Todd Hale, Senior Vice President, Consumer & Shopper Insights, Nielsen
SUMMARY: Understanding shopping and media habits at different ages can help marketers optimize critical assortment, pricing, promotion and advertising decisions by crafting targeted strategies and niche offers that reflect deal propensity, trip frequency, channel predilection, average spend and media usage.
Generation: group of contemporaries; all of the people who were born at approximately the same time, considered as a group, and especially when considered as having shared interests and attitudes.
Observers of popular culture have long known that in large part, generations look alike, think alike, dress alike, vote alike, live alike, and share a similar attitude toward life and leisure activities. That theory certainly holds true for shopping. A recent Nielsen analysis of the four key generations revealed generationally consistent shopping habits that reflect diverse lifestyle preferences and economic habits.
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. High-earning Boomers have the largest annual dollar spend per household of any group, followed by GenX. Millennials don’t like to waste time in-store, shopping less often than other age cohorts but buying more per trip as a result.
Millennial and Gen X shoppers favor mass supercenters and mass merchandisers over more traditional formats like grocery or drug stores which remain a draw for the Greatest Generation and Boomers. When younger shoppers do check-in to a format, they make a big impression at checkout. Millennials topped the basket value list at grocery stores and mass supercenters, with Gen X taking top spending honors at mass merchandisers and drug stores. Millennials today represent the largest population segment—over 76 million strong—just slightly larger in number than the Boomer segment. The two groups together represent half of the U.S. population.
At club, dollar and convenience/gas channels, Boomers and the Greatest Generation populate the aisles more frequently, while younger shoppers offset fewer trips with bigger baskets.
Certain store banners hold a unique appeal for the younger generations, and Target is at the head of that retailing class. Target stores have managed to maintain a hip, trendy image with a strong value message with whimsical advertising; strong, almost pop art in-store merchandising; and a roster of high profile designers for everything from housewares (Michael Graves) to bedding (Todd Oldham) to women’s fashion (Mossimo) to cosmetics (Sonia Kashuk). And, with the interest in at-home meals, Target recently announced a new partnership with TV cook show host Giada De Laurentiis for a store-brand line of specialty food items and cookware.
Gen X and Millennials both patronize Target more often than other age cohorts, but also outspend them at Target, as well as at competitive mass merchandiser banners like Kmart and Walmart.
Research suggests that owning a pet can stave off loneliness and lower blood pressure. Apparently, the Greatest Generation got the message, which may account for the average $198 in annual spending among pet food buyers in these households. An analysis of a selected sample of categories where there were big differences in annual spend across the generations showed gaps between the gaps. The next largest spending categories for seniors were wine at $124 per year and vitamins at $107 per year.
For these selected categories, Boomers spent even more on pet food ($211 per year), followed by carbonated beverages ($140/year) and wine ($125/year). Pet food also topped the list for Gen X at $148 per year, with carbonated beverages a close second among big dollar categories at $134 per year and baby food in third position at $127 annually. Millennials and their young families placed baby food in the top spot with annual outlays of $170 per household, followed by carbonated beverages ($116/year) and pet food ($112/year).
Pleasure or Pain
A Nielsen survey identified that most households (53%) have favorable attitudes toward grocery shopping while 38% consider it a chore. Retailers take note: interesting generational differences exist, which can help uncover ways to extend their time in the aisles.
It is an interesting dichotomy that 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, who 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.
Planning and Price
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 half 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 Gen 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.
Dining and Dollars
When asked how the economic downturn had impacted meal time, more than 40% of respondents mentioned consuming fewer carry-out or home-delivered meals, or increasing the use of private label foods. One-third or more of those surveyed now incorporate more basic ingredients in meals and buy the produce that is in season, fresher and less expensive.
More than one-quarter prepare large quantities of food that can be eaten throughout the week, reduce the number of desserts served and opt to brew their own coffee at home. Nearly one-quarter mentioned serving healthier meals. The Greatest Generation and Boomers were the groups most likely to purchase seasonal produce and serve healthier meals, while Gen X and Millennials cut down on carry-outs and home delivery while stocking up on private label.
Media and meals
Consistently across the board and across the generations, people turned to cookbooks, the Internet and television for recipe ideas and less expensive in-home entertainment as budget-conserving options. Millennials were the most wired into the Internet, while Gen X favored cooking programs and the Greatest Generation paged through cookbooks.
On average, the typical American consumes more than 35 hours of media per week across the three screens—TV, Internet and mobile. As smartphones redefine customer media interaction, they present enormous potential for generating buzz around products, delivering timely product info and coupon codes, and building community through brand advocacy.
So what is the best way to reach each generation and capitalize on their unique shopping interests and needs? Here are some suggestions:
Greatest Generation: freebies and senior discounts to appeal to their value orientation. Special products addressing aging issues; special packs for smaller households. Better signage, more forgiving package design, on-shelf or on-cart magnifying glasses. These savvy shoppers spend most of their online time using email and message boards, providing two ready avenues for delivering targeted offers and initiating value-add discussions about health issues and special wellness programs.
Boomers: keep these big spenders happy with monthly or quarterly cash-back savings programs that reflect spending levels. Pursue the up-sell into prescription medications, insurance, gifts for grandkids and kids, entertainment, travel, even discount wines by the case. Comprising more than one-third of the Internet population, Boomers are big online shoppers, comfortable using email and messaging to stay in touch. Twitter is a huge untapped outlet for reaching Boomers, who increased utilization 469% during 2009. Reach one and you reach their entire follower base with product info and special offers.
Gen X: time is a precious commodity for these busy young families, so reduce deadline pressure by offering meal planning and deals, school supplies and little indulgences like lattes to make shopping less onerous. Child care activity centers or computer kiosks keep kids engaged while parents shop. In-store cooking or craft classes offer family fun and a reason to increase the trip count. More than 80% of X-ers are online checking out Facebook, MySpace and Twitter, shopping and price checking online and texting or emailing friends. Deliver quick hit info and offers using new media for fast results.
Millennials: consider upgrading piped-in music to current hits to attract contemporary shoppers. Coffee stations with battery chargers and in-store WiFi let them kick back and review Internet or mobile coupons and shopping lists. Convert their need for immediate gratification into impulse buy sales with enticing end caps and front of store bins. These visually-oriented shoppers will Tweet and text about special deals real time from the store aisles about what looks good today, where to meet-up, and anything cool that catches their eye on site. If you’re lucky, you’ll hit a quirky Millennial sweet spot, and they’ll YouTube or Hulu a video of a helpful employee or unusual in-store promotion.