Although Millennials have gotten a lot of attention recently and retailers have sharpened their focus on the largest generation — 33 percent of the population — Baby Boomers, Generation X and the over-69 “Silent Generation” remain formidable forces in the market.
According to a just-released research report and consumer survey conducted by Synchrony Financial, Baby Boomers (who compose 30 percent of the population) garner 43 percent of the total spend at retail, which compares to Millennials’ 12 percent share. And Gen X, which is 25 percent of the U.S. population, has 30 percent of the spending share at retail while the Silent Generation, which is 12 percent of the population, has a 15 percent spending share.
From a retailer’s perspective, this data presents some challenges and opportunities, said the researchers, who suggest companies deploy a “multigenerational approach” to their marketing strategies.
Lead author of the report Sue Yasav, research insights leader at Synchrony Financial, noted that there’s been a lot of research on Millennials, “yet, actionable insights about what drives their behavior have proven more elusive.” Yasav added that the market is flush with marketing perspectives ranging from “just ignore” Millennials since they don’t have money anyway to the “drop everything” and let’s only focus on them approach.
“One thing is certain,” the research report stated. “Millennials are here to stay. And so are Gen X and Baby Boomer populations.”
The report, which included consumer polling and data analytics from 73 separate retailers, also revealed some stark differences as well as similarities between Boomers and Millennials, which can be leveraged in various ways by retailers. Noteworthy is that Millennials and Boomers both use digital devices such as smartphones and tablets, but Millennials “are much more likely to use their digital devices for a wide variety of shopping-related tasks,” the authors said adding that marketing strategies could be informed by this preference. “Boomers have the devices, but are much less likely to use them as interactively for shopping.”
Specifically, about half the Millennials polled said they used their mobile devices for conducting some form of shopping research, which compares to 17 percent for Boomers. And when it comes to buying a product on a mobile device, 36 percent of Millennials do so compared to 13 percent of Boomers. Regarding overall shopping-related tasks, 75 percent of Millennials use their smartphone and mobile devices — which compares to 32 percent of Boomers.
Other differences include the influence and engagement of social media on shopping behavior. Sixty-seven percent of Millennials say they “like or follow” brands on social media, which compares to 38 percent of Boomers. Millennials are also more likely to buy a product after seeing it on a social media site such as Facebook or Pinterest.
Regarding similarities, Boomers and Millennials both are more likely to make an online purchase if they have a coupon or loyalty card. And both are making frequent online purchases.
When it comes to apparel spending, both Boomers and Millennials are greatly influenced by in-store promotions. But when it comes to e-mail and Internet push marketing, Millennials are more responsive. As a result, the researchers suggest retailers to more closely analyze the best marketing channel or channels to reach their target audience.
The authors also stress the need to align or restructure the c-suite to include senior-level omnichannel officers and/or digital strategy experts. “These positions look across channels to ensure the customer experience is consistent with the brand promise,” Yasav said.
Earlier this week, J.C. Penney Co. Inc. did just that via two newly created positions at the company aimed at strengthening the company’s omnichannel approach.