Retail for the Generations: How to Market to Baby Boomers, Gen X and the Millennials
Various demographics and generations have different shopping habits. Generational marketing is a way to segment the population as a unique strategy to target different age groups. Up until recently, retailers have been heavily focused on marketing to baby boomers. In fact, 4 out of 5 retailers attribute 50% of their sales to baby boomers.
But a new demographic is coming of age – the Millennials. They are entering their prime consumption years and are ready to spend. The often forgotten Gen Xers are also now in the prime of their careers with high spending power, representing an opportunity retailers can’t afford to neglect. Retailers must implement strategies to target each of these age groups through different channels and with messages tailored to resonate best with each generation.
So who are the generations? Here’s a brief look at the underlying characteristics and values that define the Boomers, Gen Xers, and Millennials.
- Born between 1946 and 1964
- The “me” and “rock and roll” music generation
- Responsible for social changes
- First generation to use the word “retirement” to mean being able to enjoy life after the children have left home.
- Born between 1965 and 1980
- The “latch-key kids” who grew up street-smart, often with divorced or career-driven parents
- Want to save the neighborhood, not the world
- Raised in the transition phase of written knowledge to digital knowledge. Most remember being in school without computers and then the introduction of computers in middle school or high school
- Born between 1981 and 2000
- Grew up in a digital environment and have never known a world without computers. They get their information and much of their socialization from the Internet
- Prefer to work in teams
- Envision the world as a 24/7 place with fast and immediate access to anything
- They do not live to work and prefer a more relaxed work environment
As a whole, each generation has a unique set of characteristics and attributes and shopping behaviors also vary greatly among the generations.
The Baby Boomers still have the most disposable income and account for almost 50% of retail sales. However, don’t think they should only be targeted through traditional media. They are very comfortable browsing and shopping online with 85% reporting that they research products online. And according to a report by Immersion Active, 66% of people over 50 in the United States routinely make purchases from online retailers.
Over 27 million social networking users in the U.S. are over the age of 55, with almost 19 million of them active on Facebook specifically. However when it comes to social media, Baby Boomers use these sites in a different way than other generations. They tend to stick to traditional sites like Facebook. They also prefer having one-to-one interaction with retailers and will use social sites simply to find contact information to get in touch with retailers through alternate channels such as phone or email.
According to a Synchrony Financial report, “Balancing Multi-Generational Retail Strategies,” Baby Boomers also love coupons and sales and 75% are more likely to purchase if they have a coupon or loyalty discount.
Many retailers are heavily focused on the Baby Boomers and Millennials but the power of Gen X shouldn’t be discounted. This generation makes up only 25% of the US population but claims 31% of its total income dollars. A recent eMarketer report, “Giving Gen X Its Due: Analyzing a Market of 65 Million Consumers,” explores this age group and their shopping habits. According to the report, 7 in 10 Gen Xers will make a digital purchase this year.
When targeting this generation through digital channels, email reigns as one of the most important channels for this generation. Gen Xers check their email regularly and respond well to personalized offers tailored to their interests and prior purchases. The majority also use social media. According to eMarketer, Gen X internet users use Facebook at least monthly. Their usage of Twitter continues to rise and eMarketer estimates their tweets to reach 19.5% by 2017. Digital video is even more popular among Gen Xers than social networking, with 78.7% downloading or streaming video online at least once per month.
Loyalty programs are another great way to attract this demographic. Dailybreak Media found that Gen X shoppers were the most frequent purchasers once they had joined a loyalty program. Sixty-five percent bought items at least once a month from the stores for which they had loyalty cards. In a 2015 survey by CrowdTwist, nearly half of Gen X internet users polled in North America characterized themselves as extremely or quite loyal to favorite brands.
Millennials are online, social and mobile. According to the Synchrony Financial report, 90% of Millennials research products online. Additional research by AdAge reveals that Millennials are spending an average of 25 hours per week online and turn to content-driven media for shopping guidance. Be sure to have a strong online presence with this generation – they are 247% more likely to be influenced by blogs or social networking sites.
About 79 percent of Millennials use social media like blogs, Facebook, Twitter, and Instagram, with many spending as much as 2-3 hours on these sites per day. According to eMarketer, 68% are influenced by their friends’ social media posts when making a buying decision. They also use social media to interact and converse with retailers. They don’t respond well to retailers who are constantly sending sales messages but will become brand advocates when retailers reach out to them and carry on a social conversation.
Word-of-mouth advocacy and referrals are extremely important to this generation with 73% of Millennials reading others’ opinions before purchasing. They are inspired by people they know in person or online, or someone who shares their interests on social networks. 84 percent of Millennials say user-generated content has at least some influence on what they buy.
Mobile is also huge with this generation. Millennials are much more likely to use their mobile devices when shopping with 69% visiting mobile retail sites and 41% using mobile coupons.
All retailers would do well by implementing strategies to engage each unique generation. However consumers, no matter their age, are also individuals with unique preferences. Generational marketing should be blended with rich data insights to empower marketers to reach their ideal customer base.
To learn how to target the right person for your niche at the right time through the right channel, download our free Right Time Marketing Data Solutions Guide.