Younger Shoppers Buy More, Less Often
Younger shoppers are likely to purchase more items in fewer, larger trips, according to research from The Nielsen Company.
Todd Hale, SVP, consumer and shopping insights, Nielsen, has compiled a list of tips on devising retail marketing strategies specific to each major generation of the US population. Hale defines the US as currently consisting of four significant generational categories representing residents age 15 and older:
- Greatest Generation: born prior to 1946. (65-plus)
- Boomers: 1946-1964 (45-63)
- Generation X: 1965-1976 (33-44)
- Millennials: 1977-1994 (15-32)
The Older You Are, the More You Shop (for Discounts)
The Greatest Generation members, shaped by the Great Depression and World War II frugality, are the most frequent shoppers and more deal-prone than other age segments. In the 52 weeks ended September 12, 2009, the Greatest Generation averaged the highest number of shopping trips per household, approximately 200. This number declined with each descending generation, dropping to about 175 for Boomers, 150 for Generation X, and 140 for Millennials.
In addition, the Greatest Generation devoted about 27% of their retail spending dollars to deals, compared to about 23% of Boomers, 20% of Generation X, and 18% of Millennials.
Millennials Spend Most per Trip
The amount of money each generation spends per shopping trip is inverse to the frequency with which they shop. Millennials had the highest basket ring dollars per trip, about $53, closely followed by Generation X, about $52. Boomers’ average basket ring per trip was about $45, with the Greatest Generation averaging about $38.
Despite spending the most per shopping trip, Millennials averaged the second-lowest basket ring dollars per household, about $6,000, with the Greatest Generation averaging the lowest, about $5,500. Boomers led all generations with average basket ring dollars per household of about $8,000, followed by Generation X at about $7,000.
Younger Shoppers Spend More per Trip in Four Key Channels
Millennials and Generation X spent more money per shopping trip in four key retail channels: grocery stores, mass supercenters, mass merchandisers, and drug stores.
Millennials had the highest average basket ring dollars per trip at grocery stores (about $50) and mass supercenters (about $75). Generation X spent an average of about $48 and $70 in these two categories, respectively.
Generation X had the highest average basket ring dollars per trip at mass merchandisers (about $60) and drug stores (about $28). Millennials followed with average basket ring dollars of about $55 and $25, respectively. The Greatest Generation spent the least per trip and Boomers spent the second-least per trip in each category.
In the mass merchandiser segment, Generation X and Millennials favor Target more than other brands, followed by Kmart and Wal-Mart.
Generations Spend in Different Categories
In nine key “big gap” categories, Boomers led average annual spending among generations in three: carbonated beverages ($140), pet food ($211), and wine ($125). Generation X also led average annual spending categories: cereal ($92), detergents ($59), and hair care ($45). The Greatest Generation led in vitamins ($107) and ice cream ($41). Millennials only led in baby food ($170).
Targeting Generations In-store
The Greatest Generation is less likely to enjoy shopping than any other age cohort, with the most respondents rating shopping as a chore, and yet also the most likely to walk up and down each aisle on a shopping trip, thus extending their time in-store. Merchandising opportunities to pepper products that appeal to older consumers should be pursued.
Conversely, the Millennial generation, which makes the fewest trips to virtually any format, really likes shopping. On a typical mission, they know how to find what they need and are less likely to shop the entire store. Engaging this “in and out” shopper with products such as music or other in-store entertainment could extend their time in stores and get them to shop more aisles.
Investigating an array of different consumer shopping practices and strategies, Nielsen determined that shoppers in these economic times are proving to be rational consumers, with more than 50% relying on shopping lists and consistently comparing the unit price for a product. Other ways consumers attempt to eke value out of a shopping trip include using the store circular to identify sale items and redeeming coupons, a practice that has spiked in popularity thanks to the advent of electronic and mobile coupons.
While Generation X and Millennials claimed the highest coupon redemption rates and were among the most likely to use shopping lists for most trips, they also admitted to making the most unplanned purchases on their shopping excursions. Younger shoppers tended to bring children with them more often than others, were less likely to ask for advice from meat or produce department personnel and, in the case of Millennials, very likely to bring another adult along on most outings.
Boomers Present Marketing Challenges, Opportunities
Marketers seeking to promote products and services to the Baby Boom generation would do well to remember that Boomers are still vital and evolving even as they approach retirement age, according to Dr. Bob Deutsch of marketing firm Brain Sells.
Deutsch suggests that marketers recognize the three basic life structures of Boomers: identity, territoriality, and time. Boomers’ identity is essentially optimistic, meaning they have a vitality which makes them survivors, if not thrivers.
Furthermore, as Boomers age, home range will become more important, and getting settled in new spaces, such as a smaller, closer-to-town abode or a move to a warmer climate, will require adaptation to new interpersonal and larger social arrangements. And as people age their nostalgic yearnings grow, making them more receptive to advertisers and marketers use of what researchers call a “longing for positive memories of the past.”