While mobile adoption continues to grow, led by younger generations, shopping in a physical store is still the preferred way to making purchases. What resonates and motivates conversions differ in ways of communication and customer service expectations. Gen Z and Millennial generations are the most likely to gravitate toward companies that lead with values and social impact while Gen X care about loyalty programs and customized products first as priorities. Gen Z and Millennials expect something fresh and new each time they visit a store and are driven by influencers they follow online. Here’s a look into the drivers of each generation.
Millennials – A Shift to JOMO over FOMO
Aged 23-38 years, the Millennial generation continues to see an evolution is its demographic base like a coin of two sides. As a whole, the age group stands 80 million strong in the United States alone, and each year they spend approximately $600 billion, according to a recent report by Accenture. By 2020, it’s projected that their spending in the United States will grow to $1.4 trillion annually and represent 30+ percent of total retail sales. However, all millennials are not created equal as we continue to see two subcultures emerge: those over the age of 31 and those still in their 20’s.
They as a whole are cross channel shoppers with an increasing fluidity to jump from offline to online worlds in their quest for the best products and services. A large portion of them showroom knowing they have access to real-time product information and that influences their purchase decisions. They value brick and mortar shopping but expect 100% pricing consistency in stores and online and they expect integrated, seamless experience regardless of the channel.
As a whole they are tech savvy and online often, but not all obsess about their social media footprint, or being public stars. As retailers work hard in creating insta-worthy moments to feed today’s “experience economy” what is growing even stronger is the younger millennials demand for trust. In a recent podcast, Jane Lu founder of Showpo spoke on how she and her team understand that trust is today’s currency. Shoppers ”buy from people, not companies; they are the first to tell you when you do something wrong…but also your biggest advocate.” And she puts her energy into the understanding being one of the most genuine influencers for her brand with transparent posts into life of the Showpo CEO.
The younger millennial has also shifted a prioritization of spend with 28% of younger millennials choosing to eat and drink at home, embracing their home-body status, according to recent study by Mintel. “Staying home is the new going out” mentality is fueling the Joy of Missing Out (JOMO) and the #selfcare movement (nail care, face care, hair care) and brands like Snowe and Burrow are catching on by launching clever campaigns like the Nester collection and Caterpillar video to speak to this growing trend.
Gen Z – The world’s first truly digital natives
Generation Z, aged 4-22 years, is currently 26% of the population and represent approximately $40 billion dollars in funds. They don’t read newspapers, they don’t tolerate crappy coffee, they don’t know what a busy signal means and they are the world’s first truly digital native generation. Their mobile screen isn’t their second screen, it’s the first one, and they can multitask like no other, using up to 5 screens at a time. Their attention span is less that of a millennial and for them working Wi-Fi is more important to them than working bathrooms in a retail store.
Gen Z shoppers expect to move seamlessly between physical and digital worlds, yet they continue to show their interest in shopping at retail stores supersedes that of online. They connect online, but they value face-to-face interactions. They want to get out and discover and they want brands to be real so they can be unique. Unlike the millennial generation, they care about being immersed in an experience more than photographs of themselves in one. They live in a 4D world and are captivated by experience that emulate that.
They also view loyalty differently than prior generations. According to a recent Ernst & Young report when it comes to making reward programs special only 31% of Gen Z shoppers prefer members-only events while 80% of Gen Zers chose free delivery as a value-add. Retailers trying to appeal to this segment using loyalty programs should focus on the practical perks.
And equality and inclusion are non-negotiable as Gen Z will likely be the last white-majority generation. They are driven by curiosity and diversity and will gravitate to brands that value that.
GenX – The Generation Slowly Making a Come Back
While Gen X may be smaller in numbers than either their prior and preceding generations, they number at around 66 million compared to 70-plus million Boomers and Millennials. However, this age group, aged 38-52 may be in a better position to be big spenders over the next decade and retailers should not ignore this generation. Gen X as a group has a significant presence in leadership positions with almost sixty-eight percent of the CEOs of Fortune 500 corporations held by this generation. Of the three groups, they tend to have the highest loyalty and while it may not be illustrative by their social feeds, GenX has had a history of adventurous innovation and thrill-seeking tendencies. To them immersive may not mean a store with an instagrammable backdrop but they do value storytelling and adventures.
Like GenZ, Gen Xers were the first generation where as a majority both parents worked and were out of the house most of the day and they are adopting and being influenced by younger generations. While they were slower to adopt, they are getting more digital savvy, buying Alexa devices, shopping on Amazon, using Lyft or Uber.
While each group differs, one thing remains the same – they are all continue to be consumers. And, whether shopping online or offline they want consistency and fluidity and they all expect a retailer to understand what they need and want.
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