Mining the US Generation Gaps
March 4, 2010
Todd Hale, Senior Vice President, Consumer & Shopper Insights, Nielsen
SUMMARY: Understanding shopping and media habits at different ages can help marketers
optimize critical assortment, pricing, promotion and advertising decisions by crafting targeted
strategies and niche offers that reflect deal propensity, trip frequency, channel predilection,
average spend and media usage.
Generation: group of contemporaries; all of the people who were born at approximately the
same time, considered as a group, and especially when considered as having shared interests
and attitudes.
Greatest Generation: born prior to 1946 (64 + years of age in 2009)
Boomers: 1946 – 1964 (45 to 63)
Gen X: 1965 – 1976 (33 to 44)
Millennials: 1977 – 1994 (15 to 32)
Observers of popular culture have long known that in large part, generations look alike, think
alike, dress alike, vote alike, live alike, and share a similar attitude toward life and leisure
activities. That theory certainly holds true for shopping. A recent Nielsen analysis of the four key
generations revealed generationally consistent shopping habits that reflect diverse lifestyle
preferences and economic habits.
The Greatest Generation members, shaped by the Great Depression and World War II frugality,
are the most frequent shoppers and more deal prone than other age segments. High-earning
Boomers have the largest annual dollar spend per household of any group, followed by GenX.
Millennials don’t like to waste time in-store, shopping less often than other age cohorts but
buying more per trip as a result.
Young Spenders
Millennial and Gen X shoppers favor mass supercenters and mass merchandisers over more
traditional formats like grocery or drug stores which remain a draw for the Greatest Generation
and Boomers. When younger shoppers do check-in to a format, they make a big impression at
checkout. Millennials topped the basket value list at grocery stores and mass supercenters, with
Gen X taking top spending honors at mass merchandisers and drug stores. Millennials today
represent the largest population segment—over 76 million strong—just slightly larger in number
than the Boomer segment. The two groups together represent half of the U.S. population.
At club, dollar and convenience/gas channels, Boomers and the Greatest Generation populate the
aisles more frequently, while younger shoppers offset fewer trips with bigger baskets.
On Target
Certain store banners hold a unique appeal for the younger generations, and Target is at the head
of that retailing class. Target stores have managed to maintain a hip, trendy image with a strong
value message with whimsical advertising; strong, almost pop art in-store merchandising; and a
roster of high profile designers for everything from housewares (Michael Graves) to bedding
(Todd Oldham) to women’s fashion (Mossimo) to cosmetics (Sonia Kashuk). And, with the
interest in at-home meals, Target recently announced a new partnership with TV cook show host
Giada De Laurentiis for a store-brand line of specialty food items and cookware.
Gen X and Millennials both patronize Target more often than other age cohorts, but also
outspend them at Target, as well as at competitive mass merchandiser banners like Kmart and
Walmart.
Spending Patterns
Research suggests that owning a pet can stave off loneliness and lower blood pressure.
Apparently, the Greatest Generation got the message, which may account for the average $198 in
annual spending among pet food buyers in these households. An analysis of a selected sample of
categories where there were big differences in annual spend across the generations showed gaps
between the gaps. The next largest spending categories for seniors were wine at $124 per year
and vitamins at $107 per year.
For these selected categories, Boomers spent even more on pet food ($211 per year), followed by
carbonated beverages ($140/year) and wine ($125/year). Pet food also topped the list for Gen X
at $148 per year, with carbonated beverages a close second among big dollar categories at $134
per year and baby food in third position at $127 annually. Millennials and their young families
placed baby food in the top spot with annual outlays of $170 per household, followed by
carbonated beverages ($116/year) and pet food ($112/year).
Pleasure or Pain
A Nielsen survey identified that most households (53%) have favorable attitudes toward grocery
shopping while 38% consider it a chore. Retailers take note: interesting generational differences
exist, which can help uncover ways to extend their time in the aisles.
It is an interesting dichotomy that the Greatest Generation is less likely to enjoy shopping than
any other age cohort—with the most respondents rating shopping as a chore—and yet also the
most likely to walk up and down each aisle on a shopping trip, thus extending their time in-store.
Merchandising opportunities to pepper products that appeal to older consumers should be
pursued.
Conversely, the Millennial generation, who makes the fewest trips to virtually any format, really
likes shopping. On a typical mission, they know how to find what they need and are less likely to
shop the entire store. Engaging this ―in and out‖ shopper with products such as music or other in-
store entertainment could extend their time in stores and get them to shop more aisles.
Planning and Price
Investigating an array of different consumer shopping practices and strategies, Nielsen
determined that shoppers in these economic times are proving to be rational consumers with
more than half relying on shopping lists and consistently comparing the unit price for a product.
Other ways consumers attempt to eke value out of a shopping trip include using the store circular
to identify sale items and redeeming coupons—a practice that has spiked in popularity thanks to
the advent of electronic and mobile coupons.
While Gen X and Millennials claimed the highest coupon redemption rates and were among the
most likely to use shopping lists for most trips, they also admitted to making the most unplanned
purchases on their shopping excursions. Younger shoppers tended to bring children with them
more often than others, were less likely to ask for advice from meat or produce department
personnel and, in the case of Millennials, very likely to bring another adult along on most
outings.
Dining and Dollars
When asked how the economic downturn had impacted meal time, more than 40% of
respondents mentioned consuming fewer carry-out or home-delivered meals, or increasing the
use of private label foods. One-third or more of those surveyed now incorporate more basic
ingredients in meals and buy the produce that is in season, fresher and less expensive.
More than one-quarter prepare large quantities of food that can be eaten throughout the week,
reduce the number of desserts served and opt to brew their own coffee at home. Nearly one-
quarter mentioned serving healthier meals. The Greatest Generation and Boomers were the
groups most likely to purchase seasonal produce and serve healthier meals, while Gen X and
Millennials cut down on carry-outs and home delivery while stocking up on private label.
Media and meals
Consistently across the board and across the generations, people turned to cookbooks, the
Internet and television for recipe ideas and less expensive in-home entertainment as budget-
conserving options. Millennials were the most wired into the Internet, while Gen X favored
cooking programs and the Greatest Generation paged through cookbooks.
On average, the typical American consumes more than 35 hours of media per week across the
three screens—TV, Internet and mobile. As smartphones redefine customer media interaction,
they present enormous potential for generating buzz around products, delivering timely product
info and coupon codes, and building community through brand advocacy.
Shopportunities
So what is the best way to reach each generation and capitalize on their unique shopping interests
and needs? Here are some suggestions:
Greatest Generation: freebies and senior discounts to appeal to their value orientation. Special
products addressing aging issues; special packs for smaller households. Better signage, more
forgiving package design, on-shelf or on-cart magnifying glasses. These savvy shoppers spend
most of their online time using email and message boards, providing two ready avenues for
delivering targeted offers and initiating value-add discussions about health issues and special
wellness programs.
Boomers: keep these big spenders happy with monthly or quarterly cash-back savings programs
that reflect spending levels. Pursue the up-sell into prescription medications, insurance, gifts for
grandkids and kids, entertainment, travel, even discount wines by the case. Comprising more
than one-third of the Internet population, Boomers are big online shoppers, comfortable using
email and messaging to stay in touch. Twitter is a huge untapped outlet for reaching Boomers,
who increased utilization 469% during 2009. Reach one and you reach their entire follower base
with product info and special offers.
Gen X: time is a precious commodity for these busy young families, so reduce deadline pressure
by offering meal planning and deals, school supplies and little indulgences like lattes to make
shopping less onerous. Child care activity centers or computer kiosks keep kids engaged while
parents shop. In-store cooking or craft classes offer family fun and a reason to increase the trip
count. More than 80% of X-ers are online checking out Facebook, MySpace and Twitter,
shopping and price checking online and texting or emailing friends. Deliver quick hit info and
offers using new media for fast results.
Millennials: consider upgrading piped-in music to current hits to attract contemporary shoppers.
Coffee stations with battery chargers and in-store WiFi let them kick back and review Internet or
mobile coupons and shopping lists. Convert their need for immediate gratification into impulse
buy sales with enticing end caps and front of store bins. These visually-oriented shoppers will
Tweet and text about special deals real time from the store aisles about what looks good today,
where to meet-up, and anything cool that catches their eye on site. If you’re lucky, you’ll hit a
quirky Millennial sweet spot, and they’ll YouTube or Hulu a video of a helpful employee or
unusual in-store promotion.