The NPD Group and the Jay H. Baker Retailing Center at the Wharton School of Business at University of Pennsylvania have collaborated on a study to determine generational differences in buying behaviors from Baby Boomers to their Millennial children. Here are three key trends they discovered.
The number of Boomers and older Gen Xers who are spending at omni-channel merchants (using a variety of channels, i.e. retail, mobile, online, etc) has grown significantly. Big box and department store retailers are most popular with this age segment because these are the stores they are used to spending with. Boomers have been shopping with these retailers for decades, they have built loyalty with them, maybe even have a credit card through them, and these retailers have grown their redemption capabilities as the general population trends have shifted online. This generational spend is a product of store loyalty transcending shopping channel. They are still going to the brand, whether online or in the mall.
Not surprisingly, the other end of the generational spending trend goes online. Millennials go to retailers that may only operate either online or on a mobile device. These brands include popular companies like Uber, Lyft, Groupon and other flash sites like Gilt. Younger shoppers are more comfortable online and even on their phone. They don’t have the same fear of credit card theft or WiFi security. They live on their phones, and find it more convenient and suited to their lifestyle to shop there.
Brick & Mortar Department & Specialty Stores
A less obvious, and perhaps more interesting trend, is which stores each generational segment goes to. Millennials tend to take a more complicated path, navigating specialty stores for each individual need. Whereas Boomers and Gen Xers tend to prefer more one-stop shopping with department stores and multi-purpose big box retailers like The Home Depot, Target, etc. Boomers also tend to shop a lot through a very old-fashioned channel: QVC. The ultimate one-stop shop, in a channel they are comfortable with.
Generational spending trends are important to understand because it gives us insight into how they think, and what areas of the economy they support.