Marketers have been focusing heavily in recent years on marketing to millennials as they establish households and come into more spending power. For some time, marketers have been adjusting their marketing tactics to appeal to this age group, those consumers who are approximately between 23-39 years old. And for good reason, millennials spend about $600 billion in the United States each year and their average yearly expenditures total around $47,112. (Accenture)
Gen Z is also grabbing more attention in the spotlight as an audience with their own spending power and unique purchasing habits. This group, typically those consumers under the age of 23, are not afraid to spend money and have spending power of $44 billion a year, according to research from Uniquely Generation Z.
Over the years, brands have developed different techniques to appeal to different generations. Epsilon’s recent research report on cross-generational marketing, further analyzed spending patterns. (Epsilon grouped the generations in 10 year increments – for example, defining millennials as those 25-35 rather than the more widely accepted grouping of 23-39. According to the research:
- Baby Boomers (ages 55-75 years old) spend a total of $548.1 billion annually
- Gen X (ages 36-54 years old) follow Boomers with $357 billion annual spend
- Millennials (25-35) are next with $322.5 billion in annual spend
- The Silent generation (ages 76 years and older) spend $162.9 billion annually
The categories on which the generations spend will naturally vary greatly, such as younger generations spending more on retail and older generations spending more on education.
Epsilon further broke down specific categories such as travel and retail. In travel, Gen Z spent the most than other generations on airlines and the silent generation, those over 76, spent the most on cruise lines.
In retail, millennials spend online than other generations such as on Amazon and Zappos, while Gen X spends more on warehouse clubs and sporting goods than other age groups.
Which channels do consumers prefer to shop on? According to 80% of consumers in each generation, they have recently visited a store and half consider it their referred channel. Some other interesting statistics when comparing online to offline:
- Going to stores is preferable for almost every generation except millennials, who shop in-store and online equally.
- Older generations prefer in-store shopping to experience products and for easy returns.
- Gen Z prefers in-store shopping for purchase speed and the social aspect of shopping with friends.
- Millennials prefer shopping online for the shipping convenience, which also appeals to boomers and silents.
- Amazon is favored by all generations, with millennials as its biggest users (65%). Gen Z is 2x more likely to use an online-only store or brand website than any other generation.
- About 75% of Gen Z and millennials use smartphones to shop online—more than any other generation.
- 63% of Gen Z use laptops to shop online, significantly higher than any other generation.
With different spending habits, lifestyles, incomes and so forth, marketing tactics to reach consumers in different brackets will vary. Here’s a look at some top tactics for different age segments.
- This generation does not trust advertising and communications must be authentic and your brand trustworthy. They tend to gravitate towards testimonials by their peers and influencer marketing. They will identify with an influencer they like with similar values and interests, motivating them to make a purchase.
- This generation group up with social media but typical channels such as Facebook and Twitter will not make a big impact. Think channels that showcase videos and images such as Snapchat or Instagram.
- Social media is strong with this group as well. They enjoy interacting with brands on social and using social platforms for customer service. A study by com conducted a study that analyzed 219 millennials’ ecommerce behaviors on social media platforms. Findings included:
- Thirty percent of millennials purchase products directly on Facebook.
- Facebook, Instagram and Pinterest foster the most brand trust and help young adults find discover products they would actually use.
- Snapchat is irrelevant for ecommerce and branding — only 5 percent of millennials believe it creates the most trustworthy relationship.
- Sixty-one percent of millennials trust a friend’s endorsement the most, followed by their own experience with a brand (51 percent) and website reviews (48 percent).
- Thirty-one percent of respondents said social media influences their purchases. However, they complete the transaction elsewhere.
- User generated content is also appealing with this group. Millennials enjoy co-creating content, entering contests, participating in activities and feeling they are part of the community.
- Email marketing is the preferred channel by about 80% of Gen Xers. Busy with careers and families, they don’t always have time to read long copy so keep it short with a clear call-to-action.
- This generation also tends to be more loyal than other generations. They love freebies and coupons so show them some love and they will return the favor with long-term loyalty to your brand.
- Facebook is their favorite social platform so reach out with engaging posts and entertaining content.
- This generation is more social than you may think. About 82 percent of Boomers belong to at least one social media site, with Facebook being their most popular site of choice — and where you should focus your marketing efforts when trying to reach this group. Unlike the younger generation that favors Instagram and Twitter, those continuous streams of information are less popular with Boomer shoppers.
But they do spend 27 hours per week online, and on average, people ages 50 and older spend $7 billion per year online. More than half of Boomers who use social networking sites visit a company website or continue their research on a search engine as a result of seeing something on social media. This means having a strong online presence is necessary to encourage their in-store shopping.
- Boomers also like to be rewarded. Simple, straightforward loyalty programs work best. Approximately 26 percent are active in all of the programs in which they are members, as opposed to only 19 percent of Millennials. They also place a high value on program simplicity, with 78 percent saying they will continue to participate in a program because it’s easy to understand.
Silents are among the wealthiest of the generations. While their life needs and priorities have evolved, they remain active consumers of lifestyle and entertainment industries, healthcare, financial services and housing.
- Direct mail and written communications are the most effective way to communicate. While more members of this generation are using social media and other digital channels, the majority prefer direct mail, newsletters, postcards and flyers.
- Keep it simple. Keep copy simple and straight to the point. Also use images that will appeal to this age group’s values such as family, patriotism, community and respect.
It is important to keep in mind that each generation is comprised of unique personalities, lifestyles and purchasing habits. These tactics can serve as a good guideline when developing messaging and also when used used in conjunction with segmenting, analytics and other data-driven marketing methods.
Learn how Porch Group Media can help you get to know your customers better and reach them across channels to boost your marketing success. Contact us to get started!