This month we celebrated the Chinese lunar new year, which reminds us of that ancient Chinese proverb: "may you live in interesting times."
Frankly, it's hard to imagine how times could be any more "interesting" than what we've endured for the past two years. The reality is that we've had enough excitement for a while, thank you very much. We're all ready for the pandemic to be over so we can go back to our ordinary (a.k.a. less stressful) lives.
For many retailers, the big question now becomes, what happens next?
What will transpire when restrictions are lifted and the world feels normal again? Will customers spend more or spend less? Will they go back to stores or continue to shop online? Will they return to offices or work from home, or even return to work at all?
It would be easier to answer these questions if shoppers were actually a monolithic block of buyers in lock-step with one another, but we're not. So it feels like now is a good time to take a closer look at just who today's consumers really are.
Shopping by the numbers
When it comes to buying behavior and shopping preferences, the four primary segments of the adult population in the U.S. (defined as people 18 years of age and older) are generally characterized not only by their life stages — entering the workforce, starting families, mid-career, empty nesters, etc. — but also by the technology that was ubiquitous when they came of age.
Baby Boomers (ages 58 - 74): The Service Generation
- Boomers are roughly 22% of the total U.S. population, but they control 53% of its wealth. That's more economic muscle than all the other generations combined, making them the most powerful and influential generation in the U.S. today.
- They grew up financially secure during years of high employment and steady economic growth. As a result, they don't worry much about product reviews or price, and they don't have the patience to do hours of research. They want what they want, when they want it, and they can afford to get it.
- Boomers value convenience above all else. They don't think of shopping as entertainment. For them, well-trained, helpful customer service trumps product selection.
- As the last generation to grow up before there was an Internet, they are still the most likely to make purchases in a store and least likely to use click-and-collect options like BOPIS or BOPAC.
Gen X (ages 42 - 57): The Skeptical Generation
- Gen Xers represent 25% of the total U.S. population and control 31% of total U.S. income, but until more Boomers retire from positions of authority in business, government, and academia, Gen X has resources but not much power.
- Often referred to as "latchkey kids," Gen Xers came of age in an era of economic uncertainty and culture change that left more children to fend for themselves while both parents went to work, making them both more cynical and more independent than previous generations.
- Largely skeptical of capital "M" marketing, when it comes to shopping, they prefer to do their own research using internet search, customer reviews, and social media, and they appreciate personalized email that demonstrates that a brand "sees" them and their individual likes and dislikes.
Millennials (ages 25 - 41): The Social Consumers
- Gen Y, or Millennials, are currently the largest adult generation (by headcount) in the U.S. Deeply impacted by the Great Recession of 2007 - 2009, they care more about shared values and authenticity than brand names, and 54% say they're willing to pay a premium for sustainable goods and packaging.
- Described as "the first global generation," Millennials grew up with the Internet. They love mobile phones and social media and are highly influenced by customer reviews and word-of-mouth referrals. They think shopping is fun, and going to the store is likely to be a social event.
- According to mPOS platform Salesfloor, "Millenials are so omnivorous in their point-of-sales habits that as a generation, they're the most likely to make use of every avenue of purchasing available to them." As the first truly omnichannel generation, they are also the most likely to use click-and-collect tools to fulfill purchases in-store.
Gen Z (ages 18 - 24): The Digital Platform Generation
- Gen Z is the first generation of truly digital natives who don't remember a world before the Internet. They are financially pragmatic and less brand loyal than previous generations. Now that they're earning their own disposable income, they spend an average of 15.4 hours per week on smartphones to find deals and locate items that aren't available in stores.
- Concerned about sustainability, climate change, the economy, and of course the pandemic, they are highly diverse yet very connected to one another (because they feel they can't count on anyone else.) They expect brands to take a stand on ethical issues and a whopping 64% are willing to pay a premium for sustainable packaging.
More than half of Gen Z's say they're social buyers. They research everything, compare notes in digital forums, and are willing to spend time online to find better prices. 96% are willing to read reviews or recommendations before purchase.
- While they are the most likely of all the generations to shop via social media, Gen Z also enjoys the social aspects of shopping in stores and the instant gratification of not waiting for items to be delivered. They are willing to let brands collect personal data in exchange for a better buying experience or personalized deals and discounts. They have high expectations for customer service and product quality, and assume that brands will use technology to improve the shopping experience through offerings like search, digital payments, product customization and digital try-on.
So why does everyone love omnichannel retail?
The sudden onset of COVID restrictions encouraged us to collectively embrace mobile commerce, online shopping, and BOPIS and BOPAC out of a newfound shared desire for value, authenticity, and common sense.
A recent survey by McKinsey reports that fully 75% of consumers changed their shopping behavior over the past 24 months, that every generation is more price-sensitive and less loyal to product and retail brands than they used to be, and that convenience and reliable last-mile delivery have become more important than in-store promotions.
Nevertheless, while e-commerce may be a new common denominator, all age groups also say they expect to go back to shopping in stores more frequently after the pandemic than they did before. Clearly, we learned to love our omnichannel options during these tumultuous times, and it looks like many of our new habits are going to stick.
About CURA Resource Group
Going forward, retailers must offer competitive service and fulfillment choices to meet consumer expectations; there's no going back to the way things used to be, no matter what happens next.
Cura Group helps our clients navigate changing customer demands by building walk-in Sales Centers in strategically selected high-volume locations to distribute fast-moving inventory in underserved delivery areas.
Call us today to discuss a local distribution strategy that gets you closer to consumers and makes product access a more positive experience. We'll help you analyze how your customers shop and show you how physical fulfillment centers can bridge the gap between online and in-store sales for every generation.
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