Diving In: Generational Shopping Patterns

Jenn Reichenbacher |

November 19, 2013

Generational Shopping Patterns

Shopping decisions can seem almost arbitrary on an individual basis, but with a wider angle and a deeper perspective, sweeping trends emerge. One of the most notable divisions in shopping habits is along age lines; baby boomers, Generation X and the millennial buyers between them show major differences in how and what they buy. Understanding your customer base and plugging in to what your ideal shopper wants through better knowledge of generational shopping patterns can boost sales by helping you reach your customers in more effective ways.

The Baby Boomers

After World War II, the country experienced a tremendous surge in population from 1946 to 1964. This phenomenon, the Baby Boom, led to a demographic wave that changed the shape of the nation as it passed. In the 1960s, the first baby boomers were a large part of the vast social changes that created a thriving counterculture and shifted politics in ways that still affect the country today. Recently, the first boomers reached retirement age, and according to the American Association of Retired Persons, or AARP, another 8,000 members of this generation retire each day.

The sheer size of this demographic has changed sales and marketing as surely as it has altered the social and political landscape. People who grew up during the 1950s and came of age in the turbulent 1960s witnessed the rise of fast food, a significant increase in leisure time, a burgeoning entertainment market and an increase in disposable goods. They became used to time-savers that previous generations didn't have; disposable diapers, frozen dinners and dishwashers became commonplace for them. This was the first generation to embrace convenience and a consumer-oriented lifestyle. For marketers and product development teams, the baby boom generation has been the target demographic for campaigns touting new and improved products, ease of use and accessibility.

Another characteristic of baby boomers is the relative affluence in which they came of age. They typically grew up in households with single incomes; day care was rare because few households needed a double income to support the family. College tuition was within reach of the majority of families. Products that were once signals of wealth, such as new cars and televisions, became the norm for middle-class and working-class households. They enjoyed a stronger safety net than previous generations had as well; the expansion of Social Security and better funding for public schools broadened the middle class.

Although they're reaching retirement age in record numbers, many baby boomers today aren't ready to retire, according to a report published in CRM Magazine. Some boomers don't plan to retire for decades after the typical retirement age of 65. While part of that may be due to the recession of the early 21st century, another reason may be the greater longevity and health that boomers have enjoyed over previous generations. As the beneficiaries of water fluoridation, smoking cessation programs and advances in medical technology, people are staying healthy enough to work well past retirement age.

Baby boomers are more willing to spend than previous generations that witnessed the Great Depression and World War II. Demographic data from the Nielsen organization points to frequent-shopper programs, up-selling and shopping incentives as especially attractive options for baby boomers. This generation grew up with novelty and convenience on supermarket shelves, and they have carried these shopping habits with them.

At the same time, recently retired or soon-to-retire boomers may have less available income for luxury products. Spending tends to decrease after age 50, possibly because people who have accumulated years of creature comforts and household luxuries no longer aspire to what they already own. While they may not spend for themselves, many boomers are willing to invest for their children and grandchildren. They welcome high-value, low-cost offers on discounted travel opportunities, quality pre-owned cars and housing improvements that increase resale value.

The Nielsen poll also found that boomers appreciate certain product categories more than other generations. Retirement planning and health care are certainly growth industries for boomers, but not every category is so straightforward. They also spend more on pet supplies, wine and soft drinks than any other group. They like to look for deals but aren't averse to spending when they see something they truly like.

Generation X

Babies born between 1965 and 1976 became known as generation X because demographics experts weren't sure at first what to make of them. On the one hand, gen-X babies enjoyed even more convenience and entertainment options than their parents and enjoyed the relative affluence of the 1980s during their formative years. On the other hand, they weathered economic downturns at the turn of the millennium and became sandwiched between caring for aging parents and raising their own families. Largely college educated, generation X is the first in which dual-income households are the norm.

In the Journal of Social History, author Elizabeth Rose describes how daycare moved from help for families in the grip of poverty to an early education for the children of affluence by the early 1960s. Today, childcare is considered an essential expense for many generation X families. With both parents at work, daycare and finding a good preschool became priorities, and many members of this generation still help support their kids as they continue their education.

If the baby boomers were weaned on convenience, generation X grew up on technology. The first home computers and video game consoles appeared in generation X households, and although millennials are the first digital natives, gen-X members were the technological pioneers. As the first generation of latchkey kids, members of this demographic watched more television than their parents and became familiar with computers and the nascent game industry. Today, they remain tech-savvy and interested in the latest wave of consumer electronics. They devote a large portion of their available incomes to state-of-the-art home theaters, surround sound systems and game consoles.

Although many in generation X were too young to remember the Watergate trials when they happened, they grew up with it, the Iran-Contra talks, the Enron scandal and other high-profile cases of corporate or government malfeasance that instilled a lasting skepticism in them. They turn away from advertising hyperbole and find marketing messages that aren't overly slick more appealing than those that are full of hype. Forthrightness, transparency and money-back guarantees are important selling propositions to cautious, skeptical gen-X buyers.

This generation is less status-conscious and more engaged with finding a good value, suggests the Nielsen poll. They are the largest buyers at big box stores and would rather get a good deal than make a social statement with their purchases. For generation X, a drugstore cosmetic that's as effective as department store brands is preferable even if the product isn't wrapped in a status-symbol case.

The Millennial Generation

Born between 1977 and 1994, the millennial generation came of age at the turn of the century. The first true digital natives, they are a confusing generation for marketing theorists because they're so diverse. The roughly 72 million millennials are the best-educated generation in American history, yet they have already faced some of the highest unemployment rates and the greatest drop in job security in decades. They're cautious spenders in some areas and lavish spenders in others. They love novelty, but they also respond to tradition.

While generation X was the first to experience technological innovation as a new force shaping their buying decisions, millennials take it as a given. They grew up with computers, and younger millennials don't remember a time in which land lines were more common than cell phones. Parents regularly come to their millennial sons and daughters for aid in deciphering their smartphones, establishing a WiFi connection or adding peripherals. For retailers, selling to millennials via leading-edge technology channels is critical. They look to social media sites, online reviews and user comments for many of their biggest buying decisions. Like generation X before them, though, they aren't naïve and can quickly spot a fraud. The famously fake All I Want for Christmas Is a PSP viral ad campaign from Sony is still a cautionary tale for marketers who try to reach millennials with an inauthentic message.

Like previous generations, millennial parents want the best for their kids, but they have a slightly different set of values than their parents. Instead of going for convenience and novelty, they reach for socially and environmentally conscious products. Recycled materials, natural products and organic ingredients are major selling points for millennial shoppers. While they appreciate technology, they like to surround themselves with natural materials in interior design.

Technology has shortened the gap between wanting a product and getting it. Throughout their lifetimes, members of the millennial generation have seen time investments shorten. Microwaves get dinner on the table in minutes. DVRs let them fast forward through ads. Google and other search engines let them find answers to questions instantly. They're less willing than previous generations to wait for long lead times or delayed gratification, so speed is crucial when serving a millennial customer base. Impulse buys and two-for-one deals appeal to their desire to have it now. For online retailers, offering short turnaround times is vital.

Customers are also individuals, and not everyone will fit a given generational mold. Understanding the forces that shaped each generation, though, can help marketers refine their approaches to their ideal customer base.