We're living in unique times. Our retail customer base is composed of three distinct generations that have vastly different experiences and points of view. From Baby Boomers, who grew up in a world without mobile technology, to Millennials, who cannot conceive of a world without it, to the betwixt and between Gen Xers. How does this reality impact a retailer's marketing strategy? And what's the best way to address it? Let's take a quick look at each generation, their preferences and try to understand how to start building retail loyalty programs that can accommodate all generations.
Clearly, one important way to segment your customers is by generation. Not always easy to do because nobody wants to share their birthdate but nevertheless an important thing to consider in your overall retail marketing strategy - especially when it comes to loyalty. Although Baby Boomers still have the most disposable income and account for the majority of retail sales, Gen X, at 25% of the U.S. population is in their prime spending years. And Millennials, as we all know, are changing the game completely and are just entering their prime spending years.
Let's take a quick look at each segment.
Baby Boomers (Born 1946 -1964)
Known as the "me" generation, this group was responsible for ushering in major social change not to mention Rock and Roll! Although not native technology users, the majority (one study says 66%) routinely purchase online. They tend to use social media to connect and socialize and often go online to search for contact information or check out a retailer's website. Research shows that this group favors personal interactions with retailers and expects a high level of in-store customer service as well as highly knowledgeable retail sales associates. Lastly this group is highly responsive to coupons and promotions.
Gen X (Born 1965-1980)
This is the in-between generation. One foot in the analog world and the other in the digital world. These were the latch-key kids, often with Mom and Dad both working, who grew up in a world of rapidly changing social mores and independence. Bearing in mind that this group is in their prime spending years, it's important to understand their preferences. They tend to use email as a primary communication tool and respond well to loyalty programs at their favorite brands. One study shows that 65% of Gen Xers bought items at least once a month at their favorite stores where they were enrolled in a loyalty program.
Millennials (Born 1981-2000)
Often called digital natives, this group can't imagine a world that is not 24/7 connected through a mobile "smart" device. Collaborative, team oriented and very focused on work-life balance this generation is changing the game. No surprise that they are online ALOT (25 Hours a week according to one study) and are especially influenced by peer reviews and opinions. They do their research online and and use content-centric media (like blogs or social media) to get their information with a keen focus on what others are saying!
So, how does all of this impact your retail loyalty program or customer relationship marketing? Here's a great quote from a Synchrony Financial Retail Report that sets up the answer .
" Ideal strategy is one where the Boomer population feels valued and delighted,
while the Millennials feel excited and interested."
It's a tall order but it's doable. Here are a couple of things to think about;
- Consider surveying your customers to understand the mix of generations in your customer base as well as their preferences
- Think about using different media to target all generations (ie) website, email, blog, SMS, social media and work to keep them all fresh. You may create the same content but make sure you're distributing it in a variety of ways
- Make sure your brand is aligned across all your channels fostering a seamless customer experience
- Create opportunities to generate word-of-mouth whether that be online or in person
- Train your sales staff to understand different generational shopping preferences and empower them with different selling strategies
- Ensure that you are collecting all the customer data you can by integrationg your POS and Retail Management software with your loyalty and marketing platforms. Alalyzing this data will let you see which promotions, loyalty and marketing programs are working and with which customer segment.
The goal is to keep your customers delighted and coming back for repeat visits. After all, engaging a current customer is less expensive than attracting new customers. By segmenting your customers generationally as well as with data-driven insight based on their history and personal preferences, you can devise creative ways to optimize your retail loyalty program.
Want to learn more about how Springboard Retail can help you engage your customers (from any generation)? Watch our Customer Relationship Management system demo!
Topics: Customer Relationship Management