Given the longstanding buzz among marketers about Millennials – and now Gen Z – the headline of this article may seem slightly… stale. But it’s nonetheless interesting to see that retail marketers are (continuing?) to shift their spending away from older generations and to younger ones, according to a report [pdf] from RetailMeNot.
The RetailMeNot study is based on an online survey conducted by Kelton Research among 209 marketing decision-makers who work at organizations that sell products both online and in physical retail locations.
There was vast agreement among respondents that marketing spending will increase this year, with almost 9 in 10 claiming that would be the case for them.
It appears that those budgets will increasingly be targeted at younger generations. Roughly two-thirds of respondents said they would increase their marketing spend targeting Gen Z (65%) and Millennials (68%). By comparison, fewer than half said they’d hike their spending focused on Baby Boomers (45%) and Seniors (38%).
Conversely, roughly one-quarter will be cutting spend focused on Baby Boomers (22%) and Seniors (27%), compared to 13% shrinking their budgets on Millennials and just 5% on Gen Z.
That seems to be well within the prevailing marketing industry trends. But there’s a debate to be had over the effectiveness of this thinking. The attention paid to younger generations – in an effort to tie up their brand loyalty for years to come – seems to stand in contradiction to financial realities.
Consider that Boomers and Seniors account for somewhere around half of CPG spending in the US, and roughly 70% of disposable income. Baby Boomers have a median income that’s more than twice as high as Millennials, a median net worth that’s more than 15 times higher, and an average monthly spend per household that’s more than 50% higher.
With those stats in mind, one wonders how retail marketers should weigh Millennials’ future brand loyalty against Baby Boomers’ current spending power…
Other Survey Highlights:
In other results from the RetailMeNot survey:
- Roughly 3 in 4 retailers will increase the number of deals and promotions they’ll be offering this year, with sales revenue increases the top measure of success;
- Some 86% of retailers will partner with websites and apps that focus on deals, cash back and loyalty;
- More than 6 in 10 will increase their direct media buying, and half plan to cut the amount of fraudulent advertising by reducing their programmatic spend; and
- An improved mobile checkout is the top area of implementation this year to try to positively affect sales growth.
The full study can be viewed here [pdf].