other university cities like Cambridge, where the proportion of international students stands at 36%, rely on the contingent of international students to a more material extent than the capital – a precipitous drop in the level of international students would likely have considerable financial repercussions for the town and others like it. For marketers, knowing that over a third of students in Cambridge are from overseas allows for more targeted, locale-specific strategies and advertising campaigns, for example, increasing ROI on marketing in a measurable way.
Getting a deeper understanding
All this data is useful in gaining an understanding of broader patterns of student spending, and its utility only increases when overlaid with Experian’s Mosaic geo-demographic tool. For example, students spend most time on the internet among all social demographics, and are most likely of all groups to use smartphones for online shopping and checking in on social media. Those within this demographic are most commonly found in Sheffield Central, Manchester Central, and Leeds Central – broadly in line with the top-line spending power data in Experian’s research. These insights are valuable additions to a marketer’s toolbox, allowing more bespoke targeting of student-friendly products and services.
Clearly, understanding the importance of the student demographic is vital for businesses everywhere. Armed with the knowledge of student impact on local economies, businesses can tailor their approach to maximise term-time profits. There is a real opportunity to engage new audiences and drive business growth. By understanding key areas, companies can determine the best store locations to drive footfall or adapt marketing efforts. The challenge for marketers is targeting the right audience at the right time, in the right place, and on the right channel. Knowing how best to reach the students and their families is a significant benefit to the marketing professional.
When we have the tools to zoom out from large-scale trends – such as student populations and spending levels – and we start to examine the reasons behind these trends, we can gather new insights into consumer behaviour on a large scale. Marketers equipped with Experian’s data are able to gain a much clearer picture of their target markets: where particular segments of consumers live, what drives them and how to sell to them.