There are number of factors that go into consumer buying decisions – including price, usefulness, and positioning of the item in a store or on a website. And research trends indicate that in addition to defining their attitudes and experiences, the generation a consumer was born into plays a role in the individual’s buying behaviors, according to the National Retail Federation Foundation (NRFF).
“Though individuals have distinct characteristics, researchers are continuing to identify common behaviors and attitudes within generational groups,” according to the NRFF’s report, “Across the Ages: The Generational Impact on Spending.”
Typically, Millennials (1981-1995) are considered the hot consumer segment, but this year the retailers that court the Baby Boomers (1946-1964) and Generation Xers (1965-1980) will have the most profitable holiday season, according to Pam Goodfellow, Principal Analyst and Consumer Insights Director for Prosper Insights & Analytics.
Baby Boomers are expected to spend $43.3 billion, or 32 percent of the total gift spending this holiday season and Gen Xers are projected to spend $46.6 billion on gifts, or 35 percent of the total spend – combined that’s 67 percent of total gift spending this holiday season.
Millennials, on the other hand, are expected to spend $24.6 billion or 18 percent of the total holiday gift spending this year. The Silent Generation (before 1946) is expected to spend $20.6 billion or 15 percent of the planned 2014 holiday gift spending.
In addition, the year-over-year holiday outlook for Boomers and Gen Xers shoppers has improved, while the outlook for spending among Millennials has remained relatively flat, Goodfellow said.
Here is our own visualization analyzing shopping trends from Black Friday 2014.
According to the NRFF report:
- Less than one in four consumers in Generation X consider the newest trends and styles personally important when it comes to shopping for clothing. Most Gen Xers are more focused on traditional, conservative looks.
- Even when the Silent Generation was young, they lived by the motto, “waste not, want not.” To move consumers in this group toward a purchase, it’s important for retailers to stress practicality and necessity.
- Seventy-five percent of the Boomer generation consider low prices “very important” when shopping online. The economic recession has been particularly challenging on Boomer retirement plans and careers, and this has had a lasting influence on how they shop online.
- Not all consumers are turned on by a “low price” strategy. More than one in five Millennials don’t consider sales most important when shopping for clothing.
- Nearly half of Millennials are trying to making more practical choices in their overall spending – and that most likely means fewer impulse buys at the mall, or even fewer shopping trips entirely.
“For a consumer to eventually choose to shop and spend money – from any generation and at any company – it boils down to past experiences: how they feel about the economy, their money-spending lifestyles and how they place value in items they’re shopping for,” according to the NRF.
Looking at consumers in terms of their dates of birth can help retailers and marketers understand – and capitalize on – customer behavior by learning about who they’re selling to and how best to reach them.