Consumer Behaviour

Gen X, Gen Y, and The Elderly: Impact on Retail

Elderly

General: Idealist• Born between 1945 and 1964: most of today’s world leaders

and executives.• The fastest growing segment of the population.• They perceive themselves as younger than their years –

(cognitive age versus chronological age).

Consumer Behaviour• Households are small and their need for new purchases is

limited.• Enjoy convenience in the marketplace and appreciate their

leisure time.• Although brand loyal, they only tend to try new products or

brands if given good reasons to do so.• Enjoy buying for themselves, for their homes, and for others.

Generation X

General: Reactive• Those born between 1965 and 1977 (40 million people).• First too be deeply affected by divorce, saw their families

encounter several periods of economic turbulence.• Are now young adults who are driving the new hi-tech

economy, forming families, and becoming an increasingly positive economic force.

• Look for a balance between work and leisure.

Consumer Behaviour• Distrustful to marketing.• Not drawn to traditional forms of advertising (i.e. hyping up

products).• Express their need to stay in control by purchasing.

communications equipment such as fax machines, e-mail, and mobile phones.

• Do not like labels, are cynical and do not want to be singled out and marketed to.

Generation YGeneral: Civic

• Primarily the offspring of the Baby Boomers.• Pragmatic and hard working, with emphasis on independence and individuality.• Economically more optimistic than previous generations, holding a positive outlook as a result of growing

up in a time of prosperity.

Consumer Behaviour• Remarkably sophisticated consumers with a high level of brand awareness.• And they are healthy spenders.• Their parents make all the important decisions. • Tend to think of their image before purchase any product.• Disloyal to brands but highly loyal to relationships.• Most influenced by friends and peers.• Short attention span.

One Example To Sum It Up

Differences Relevant to a Retailer

PARAMETER

GEN X GEN Y ELDERLY

Consumer Type Sincerity appeals Smart (aware) consumer Motivated Consumer

Role in family Decision makers and Information Gatherers Strong Influencers Decision Maker

Media Habits TV strongest medium TV, Internet Newspapers a widespread medium

Purchase Behaviour Materialistic/cynical Savvy ,Pragmatic Narcissist, Consumption Oriented

Technology Use technology Assume technology Have technology

Price – Quality Price Oriented Value oriented Conspicuous Consumption

Attitude towards Brand Rebel against hype Rebel against hype Respond to image building

type

Loyalty Not really: Attitude of getting the best deal As long as convenient Brand Loyal

Diversity Accept Celebrate As a cause

Shopping Behaviour Self reliant / individualistic

Self-inventive / individualistic Mass movement

Appealing themes/ Products

Beverages, snacks, footwear and music

Entertainment / Clothes and accessories, health

Groceries, household necessities

Case Studies in Retail

Gen-X• Amazon.com - No nonsense retailer which appeals to the generations use of different

media and value

Gen-Y• Apple - Most admired brand by Gen-Y, So clean and simple and easy to use, No excess

Elderly• Harley Davidson - The ultimate luxury, also a statement of freedom and lost youthfulness

Gen-X• Amazon.com - No nonsense retailer which appeals to the generations use of different

media and value

Gen-Y• Apple - Most admired brand by Gen-Y, So clean and simple and easy to use, No excess

Elderly• Harley Davidson - The ultimate luxury, also a statement of freedom and lost youthfulness

Step ElderlyGeneration

XGeneration

Y

Problem Recognition

Only resort to necessary purchases, less exotic or

luxury items, simpler lifestyles

Self-aware, will try to upgrade lifestyles, but still

conservative

More self-aware and more interested in maintenance

and recent trends

Information Search

Extensive in case of high-involvement or high-risk

products

Rely on traditional ATL advertising (TV ads) plus the Internet, occasionally seek

peer groups

Extensive across categories, seek

information on Internet, from peer groups

Alternative Evaluation

and Selection

No interest in fashion, high-end items must

represent value for money

Less interested in trends and more stinted in overall

spending

Spend more freely and show more interest in

fashion and style

Outlet Selection and

Purchase

Prefer locations that give good buys and encourage touch-and-feel i.e. where they can get a better first-

hand experience

Trade off between time spent shopping and desire to make a good buy. A mix of multi-brand outlets and

convenience stores.

Prefer exclusive outlets for up –market items such as

durables due to their exclusivity, but otherwise prioritize convenience and

reduced shopping time

Post-Purchase Processes

Likely to grudge purchases that are not necessary or

value for money

Moderate dissonance, even on reasonable purchases

Less likely to experience dissonance due to self-

confidence and extensive information search

Step in Decision Model Key Trait or Constraint for Retailer

Problem Recognition Consumer self-awareness, interest level in style and fads

Information Search Right level of information for a given category, increasing use of Internet and non-traditional media

Alternative Evaluation and Selection Price, value for money, interest in style

Outlet Selection and Purchase Convenience, number of brands available, exclusivity

Post-purchase Processes After-sales service, service experience

Implications for Retailers

The Ideal Retail Mix

Place

ProductValue

People Communication

• They travel the most for the goods/brands they like.• Store Ambience not a strong driving factor.

•Most brand loyal – Most of the marketing spend today is on them

• Conspicuous consumption• Luxury for retired lives• Do not spend on goods they don’t need.

• Highly Social and Demand Service•Value Personal Recommendations and expert opinion

• Traditional mass media advertising and word-of-mouth. •Not very open to internet, social media.

Place

ProductValue

People Communication

•Clean Ambience – Tidy, AC etc.•Trade off between distance travelled and quality of goods available.

•High Quality Product with longer Life – but affordable price tags•Experiment with brands – Least Brand Loyal

•Offer Value and “Live Up to” Claims - Like Products that Deliver•Better to use Market Penetration Than Price Skimming

•Listen more to the sales-person than Ads•Like Personalized attention

•Direct Mailers – Receptive to Uniqueness•Highly Individualistic Campaigns•Interactive Advertising Using New Media•Dislike The use of Role Models

Place

ProductValue

People Communication

•Prefer Convenience except for up-market goods.• Prefer larger stores – one stop shopping•Store design contains areas for young people to hang out.

•Collection/Variety of Products at lower costs – Value for money•More than a product – Value added benefits and Exclusivity•“don't like a hard sell “ but “brand and fashion-conscious “

•Value for money, information seekers for up market categories•Low decision making for non-necessary products

•Born into technology – low social interaction, high virtual interaction

•Creative Advertising – Impulse Buyers (Unplanned Buying)•Ads focus on high energy, with fast-moving visuals, splashy graphics, brilliant colours•Fickle consumer – 360 degrees campaign

Sources• Stephanie M Noble & Charles H Noble – Getting to know Y: The Consumption Behaviors of new cohort,

American Marketing Association Conference• Canadians Plastic Sector Council – GenX /GenY Behavioural Research and Messaging Strategy , March

2008• Enterprisingmuseum.com• Deloitte Consulting LLP — Who are the Millennials, a.k.a. Generation Y, 2005• Retail buying criteria of X Generation consumers