the retail generation gap: mastering the art of multigenerational shopping
If you ask any retail executive about the one most important factor for succeeding in retail, right now, many would struggle to answer.
Why? Because there isn’t one singular thing: there are multiple - it’s a constantly changing landscape. In the 2020’s, organisations are navigating a cost-of-living crisis, the decline of the high street, the accelerating advent of new technologies, and so much more. The world of retail changes every day: but one way of cutting through the complexity is to keep the experience of your customers in sharp focus. By understanding who your target customers are – and generational trends - you can ensure that your proposition and operating model resonates with your target consumer base today, whilst simultaneously preparing for success in the future.
Each generation brings its own set of values, expectations, and habits to their shopping. From tech-savvy Millennials and value-driven Gen Z to experience-oriented Baby Boomers, working out how to leverage different generational expectations to your advantage is crucial to thriving in today’s competitive – and ever-changing – market. Here’s your overview.
Preparing for Gen Alpha: The Next Frontier in Consumer Spending
According to the Harvard Business Review, “Gen Alpha is anticipated to be the largest generation yet, with roughly 2.5 billion people by 2024, and is expected to have the greatest spending power in history.” In other words: Gen Alpha are the future of retail.
But who are they? Well, Generation Alpha are those born between 2010 and 2024. The oldest of them will be turning 14 this year, meaning we have just four years until they become adults. The children of Millennials, they are the first truly ‘digitally native’ generation: they’re iPad kids, they’ve never existed in a world in which ‘influencer’ isn’t a widely understood term. And they already have a massive spending power.
Again, from the Harvard Business Review: “By 2029, when the oldest in the Generation Alpha enters adulthood, their economic footprint is estimated to reach more than $5.46 trillion.”
Unsurprisingly, this generation loves to shop online. In fact, they actually see it as a hobby and, like many hobbies, it can go too far. According to Wunderman Thompson, 22% of Gen Alpha children say they prefer online shopping to other forms of entertainment – and 16% of Gen Alpha’s parents said their children have a shopping addiction.
But it’s easy to misread them. Despite being the first digitally native generation, they’re not actually wedded to their screens. According to new data from Wunderman Thompson, 47% Gen Alpha prefers to split their time equally between the indoors and the outdoors.
Unsurprisingly, then, for Gen Alpha, shopping is about experience. Because – and this might surprise you – 19% of Gen Alpha actually prefer shopping in-person. It’s not all about being online: it’s an omnichannel approach to life.
They’re also eco conscious shoppers: 66% of those surveyed say they want to buy from brands that have a positive impact on the world. This is a generation highly conscious of environmental and social issues, meaning they also have strong brand preferences.
From an early age, Gen Alphas develop strong brand preferences, particularly in sectors like skincare and beauty. According to eMarketer: “Beauty retailers like Sephora are winning over Gen Alphas because they give them opportunity to sample the brands they see online without having to commit to a purchase.”
Your Guide to getting Gen Z into Your Store
Like Gen Alpha, Gen Z is often misunderstood. What do you think, when you think about Gen Z? TikTok dances, infinite scrolling, and nonsensical, online slang like ‘brat summer’, right? Well, yes: Gen Z are highly fluent in all things online discourse. But when it comes to their spending habits? 81% of them like shopping in stores. Of these, nearly 97% of those surveyed also shop online – which means that there’s a very specific formula for getting Gen Z into your store.
Gen Z want to be able to order their favourite products online, but also want the instant gratification of buying in-person. Crucially, they flow in and out of online and in-person almost imperceptibly. Which means that the key to getting Gen Z customers is omnichannel retail.
Their main reasons for in-store shopping are:
Instant gratification
Touch before you buy
But they also want an experience. A theatrical, personalised, technologically interesting experience: 60% of Gen Z would apparently prefer to spend money on experiences than physical objects.
And, according to Forbes, “Over two thirds of Gen Z are more inclined to shop at physical stores with technology-enhanced shopping experiences and tech that lessens their time waiting in line.”
Like their younger counterparts, Gen Z are also a highly socially-conscious generation. As such, authenticity in a brand’s approach to sustainability and making the world a ‘better place’ is particularly important.
Decoding Millennial Spending: Strategies for Success
It’s not all avocado toast and Harry Potter. Born between 1981 and 1996, millennials face a unique set of challenges: with high inflation, rising interest rates, and substantial student loans, financial insecurity looms large.
Add in the reality that over 50% of Millennials plan to work as long as possible? You start to get the picture that this is a generation deeply concerned about their financial future.
Unsurprisingly, you might think, Millennials have wholeheartedly embraced online shopping - partly due to its convenience. To them, a seamless shopping experience is everything: which means you have to nail your returns process: 77% cite poor return policies as a deterrent to future purchases. In fact, 66% of enjoy in-store shopping that focuses on streamlining transactions, providing expert customer service, and allowing customers to interact with products first-hand—touching, feeling, and experiencing them directly.
And almost 40% of those surveyed also rely heavily on subscription services like Who Gives A Crap and Hello Fresh for shopping – a trend that highlights a preference for convenience and tailored experiences, reflecting their need for seamless, stress-free interactions with brands.
When it comes to shopping, Millennials are also pragmatic. Price trumps brand loyalty, quality, and even product recommendations.
Millennials care deeply about social responsibility. A striking 75% believe brands should give back to society, not just profit. This generation is more likely to support brands that align with their values, making corporate social responsibility -alongside price - a critical factor in their purchasing decisions.
Millennials are also prone to impulse shopping. A remarkable 74% make impulse purchases, with nearly half doing so via their phones. This makes mobile marketing and quick, engaging online shopping experiences crucial.
Gen X Shopping Habits: A Blueprint for Retail Success
Despite their nickname as ‘the silent generation’, Gen X are hugely important in today’s competitive retail landscape. With massive spending power, understanding the spending habits and preferences of Generation X—those aged 43 to 58—is critical for achieving sustained growth and customer loyalty.
Unsurprisingly, Gen X prefers in-store shopping. This highlights the enduring value of physical retail spaces: ensuring a seamless and enjoyable in-store experience can be a game-changer.
Despite the rise of e-commerce, Gen X maintains a strong preference for brick-and-mortar stores. An astounding 73% of Gen Xers prefer purchasing products in-store, while only 25% opt for direct company websites.
According to the 2022 Customer Expectations Report, 59% of Gen X consumers would recommend a brand based on its customer service: Prioritising support centres and ensuring quick, effective resolution of issues can turn one-time buyers into lifelong customers.
Gen X exhibits a high degree of brand loyalty, with 41% sticking with brands they like. 82% are more likely to buy from companies they trust with their data, and 81% prefer brands that treat their employees well.
Transparent business practices and ethical treatment of employees are crucial in earning and maintaining Gen X's trust and loyalty.
Unlike the younger generations, neutrality and quality matter more than social issues to Gen X: Only 35% believe companies should take a stance on social issues, with 38% opposing it. Additionally, quality is paramount for Gen X, with 82% prioritising it over price - unlike Millennials, who are much more price sensitive.
But they spend a surprising amount of time online: according to HubSpot, 28% of Gen X prefer to find products via social media. This means that developing a robust social and SEO strategy is essential for engaging this age-group. Moreover, Gen X is highly engaged with their mobile devices: 9 out of 10 are on social media.
The Boomer Boom: Capturing the Untapped Spending Potential of Baby Boomers
It goes without saying that Boomers’ buying power is huge: Forbes highlights that amidst economic turbulence, Boomers’ spending power remains robust, making them a cornerstone for retailers aiming to capture significant sales.
“With ample savings and buying power, [Boomers] can afford to spend on discretionary items. In an environment where quick wins are key, retailers need to prioritise the contingency of consumers who can have the maximum impact on sales—and today, that’s clearly boomers” – Forbes
Boomers’ shopping habits reflect a blend of traditional and digital worlds: While 81% prefer in-store purchases, they are also the fastest-growing e-commerce demographic. They are increasingly discovering new products online—45% have done so in the past three months.
And unsurprisingly, since the pandemic, the digital shift has only accelerated:
59% use online channels to uncover hidden gems
44% of boomers find new products in retail environments
But the allure of physical stores remains strong: Boomers have high expectations for online shopping experiences, especially regarding product imagery. Forbes reports that 76% are more likely to buy if they can view products from all angles.
As you might expect, content is king – but clarity is queen. Creating compelling, informative content can establish your brand as a trusted source, driving engagement and conversions. Trust is paramount for Baby Boomers, who are deeply sceptical of misleading information. A staggering 92% consult reviews before purchasing, with only 8% trusting influencer pinions. Boomers are also 40% less likely to return to a retailer if they encounter misleading product images.
The snapshot:
To ensure your retail proposition and operating model is fit for the future and your customers’ expectations, we think there are 7 key questions that you should be asking yourself now.
Is there a detailed understanding of the existing customer base and target customers?
Are our digital and physical channels truly integrated, allowing customers to move seamlessly between them?
Is sustainability embedded across our supply chain, meeting consumer demands for transparency and environmentally-friendly practices?
Are we creating in-store experiences with technology that engage customers and personalises their visit?
Are we using data to personalise customer engagement, building deeper connections and loyalty?
Is our product and service offering agile enough to adapt quickly to shifts in consumer behaviour?
Are you clear on the capabilities you need to build to deliver your customer proposition?
Need help sharpening your operating model for the future of retail, get in touch to find out how we can help.