- Don-Alvin Adegeest |
In retail, there is a saying brands should go where there customers are. In an omni channel world this could be bricks and mortar, mobile commerce or online. New research from Hitachi Consulting found stores should not channel all their marketing efforts into Millenials, especially at the expense of older generations.
Hitachi Consulting found that 74 per cent of physical stores are targeting consumers in the 19-38 year-old age bracket in order to maximise sales from mobile and digital, along with a view to securing the loyalty of the next generation of shoppers.
While it may seem logical to advertise to Millennials, the study highlighted a significant discrepancy between the average national wage of a Millennial - 23,700 pounds - compared to the 31,146 pound average salary of shoppers aged between 39 and 60, commonly referred to as Generation X or the post-war Baby Boomers.
Retailers today could be making a grave mistake,” says Pierson Broome of Hitachi Consulting. “Clearly, Millennials are digitally savvy and their earning potential may be higher than that of older shoppers, but their actual earnings are significantly lower.
The study also found a difference between the way large chain stores and smaller independent retailers approach these age groups, with 89 per cent of independent retailers saying they were targeting Gen Z and Millennials, compared to 73 per cent of chain stores.
Only eight per cent of chain stores said their strategy was to target all age groups equally, compared to three per cent of independents.
“Retailers focusing on novelty rather than innovation may succeed in grabbing attention for a season or two, but if done in isolation, it becomes a race to the bottom,” says Broome. “Instead, retailers should focus on a diverse, meaningful strategy that adds real value and business efficiency. This digital transformation will help the back-end of the business to be as lean as possible, while making the front-end experience for the consumer as accessible and versatile as possible – and that’s a change which should benefit all age groups.”
Photo credit: Millennials, source Flickr. Article source Retail Systems website