Loyalty by Generation

July 12, 2017

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Understanding the similarities and differences in shopper behavior, regardless of age, can be a game-changer for retailers and loyalty marketers, presenting opportunities to rethink the customer experience from start to finish.

Whether they are 20 years old or 80, in some ways, consumers are all alike. No one wants to shop in a disorganized store, be ignored by sales staff, come up empty-handed when looking for their favorite product or be pestered with irrelevant communications and offers.

On the other hand, there are ways in which consumers in different demographics behave and think differently, with some shopping habits and attitudes more pronounced among certain groups. The frequently talked-about and courted millennials, for example, are far more likely than shoppers in any other group to voice an opinion on social media when they have a negative experience.

A hallmark of the millennial generation – typically classified as those age 22 to 35 – is its reliance on the opinions of others to inform shopping habits, more so than any other demographic. In the Shopping by Generation research report, COLLOQUY found 32% of millennials strongly agreed with the statement “I rely on friends and family for advice on what to purchase,” compared with only 12% of baby boomers. Studies by the National Retail Federation and Boston Consulting Group, among others, have found millennials trust user-generated reviews and word of mouth much more than traditional media and advertising.

When it comes to developing loyalty to or interest in a company, younger generations tend to seek opinions and recommendations from members of their inner circle as well as from trusted online sources more than from a company or retail service itself (such as retail staff, advertising or celebrity endorsements). Looking for unbiased opinions and recommendations, millennials are moving into authentic sharing of information, whether it is positive or negative, and rely more on alternative sources of content when making a decision to interact with a brand. This could include sources such as social media posts, vloggers (video bloggers), brand ambassadors and the like.

The LoyaltyOne 2016 Negative CX and Word of Mouth Study unveiled some additional insights:

 

  • Millennials trust vloggers more than those in older demographics do: 45% of younger millennials, age 18 to 24, trust them and 40% of older millennials, age 25 to 34, do. This is a marked increase from the 34% of those 35 to 44 and 25% of those 45 to 64.
  • Meanwhile, 54% of older millennials feel indifferent toward advertising, and 21% distrust advertising altogether.
  • Even though 25% of younger millennials trust retail staff, 59% are indifferent about the impact of staff on their decisions.

Understanding the implications of generational shopping differences can be a game-changer for retailers and loyalty marketers, presenting opportunities to craft better communications, adjust the online and in-store shopper journeys and rethink the customer experience from start to finish.

One example: Boomers value one-to-one customer service. The Negative CX and Word of Mouth study found that if they felt a sales associate did not appreciate their business, 54% of boomers said they were unlikely to return to that store; only 33% of millennials said the same. If making a return in-store was too much of a hassle, 54% of boomers would be unlikely to return, while only 32% of millennials said the same.

Millennials get more credit than other demographics for embracing technology; the implication that they are the only ones who use it to be savvy consumers is not only unfair but is also untrue. Multiple studies have confirmed that technology matters plenty to shoppers of every age, and smartphones have become ubiquitous for everyone. The Nielsen Generational Lifestyles Survey found that 52% of boomers around the world spend their mealtimes distracted by electronic devices. Forrester Research, in its report The Kids Are Overrated, postulated that the biggest myth about millennials is that technology makes them fundamentally different from other generations. Indeed, the report found, major disruptive changes created by technology span all generations, and even many boomers have embraced these changes.

But for all the hoops the media and retailers jump through to court millennials, this generation also endures plenty of criticism and misunderstanding. Millennials are often characterized as lazy, detached, financially unaware and a host of other insults that are generally far from reality. Let’s ditch the stereotypes and dig in to understand all customers – boomers, millennials, Generation X or the under-22 Generation Z.

Even within a demographic group, there’s never total cohesion; to ignore that misses important nuances. I’m technically a baby boomer, having been born at the tail end of that generation, but in many ways, I feel worlds apart from my aunts and uncles at the other end of the generation.

To gain a better understanding of how generational data can influence consumer habits, here are few things to remember:

Refine communications. Research by LoyaltyOne and others has shown that bombarding customers with irrelevant messaging is annoying at best and drives customers away at worst. Generational differences are at play even here: Despite being heavily studied and targeted with refined marketing, 71% of older millennials (25 to 34) report receiving too many irrelevant communications; 77% say they usually just ignore it. Use thoughtful data analytics and loyalty efforts to constantly refine your communications.

Ask questions. There’s a real opportunity to share information, dig deeper and ask better questions to improve the entire customer experience. Look for ways your customers, of every generation, can share their experiences and learn from each other – to your brand’s benefit, as well. This could take the form of shopper panels, crowdsourcing tactics, multigenerational in-store events, social media campaigns or gamification in your loyalty program.

Don’t assume. You might be surprised to learn that millennials are the most hesitant of all demographics to try new brands. They’re also the most likely to use the brands their parents used, even though this “things were better then” mindset is more often attributed to boomers. And coupon clippers? You might think it’s upper-boomer Aunt Rose, but LoyaltyOne research found millennials use coupons more than any other age group, with 39% saying they use them frequently for regular brand purchases. As for who is making purchasing decisions, don’t make assumptions there, either. Mom might be paying for an item at Abercrombie or Hollister, but make no mistake: Her son or daughter is calling the shots in selecting what to buy.

In its Debunking the Millennial Myth report, LoyaltyOne emphasizes that a smart retail strategy is built on being curious about understanding consumers of all ages. Deep insights can only be won by crafting a strategy built on customer-centric loyalty programs that make use of a robust ecosystem of data sources. These must include behavioral data (where, how and how often they shop); attitudinal data (perceptions give context); point-of-sale or SKU data (which inform assortment and pricing decisions); and non-transactional data (how customers engage with companies beyond their purchases).

It comes down to this: Key customer learnings emerge when we look past stereotypes of how ages and genders are thought to behave and use data to make sound judgments to understand the shopping preferences of customers. Whether they’re age 20 or 80, customers’ similarities and differences are not to be overlooked and can help brands strengthen their offerings for the future.

 

Customer Experience

Loyalty

Retail

CX

COLLOQUY Speaks

COLLOQUY Speaks is a part of LoyaltyOne’s thought leadership platform that offers research and insights on loyalty and customer experience industry trends, as well as best-in-class content from LoyaltyOne and other industry-leading experts. 

Learn more about Colloquy

Loyalty by Generation

Aug 27, 2018, 14:00 PM
Understanding the similarities and differences in shopper behavior, regardless of age, can be a game-changer...
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Understanding the similarities and differences in shopper behavior, regardless of age, can be a game-changer for retailers and loyalty marketers, presenting opportunities to rethink the customer experience from start to finish.

Whether they are 20 years old or 80, in some ways, consumers are all alike. No one wants to shop in a disorganized store, be ignored by sales staff, come up empty-handed when looking for their favorite product or be pestered with irrelevant communications and offers.

On the other hand, there are ways in which consumers in different demographics behave and think differently, with some shopping habits and attitudes more pronounced among certain groups. The frequently talked-about and courted millennials, for example, are far more likely than shoppers in any other group to voice an opinion on social media when they have a negative experience.

A hallmark of the millennial generation – typically classified as those age 22 to 35 – is its reliance on the opinions of others to inform shopping habits, more so than any other demographic. In the Shopping by Generation research report, COLLOQUY found 32% of millennials strongly agreed with the statement “I rely on friends and family for advice on what to purchase,” compared with only 12% of baby boomers. Studies by the National Retail Federation and Boston Consulting Group, among others, have found millennials trust user-generated reviews and word of mouth much more than traditional media and advertising.

When it comes to developing loyalty to or interest in a company, younger generations tend to seek opinions and recommendations from members of their inner circle as well as from trusted online sources more than from a company or retail service itself (such as retail staff, advertising or celebrity endorsements). Looking for unbiased opinions and recommendations, millennials are moving into authentic sharing of information, whether it is positive or negative, and rely more on alternative sources of content when making a decision to interact with a brand. This could include sources such as social media posts, vloggers (video bloggers), brand ambassadors and the like.

The LoyaltyOne 2016 Negative CX and Word of Mouth Study unveiled some additional insights:

 

  • Millennials trust vloggers more than those in older demographics do: 45% of younger millennials, age 18 to 24, trust them and 40% of older millennials, age 25 to 34, do. This is a marked increase from the 34% of those 35 to 44 and 25% of those 45 to 64.
  • Meanwhile, 54% of older millennials feel indifferent toward advertising, and 21% distrust advertising altogether.
  • Even though 25% of younger millennials trust retail staff, 59% are indifferent about the impact of staff on their decisions.

Understanding the implications of generational shopping differences can be a game-changer for retailers and loyalty marketers, presenting opportunities to craft better communications, adjust the online and in-store shopper journeys and rethink the customer experience from start to finish.

One example: Boomers value one-to-one customer service. The Negative CX and Word of Mouth study found that if they felt a sales associate did not appreciate their business, 54% of boomers said they were unlikely to return to that store; only 33% of millennials said the same. If making a return in-store was too much of a hassle, 54% of boomers would be unlikely to return, while only 32% of millennials said the same.

Millennials get more credit than other demographics for embracing technology; the implication that they are the only ones who use it to be savvy consumers is not only unfair but is also untrue. Multiple studies have confirmed that technology matters plenty to shoppers of every age, and smartphones have become ubiquitous for everyone. The Nielsen Generational Lifestyles Survey found that 52% of boomers around the world spend their mealtimes distracted by electronic devices. Forrester Research, in its report The Kids Are Overrated, postulated that the biggest myth about millennials is that technology makes them fundamentally different from other generations. Indeed, the report found, major disruptive changes created by technology span all generations, and even many boomers have embraced these changes.

But for all the hoops the media and retailers jump through to court millennials, this generation also endures plenty of criticism and misunderstanding. Millennials are often characterized as lazy, detached, financially unaware and a host of other insults that are generally far from reality. Let’s ditch the stereotypes and dig in to understand all customers – boomers, millennials, Generation X or the under-22 Generation Z.

Even within a demographic group, there’s never total cohesion; to ignore that misses important nuances. I’m technically a baby boomer, having been born at the tail end of that generation, but in many ways, I feel worlds apart from my aunts and uncles at the other end of the generation.

To gain a better understanding of how generational data can influence consumer habits, here are few things to remember:

Refine communications. Research by LoyaltyOne and others has shown that bombarding customers with irrelevant messaging is annoying at best and drives customers away at worst. Generational differences are at play even here: Despite being heavily studied and targeted with refined marketing, 71% of older millennials (25 to 34) report receiving too many irrelevant communications; 77% say they usually just ignore it. Use thoughtful data analytics and loyalty efforts to constantly refine your communications.

Ask questions. There’s a real opportunity to share information, dig deeper and ask better questions to improve the entire customer experience. Look for ways your customers, of every generation, can share their experiences and learn from each other – to your brand’s benefit, as well. This could take the form of shopper panels, crowdsourcing tactics, multigenerational in-store events, social media campaigns or gamification in your loyalty program.

Don’t assume. You might be surprised to learn that millennials are the most hesitant of all demographics to try new brands. They’re also the most likely to use the brands their parents used, even though this “things were better then” mindset is more often attributed to boomers. And coupon clippers? You might think it’s upper-boomer Aunt Rose, but LoyaltyOne research found millennials use coupons more than any other age group, with 39% saying they use them frequently for regular brand purchases. As for who is making purchasing decisions, don’t make assumptions there, either. Mom might be paying for an item at Abercrombie or Hollister, but make no mistake: Her son or daughter is calling the shots in selecting what to buy.

In its Debunking the Millennial Myth report, LoyaltyOne emphasizes that a smart retail strategy is built on being curious about understanding consumers of all ages. Deep insights can only be won by crafting a strategy built on customer-centric loyalty programs that make use of a robust ecosystem of data sources. These must include behavioral data (where, how and how often they shop); attitudinal data (perceptions give context); point-of-sale or SKU data (which inform assortment and pricing decisions); and non-transactional data (how customers engage with companies beyond their purchases).

It comes down to this: Key customer learnings emerge when we look past stereotypes of how ages and genders are thought to behave and use data to make sound judgments to understand the shopping preferences of customers. Whether they’re age 20 or 80, customers’ similarities and differences are not to be overlooked and can help brands strengthen their offerings for the future.

 

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