Shoppers’ coming-of-age experiences define future shopping behaviors, according to just-released research from Alliance Data Systems Corp. The study, titled The Generational Perspective, was conducted by Alliance Data’s Analytics and Insights Institute, and was derived from over 2,400 respondents.
Researchers at Alliance Data, which is a private label credit card provider, cross-referenced results from a prior report, Understanding Customer Loyalty, which confirmed that generational cultural identities and life stages are directly associated with consumer buying habits.
Shannon Andrick, the vice president of marketing advancement at Alliance Data’s card services business, said, “Alliance Data’s study showed that our expectations are first guided by generational identity and then by life’s different stages — career, family, empty-nesting and retirement,” Andrick added. “We note that ‘brick and mobile’ is growing, but in-store is still king, and successful brands recognize that channel matters — but not as much as the overall brand experience does. And, they must keep their eyes on the next generation so they can accommodate their emerging shopping preferences, too.”
The report includes comparative data on Millennials (aged 18 to 35), Generation X (aged 36 to 51), Baby Boomers (aged 52-70) and the Silent Generation (aged over 71). Based on the results, Alliance Data recommends that brands “think generationally” about customer journeys and adopt a “targeted” approach to consumer engagement.
Key points from the study show differences in how “loyalty” is defined among generations, and that each age group connects to brands differently. Fifty-two percent of Millennials are “willing to go out of their way” for brands they favor, compared 41 percent of Generation Xers and Baby Boomers, and 38 percent of the Silent Generation.
Yet, some things never change. Baseline brand expectations remain the same across all generations, which include payment security (89 percent), easy interactions with brands (76 percent) and promotional transparency (71 percent). More than 75 percent of all generations want to see products in a store and each generation ranked customer service as the number-one reason for memorable shopping experiences.
The data also found that Millennials feel emotional connections to shopping experiences in-store and online and anticipate expedient product deliveries. The most flexible shoppers of all generations featured in the study, Millennials will purchase based on mood, impulse, atmosphere, friends and family recommendations, loyalty program offerings, private label credit card offerings and total in-store experiences, among other sentiments.
Twenty-nine percent of Millennials expect brands to have an active presence on social media, compared to Generation X, Baby Boomers and the Silent Generation at 15 percent, 6 percent and 3 percent, respectively. The study also uncovered Millennials’ brand expectations: 57 percent expect to be able to shop with a brand online and 29 percent say brands must have a mobile app. Speed is another important factor for both Millennials and Generation Xers, who said that fast checkout strongly influences purchase decisions and they expect instant gratification as a result of coming of age during the information revolution.
Generation X is more focused on need than want, as their life stage is a balance of career and family. As a result, atmosphere, tech accessibility, fast checkout and ratings and reviews strongly influence their purchases. Baby Boomers showed greater interest in product quality and value, and not cost alone. The Silent Generation’s “waste not, want not” ethos pervades their shopping experiences. Pragmatism and value are prized highly among this group, which translates to a preference for product quality and reliability.
In light of the data, Alliance Data recommends that brands and retailers “think generationally about customer experiences.” Future strategies for targeting consumers include creating exceptional experiences across brick-and-mobile environments, blending new technologies with touch and feel in-store products, and a keen focus on emerging consumer preferences for Generation Z, which include sustainability, environmentalism and social consciousness.
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