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The Generation Gap in Loyalty Marketing

Photo: Courtesy of Samuel Daniel

There are certainly universal behaviors among shoppers, regardless of age — not to mention universal ways retailers should provide a great customer experience. No one likes a disorganized store or an online checkout process that moves at a snail’s pace, for example.

But understanding similarities and differences in the habits of different age groups can give marketers an advantage. They must do much more than create a single approach, instead tailoring communications, loyalty models, delivery of goods and the overall shopper journey. Particularly, they must pay attention to the often-overshadowed baby boomer generation, which according to some estimates controls about 70 percent of disposable income in the United States.

An untapped market

A study recently explored how we shop and what it means for retailers, marketers and loyalty programs in a proprietary survey of 4,500 North American consumers, as well as an extensive review of existing demographic, census, retail and consumer-behavior research.

For the purposes of the study, boomers are defined as age 52 to 65 — a group that numbers 75.4 million, according to the U.S. Census Bureau, and makes up 20 percent of the U.S. population. They have the highest expendable income of all generations. They are more likely to have their homes paid off, are often empty-nesters and aren’t steeped in student loans as are many Millennials and Generation Xers.

Know your shopper

Boomers are confident shoppers and can be demanding. Just 27 percent of boomers agree with the statement “I think shopping is a great way to relax” — well below other groups. They place higher value than all other age groups on an easy-access location, easy-to-navigate stores and clear return policies.

Just 12 percent rely on family and friends to help decide on a purchase. At 84 percent, boomers easily top all groups in preferring to shop in-store. They are the only generation that doesn’t prioritize buying brands they used while growing up. Just under 70 percent say the word that best describes their experience in a loyalty program is “economical,” versus 52 percent for Millennials.

Clearly, most retailers can’t compete if they cater solely to one demographic; they need a thoughtful strategy that addresses a variety of consumer needs while deftly recognizing differences between the generations. Nonetheless, retailers that fail to recognize issues unique to boomers could watch those shoppers walk right out the door empty-handed.

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