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Comment: Why retailers must keep the generation gap in mind

Catering to the needs of different generations is something that retailers have entertained since the arrival of the Baby Boomers.

The driving force behind the needs of cohorts has consistently been technology. Understanding the shift between each new generational group, and how their approach to shopping changes over time, will continue to affect the way in which businesses steer their focus, with the rate of progress dictating how retailers need to react.

Consumers' values, preferences, even spending habits, are mainly established in adolescence. Baby Boomers, for example, were the first generation to grow up with the mass affordability of cars and packaged holidays abroad. In retail terms, this led to the development of retail parks and increased variety of non-British foods in supermarkets as mobility exploded both in the literal and social senses. In comparison, Millennials, or Generation Y's, influence on the retail landscape has been formed on the back of the introduction of the internet.

Those born between the late 1970s and early 1990s are the first group to adopt the mantle of 'digital natives'. Retailers have responded in turn by being able to sell on a global platform, regardless of their size or their product portfolio. Who would have thought that retailers without a store presence would have existed and competed before the potential offered by the internet?

These two consumer cohorts typically diverge in terms of shopping habits. Baby Boomers have more of an emotional connection with their favourite retailers and for this reason tend to remain relatively loyal. However, their selection criteria for brands are chosen rationally, based on individuals seeking advice and referrals from experts or friends enabling informed decisions to be made. By comparison, the way in which Millennials select brands is often based on more ephemeral influences, opting for inspirational and empowering goods that are endorsed by celebrities (for example) on social media and in other forms of marketing.

Easily able to navigate websites, they are able to make product choices based on quality and price comparisons online, and on rational grounds. As a result, their switching propensity across retailers is high. While Millennials welcome what's available at their fingertips, the sheer volume of information and choices available online can be frustrating to Baby Boomers, who are finding that omnichannel shopping becoming a more demanding and time-consuming process. In this case, too much choice, kills the benefits of choice.

These differences in attitudes and habits help confirm that the presence of high street stores will continue to be important to both shoppers and retailers, as we move from omnichannel to seamless uni-channel retailing. Having a physical presence meets the needs of the more affluent Baby Boomer generation that prefers to buy from a name they trust, with Millennials able to seek the best deals online that meet their budgets and social aspirations. Offering both, today's retailers are successfully bridging the generation gap.

Looking to the next generation of shoppers, it is early days to determine the traits and attitudes that Generation Z will possess. All that can be guaranteed is that the shift will be significant. An age band that has spent their teenage years exposed to terrorism and global warming issues, and who have never lived without the internet, these digitally dependent consumers are already very different to the Millennials. Shying away from social media platforms like Facebook, but opting for apps such as Snapchat, marcomms by mobile phone will have to evolve to match the platform's temporary and visual nature. Merchandising in-store may well see a boom period to appeal to imagery engagement, and the enthusiasm for gaming and ephemeralism may lead to services such as 3D printing and dynamic pricing becoming mainstream.

The biggest challenge here is for retailers to continue to refresh their knowledge about their key demographics, but be mindful to the influences and needs of different generations and the power of new technologies. Staying in tune with the needs spectrum of the generations and their shopping attitudes and behaviours, online or in-store, will guarantee that retailers and brands will adapt and stay relevant to their marketplace. Ignore the generation game at your peril.

Dr Tim Denison, director of retail intelligence at Ipsos Retail Performance, writes a regular Essential Retail column on in-store technology and the wider retail landscape.

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