By Zach Thomann, Executive Vice President & General Manager at PFS
In today’s competitive retail landscape, brands are increasingly recognising the need to see shoppers as individuals – understanding how, what and why they buy. Generational differences have, for a long time, been a key differentiator, providing brands with a powerful lens to engage and attract a range of customers. After all, different generations have traditionally shown varying shopping habits and attitudes towards online and offline brands. In fact, an earlier (2017) depiction of generational spending revealed a disparity between generations in terms of the way they shop, what they shop for, and how they engage with brands. For example, Generation Z are typically more socially conscious and digitally adept. Whilst older generations are growing increasingly comfortable with buying online, this had generally been limited to desktop or laptops – with many not being comfortable with social media like Snapchat and Instagram.
During the pandemic, PFS took a fresh look into these shopping habits, surveying 2,000 UK and 2,000 US consumers to find out how COVID-19, and the measures taken to fight it, has changed their shopping behaviour. The findings turn what we, as an industry, thought we knew about generational differences and habits in retail, on its head. Whilst the pandemic presented a range of responses, the lasting impacts seem to have formed clear patterns for the future of retail. Rather than responding along generational lines – it seems a convergence of shopping behaviours has surfaced as we adjust to the ‘new normal’.
How generational shopping habits have changed
Pre-pandemic, both Generation Z and millennials were clearly more familiar with technology than their elders were. They were classified as quick to adopt new technologies and devices, eager to try new gadgets and at home in the digital world.
True to form, in the recent PFS research, 32% of Generation Z respondents and 35% of millennials confirmed that they had tried new online retailers due to lockdown. Many had also made online purchases of goods they had not previously bought online: 61% of Generation Z and 52% of millennials. But, notably, the same research showed the behaviours/influences of that group extending at pace, beyond Generation X and into the baby boomer generation (born 1946 to 1964).
During the pandemic, older generations have also become eCommerce consumers en masse – not unreasonably, given their higher levels of risk. And even as the strictest lockdown measures have eased, many of them have continued to shop online. This is great news for online retailers, but it keeps this generally affluent group out of brick-and-mortar shops, compounding the impact of deserted town centres and offices.
So, while Generation Z and millennials remain the drivers of online shopping and early adoption, the speed and breadth at which they influence the generations above them seems to have been boosted by the lockdown. Consequently, the post-pandemic spending behaviour of many boomers now resembles that of younger generations, far more than it did just three years before.
In short, everybody now shops online. For many retailers, especially those focused on older generations and/or reliant on brick-and-mortar retail, this will demand major strategic change, as it becomes increasingly hard to differentiate shoppers by generation or behaviour.
The convergence of ethical, moral and political attitudes
Another area of convergence lies in ethical, moral and political attitudes to brands and purchasing. We have long been told that younger shoppers are driven by a desire for ‘experiences’ rather than ‘things’, and that they favour brands taking an ethical stance, for example on green issues and sustainability.
This was echoed in PFS’ latest research, with 52% of Generation Z respondents saying they would pay more to support carbon neutral delivery, and 71% of millennials saying they looked for ethical/sustainable features in products they buy.
Yet it seems that during the pandemic this ‘typical’ Generation Z and millennial behaviour was no longer restricted to ‘youngsters’. In the new research, 52% of all respondents claimed to feel greater loyalty towards brands that communicate with them and, crucially, show how they are helping others during this time (i.e. the pandemic). More to the point, this figure increased to 54% of baby boomers and 59% of the silent generation.
Furthermore, 37% of all shoppers said they have stopped over-purchasing and returning goods. Since returns often go to landfill and the transport costs (both financial and environmental) are huge, this can also be counted as an ethical choice.
The lines between generations are blurring – what does this mean for retail?
COVID-19 is rapidly changing how we shop, and that process has not ended yet. Nobody can say for sure how long the change will last or how it will evolve, but retailers already know that current shopping habits are nothing like they were pre-COVID-19 and adjustments need to made to preserve their business and continue to deliver on consumer expectations.
It is also clear that differentiating customers by age and trying to predict their behaviour by generation is currently less useful than before. Not only are baby boomers shopping like millennials, they’re starting to think like Generation Z. Almost everybody shops online, and everyone wants to know where brands stand on ethical issues.
In theory, this may be a pandemic blip, and in time the ‘old normal’ may return in some respects. But as we review retailer agility and the willingness of consumers to adapt at a rapid pace, it is looking increasingly unlikely.
For retailers, there are few certainties to hold on to, but the following are likely to prove helpful:
eCommerce is the way forward. Brick-and-mortar will likely have a future, but that future is yet to be determined. Meanwhile, almost everybody – regardless of age – is shopping online, which is itself a major change.
Retailers must now provide a comprehensive omnichannel experience for all customers. This is not just about linking the website with telephone support or a chatbot, it’s about recognising that customer preferences are diverse and, now, diffuse. If retailers and brands want customers to pick them, they have to make that easy and pleasant, and – crucially – let customers choose their channels and methods. That way, the retailer can always ‘meet’ the customer, even as they change their shopping behaviours over time.
Retailers must be flexible: COVID-19 is changing people’s behaviour in all aspects of their lives, and it is changing what they buy. Companies that can pivot to meet new demands and habits will have the advantage. Excellent customer service across the buying cycle underpins this.
The pandemic has been traumatic in many ways, and it isn’t over yet. There is doubtless more change ahead. But if retailers can do just one thing – delight the customer at every touchpoint – there is far more to look forward to, than there is to fear.