Personalizing the customer experience is critical for retailers, especially during the holiday season, when they typically earn 40% of their annual revenue. A new report finds that tailoring their approach based on generation may be the key to success.
The holiday season is the busiest time of the year for most retailers, many of which earn approximately 40% (if not more) of their annual revenue during that period. The new 2017 Holiday Retail Outlook report — created with research and insights from Alliance Data card services, Epsilon, LoyaltyOne and Conversant — explores the top issues retailers are grappling with ahead of the season and includes some crucial details on how a customer’s birthday can dictate her shopping habits.
Thanks to shared life experiences and the evolution of technology, buying habits vary significantly by generation. And while the 2017 Holiday Retail Outlook report shows that customers of all ages are influenced by promotions, customer service and other factors, each age group weighs a unique set of store, product and technological attributes before heading to the register. With so much shopping happening during the all-important holiday period, understanding the thinking and behavior of each generation can mean the difference between a good and great financial year.
More than any other generation, millennials are changing the traditional path to success for retail businesses. Data reported in the Holiday Retail Outlook report shows that members of this group — ages 18 to 35 — are impacted by more factors than other age groups, weighing price and value alongside functional and emotional aspects of the shopping experience before determining where and how to spend their money.
According to the report, millennials rate recommendations from friends and family high on their list of influencers, and they source product information from a number of different places — with a heavy focus on technology. 75% said they are very likely to shop at a retailer if in-store technology is available, and 71% use their smartphones to look up product information while they are shopping in the store.
As millennials age and trade smaller purchases for major investments, Generation Z brings a new set of values and influences to the shopper journey. Members of this group — ages 6 to 20 — still make up a small portion of the overall holiday spend, but they are heavily influencing how others spend their budgets during the festive period.
According to the Holiday Retail Outlook report, 93% of those surveyed said Generation Z members influence purchasing decisions on categories including clothing, footwear, accessories and cosmetics. Members of this youngest shopping group are a pragmatic generation and share certain consumer characteristics with baby boomers and the older “silent generation” (those over age 71), particularly a strong consideration for quality and value.
Generation X also brings a unique perspective and set of expectations with them into the store. The Generational Perspective report from Alliance Data found that the group — younger than boomers but older than millennials — share millennials’ emphasis on availability of in-store technology and the general atmosphere, but place greater emphasis than any other generation on innovation that makes their lives, and shopping experiences, easier. In fact, 40% of those in Generation X say fast checkout is an important factor in their purchase decision. Speed and convenience now compete with price as priorities for these time-starved shoppers.
The Generational Perspective report also includes some cross-generational truths. When asked what influences consumers’ decisions on where to shop, payment security (89%), easy brand interactions (76%) and transparent promotions (71%) featured as priorities for everyone. Interviewees of all ages also ranked customer service highest when considering their memorable shopping experiences.
As the Holiday season approaches, the unique generational factors included in these reports can serve as foundational guides for delivering exceptional shopping experiences and relevant solutions that will build your brand and increase your wallet share.
Here are five tips for getting in sync with your customers, regardless of their generation.
- Turn customer interactions into memorable moments. Especially during peak holiday times, optimize in-store and online shopping experiences. Customers should be able to quickly navigate your brand, get through checkout and get on their way.
- Think quality over quantity. Use journey maps and data insights to identify and prioritize your customers’ most enjoyable — and most frustrating — experiences to inform marketing, merchandising and operational decisions.
- Maximize omnichannel effectiveness. Amp up online efforts early in the season, then add benefits like in-store pickup, easy gifting and other time-saving, feel-good benefits to drive last-minute impulse purchases.
- Aim for frictionless experiences. Understand which customer experiences have the biggest negative impact on shopper performance, and address those first.
- Activate frontline employees. Your employees have a direct effect on your customers’ experiences. Reward them for relationship-building actions like solving a customer problem or recommending products.
Caroline Papadatos is Senior Vice President of LoyaltyOne Global Solutions. She can be reached at email@example.com.