Big mistake: Retailers ditch focus on Gen Z and Baby Boomers
Retailers, both chain stores and independents, are shifting focus away from older, higher earning shoppers in a bid to woo younger spenders, and it’s a move that could well backfire, according to new research from Hitachi Consulting.
This found that 74% of stores are increasingly focusing their operations and service on 19–38-year-olds, in a bid to capitalise on mobile and digital spending, as well as capturing the long-term loyalty of the next generation of shoppers.
“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. In fact, the average national wage of a Millennial is £23,700, compared to £31,146 for 39–60-year-olds. Only 14% of retailers said that their current operations are specifically optimised for those over the age of 39, when the reality is that 40–49-year-olds have the highest average wages in the country.”
When it comes to retailers’ priorities for flagship stores, 26% suggested that the most important feature for the future was augmented/virtual reality or drones, with only 14% focusing on more pragmatic innovations like till-free shopping and 13% on improved digital signage.
“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.”