The age of the consumer

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Charlotte Dennis-Jones and Katie Kilgallen look at the key characteristics of shoppers in four age groups and investigate how to earn brand loyalty

In the world of brands, customer research is big business. Not so in retail. So while there is no end of information about how people use products, there is much less about how they buy them. A lack of insight into customer behaviour is costing retailers millions in sales. So who is today’s customer, how do they shop and what do they look for from retailers?

13 to 24

To observe the shopping habits of the youngest consumers, you need look no further than Topshop’s flagship store on a Saturday. Hordes of teenagers stick together in groups, moving excitedly from one product to another, holding up potential purchases and disregarding those that do not command squeals of approval from their peers.

For these customers, shopping is all about the social experience. They epitomise the impulse buyer and it is exciting new product and engaging displays that will make them part with their cash. Envision Retail managing director Jason Kemp says: “In a way, this group is learning how to shop. They want to shop with their friends and they want approval.” Their shopping mantra is: “Give me great visual impact, so I am inspired to buy”, says Kemp.

From a store operations perspective, there are several steps that can be taken to improve conversion rates. Because they shop in groups, young shoppers cause congestion in the store, so aside from looking at layouts that could ease this, Kemp says fitting rooms are another consideration. “You’re getting two or more customers for the price of one and yet you don’t often see an area of the fitting room where people can view their friends’ potential purchases,” he says.

Many stores catering for the young consumer are crammed full of merchandise in an attempt to make them stay and browse because of the sheer range of product. Many of these shoppers are willing to rifle through rails of clothes, but such layouts also make it more difficult to hold up items to show to their shopping companions. The more opportunity there is to debate a product, the greater the conversion rate.

TNS Magasin founder Siemon Scamell-Katz adds that sales training should teach staff how to deal with groups of people; often, scenarios focus on one-to-one dialogue.

Young shoppers may not put the huge emphasis on customer service that older generations of shoppers do, but Scamell-Katz points out that service provision is still important. They like to feel like they are being treated. In supermarkets, for instance, they will be the first ones to take advantage of free food samples.

In terms of the location of these shoppers, Experian says that, unsurprisingly, the highest proportion of this group are found in university towns. Conversion times are also interesting; Experian surveyed 1,000 shoppers of all ages and found that, as would be expected, most purchases by this age group are made at weekends. But, while they are most likely to visit more stores later in the day, they are most likely to buy items in the morning.

When it comes to online shopping, the social factor is equally important in cyberspace. Retailers targeting these consumers will have to consider building some form of social networking into their sites. Web design agency Conchango, having dubbed the teen generation “MP3 girls”, says it is something of a fight to grab their attention and encourage them to devote time to your retail web site. “You have to look closely at how you tap into their world,” says Conchango head of interactive media Paul Dawson. “They might be consuming two or three different types of media, so the answer has to be in mobile phones and social networking.”

The teen to 24-year-olds are savvy shoppers. They haven’t locked in to brand choices yet and are open to advertising, but are fully aware of which brands are targeting them and why. Dawson adds that they are also highly influential within households; it is thought that they influence 60 per cent of technology and car purchasing decisions.

This group is a force to be reckoned with. Research by trends, brands and futures journal Viewpoint found that teenagers alone create a market worth of US$8.6 billion (4.17 billion) in the US and US$3 billion (1.45 billion) in Europe. If retailers can tap into their world, these young spenders will provide a wealth of opportunity.

Verity Hageman, 16, Leicester

“My favourite shops are Primark, Topshop, H&M and Dorothy Perkins. I have a disposable income of about£60 a month, but I don’t spend it all on clothes – I’ll probably spend the most on shoes. Topshop is quite expensive for me, so I look at the prices there, but at Primark I look at the quality and what the clothes will go with.

“Choice is the most important thing for me when shopping. I don’t mind rummaging through things to find the good stuff. Not all my friends are willing to do that. That’s why I often shop on my own, or with someone who doesn’t mind doing that too. I have an iPod, so I don’t spend any money on CDs – I get people to send me music, rather than pay to download it online. I do buy DVDs, though.

“I don’t really buy anything online. I like being able to buy things there and then. Occasionally, I’ll go grocery shopping with my mum – I like to go so I can choose what I want in the cupboard. Asda is my favourite because of its DVDs and clothes. I spend quite a lot on health and beauty products. Boots is my favourite store because of its variety. To be honest, I don’t take ethical or green issues into account. If there was a big rail and it said the clothes were organic or had something to do with saving the environment then it might catch my eye, but I don’t look at the labels or ask questions.”

Retail sites with the greatest percentage of traffic from 18- to 24-year-olds

Four weeks to November 17, 2007

Asos
Chemical Records online
Ark Clothing
Cult Clothing
La Senza Lingerie
Topman
Hard to find records
Miss Selfridge

Source: Hitwise

25 to 34

Mortgages, forging a career, marriage, babies. Pretty much everyone will experience at least one of these between the ages of 25 and 34. An increasingly pressurised job combined with significant lifestyle changes means time is very precious for this group of consumers. Not being able to find what they want in-store immediately is aggravating; poor availability is inexcusable and even the most minute of queues is a major inconvenience.

Notably, this is one of the only stages in the shopping life cycle when consumers predominantly shop alone. They do not appreciate unnecessary interruptions that affect their precious shopping time, such as problems at the checkout or having to wait for an available fitting room. In many cases, their impatience may reach such a level that they leave their basket of groceries and walk out. And when clothes shopping, hot, uncomfortable stores or long queues for the fitting room will often make them dump their chosen items on the nearest clothes rail and go elsewhere.

To appeal to this age group, Kemp says retailers need clear store layouts, ease of navigation, efficient but unobtrusive staff and swift service in fitting rooms and at checkouts.

Scamell-Katz says that when it comes to grocery shopping, these people are likely to do small, frequent shops. The way in which retailers respond to that can have a huge impact on brand loyalty. “If it takes someone 30 minutes to do their shopping at one store and 15 minutes to do it at another, they’ll go to the one that is quickest,” he says.

Most people in this age bracket are more likely to shop in mid-market high street outlets. But depending on which major life changes have taken place during these years, Experian says there are also distinct types of shopper within this bracket. Although nearly all shoppers in this group are under time pressure, Experian director of retail property consultancy Jonathan de Mello says the fashion-oriented “city adventurers” are often – even if it is subconsciously – concerned with “status and one-upmanship”. However, the “caring professionals” opt for non-premium brands and are more likely to be carefully balancing a hefty mortgage with nursery fees, or bringing up a family on one income.

All shoppers in this group like to spend on non-essentials wherever possible. In many cases, this might be once they have completed their more mundane household purchases, but after that, the potential for an impulse purchase is still high. Kemp says their shopping mantra is: “Get me to what I want quickly, so I can treat myself”.

This group isn’t obsessed with technology, but Dawson says they nevertheless like to be ahead of the pack nevertheless and enjoy having top of the range devices wherever possible.

Most people in this group would be lost without a computer – be it for banking, shopping or communicating via e-mail, or through social networks. They love feeling connected. In a report on this age group, Conchango says: “Even though their Blackberry means that they are effectively on call all the time, they love it and couldn’t imagine life without it. Always being connected to the familiar brings them a sense of security.”

Dawson says “convenience” best describes this group’s attitude towards online shopping. Nevertheless, he adds: “They can be a tricky group for online retailers, because they like to get out onto the high street and shop – a lot of their online activity is about research.”

These are busy people who lead hectic lives. They do not want gimmicks or jargon. “Being clear, transparent and honest wins them over,” says Dawson. This is the group that is edging towards being grown up and yet they are still young at heart. Making shopping quick, easy and efficient is imperative if retailers want to foster brand loyalty that will stay with them for years to come.

Chris Waite, 30, Brighton

“For groceries, I shop at Tesco normally because it’s around the corner. Sometimes I treat myself to Waitrose, but the prices can be prohibitive. I often shop on Tesco’s web site, too. When I’m bulking up on good value clothes I head to H&M because of the price and convenience, but when I’m after something special I head into my local shops in North Laine in Brighton.

“I definitely prefer independents, but often fall back on chains because they’re easy. I do feel slightly guilty about shopping at chains and not supporting independents. For me, the time factor is also very important – I tend to have a low attention span so I don’t spend long periods shopping. Instead, it’s a case of going shopping with a specific purchase in mind. I cannot handle the TK Maxx approach to shopping and I do a lot of it alone, probably because I get frustrated by people who take too long.

“I shop online quite a lot for everything from groceries to gifts, electronics and furniture. I do the majority of my entertainment shopping online using sites like Play.com, Cd-wow or Amazon, otherwise I’ll go somewhere like Borders. I haven’t been convinced to buy clothes online yet. I need to try them on first and I can’t be bothered to send things back. The web is a great source of information and reviews and I often use Hotukdeals.com to find good deals and Quidco.com to get cash back on online purchases. I’ve recently become an overnight greenie and I really take this into consideration when making purchases.”

Retail Sites with the greatest percentage of traffic from 25- to 34-year-olds

Four weeks to November 17, 2007

Blooming Marvellous
JoJo Maman B颩
Mamas & Papas
Two Left Feet
Kiddicare
Confetti
Mothercare
Vertbaudet
StorePay Auctions
Early Learning Centre

Source: Hitwise

35 to 54

There are two predominant types of shopper in this age bracket, family focused and empty nesters.

The younger people in this group usually have to combine shopping with children in tow and Kemp says this younger, family-oriented shopper attaches a high importance to price. He explains that their mantra is: “I need a shopping experience the whole family can enjoy,” so retailers need to think about how they can make a shopping trip as stress-free as possible for both adults and their children.

Although this younger group may still impulse-buy, they will largely go for bargains. For that reason, price is one way to grab their attention and help increase conversion rates. Layout is vital. Any store that is cramped or difficult to manoeuvre buggies in will instantly become a nightmare for these shoppers.

At the other end of the scale you have what Conchango describes as “newly FREDDS” – newly free of debt and dependants. These shoppers are beginning to rediscover the joys of treating themselves now they have fewer financial or family constraints. Although still leading a busy work and social life and still time-pressured, they have more time to spend shopping. Experian says the highest proportion of 40- to 50-year-olds live in rural settings that are within easy commuting distance of larger centres for work.

Although they have different shopping habits, both types of shopper have much in common. Future Laboratory strategy and insight director Tom Savigar says that what influences the 35s and over when making a purchasing decision is good value, good design, a high level of service and the fact that the purchase was a necessary one.

He adds that they are also firm believers in brands. “If a brand promises something, they believe it,” he says – unlike the younger generations who are far more promiscuous when it comes to brand choices.

There is a general consensus that retailers could do more to maximise sales within this entire age group. Dawson says they have been “overlooked”. Savigar agrees. “They’re a bit of a forgotten generation. Instead of settling down, they’re selling up and a lot of people don’t realise how vibrant they are,” he says. Similarly, Scamell-Katz believes more could be done to woo them. “I can’t think of anyone that talks to this group either very much or particularly well,” he says.

And yet the 2005 Consumer Connections Study by Carat Insight said that those consumers aged 45 to 54 are likely to become one of the most important groups in fashion retailing. In that year they spent£3.2 billion on clothes and£272 million on lingerie.

However, they also pose challenges for retailers. Scamell-Katz says: “They are hugely cynical and getting through to them is tough.” This generation is experienced at choosing brands and, being less impulsive, painstakingly researches purchases.

These shoppers are particular fans of price comparison sites and are also the ones often looking at high-ticket items. Dawson says: “They take a lot of advice and do a lot of research. They want to make smart choices and rely on people who have made those decisions before them.”

He adds that although they like the convenience of online shopping, retailers need to be wary about the entire online experience that they offer. “It is about how they tap into shopping habits on the high street and apply that to online,” he says. These shoppers expect high standards and impeccable customer service in stores and demand the same online. Fulfilment is important; receiving purchased goods in a drab plastic bag will not impress. They want to feel that care has gone into delivering their well-considered order.

This age group is loyal to brands, yet open to discovering new ones. But you have to work hard to encourage them to try them in the first place and even harder to keep their custom.

Elaine Collins, 48, Leeds

“I spend quite a lot of my disposable income on clothes and make-up. I tend to buy make-up from department stores and Boots; for clothes I like a mixture. I like Zara, Marks & Spencer, Karen Millen and Whistles, as well as local boutiques. I tend to buy some cheaper bits and then balance it with a few more expensive items and I will always go back to places where I’ve found something before. If I know they cater for me, I tend to go there first. But I do like to see new things as well.

“The worst thing is that now you can only find independent shops on local high streets. All the city centres have been taken over by large chains. I don’t enjoy clothes shopping as much as I used to, because there’s not enough out there for my age group. I’m 48 and I like to wear fashionable clothes, but I’m just starting to get too old for some of the styles.

“I do worry about ethical issues. If the clothes are too cheap, there’s a reason why they’re too cheap and it puts me off. I’d rather pay a bit more and know the workers were paid fairly. I usually spend an average of two days a month clothes shopping – half a day here, half a day there. I tend to shop alone, especially if I’m looking for something specific.”

Retail Sites with the greatest percentage of traffic from 35- to 54-year-olds

Four weeks to November 17, 2007

Families

Virgin Vie at Home
Build-a-Bear Workshop UK
Wii Consoles
Next
Confetti
Toys Direct to Your Door
Early Learning Centre
Tesco Photo Centre
The Toyshop
Mamas & Papas

Empty nesters

Ocado
WaitroseDeliver
Coopers of Stortford
Lands’ End UK
Crocus
Joules Clothing
Hawkshead
Boden
Boundary Bathrooms
Majestic Online

Source: Hitwise

OVER-55s

Forget scrimping and saving on tiny pensions – many of today’s 55-year-olds and over are the baby-boom generation. As Savigar says: “They have a sense of liberation; it’s time for the pot of gold at the end of the rainbow to be brought out.” This is a group that is growing in number, wealth and purchasing power.

Research published by Verdict last week found that retailers need to adapt their propositions to the more mature shopper if they want to reap financial rewards. It says that those aged 65 to 74 will increase their retail expenditure by three quarters in the next 10 years, making them the fastest growing age segment in terms of expenditure. It also says that by 2017 the over-65s market will be worth£64 billion collectively to UK retail, compared with£39 billion this year.

Verdict says that over the next 10 years retailers will witness a lift in these shoppers’ expenditure on personal care, clothing, electronics and music.

Dr Ken Dychtwald, a pioneer of studying the ageing population and author of Age Wave, says that fifty-somethings with generous pensions and a lifetime of savings and investments “control 70 per cent of all wealth”.

Retailers need to banish stereotypical images of those in their late 50s and beyond. Savigar points out that it’s not unusual for a sixty-something to have teenage children. While in previous generations the idea of old age began much earlier – perhaps even as early as the point of retirement – it now begins at about 80 years old.

Like teenagers, older shoppers in this age group usually have time on their hands and often revert back to social shopping. For them, it’s an opportunity to network. Similarly, many of those aged 55 and over thrive on newness of product and retailers should pay attention to visual merchandising to inspire their purchases. In summary, Kemp says: “55-year-olds are becoming the new 18-year-olds.”

Experian notes that this group visit fewer stores, but are more likely to buy. It also says the conversion rate of the 65-year-olds and over is higher midweek. They also visit few stores after 4pm and when they do they are unlikely to buy anything.

When it comes to online shopping, Dawson says it is important to factor this age group into the equation. Conchango believes this group will be increasingly likely to use the internet to shop and are more likely than any other age group to buy electronic goods online. “It’s a big market potentially. They are engaged and passionate about learning and they don’t want to be treated like old people,” explains Dawson.

This has a bearing on the design of web sites for older consumers. Dawson adds: “Retailers should look at simple things, like is the text on your web site big enough? You hear a lot about accessibility for disabled people, but not about accessibility for older people.”

This consumer group finds it frustrating if, when shopping online, there are too many clicks between choosing an item and finalising a sale. More than any other group, they require simple sites with clear layouts.

Savigar says the key to capturing the loyalty of this age group is to not patronise them – they hate being depicted as elderly. “Ads should use images of people 15 years younger than their target audience to avoid frightening that audience away,” he says.

Verdict consulting director Neil Saunders says pitching to the older consumer has been seen as dull traditionally. However, if retailers want to ensure profitability and competitive advantage, they must banish this mindset.

Shirley Bloom, 61, Borehamwood

“For food, I shop in both Tesco and Sainsbury’s. The main reason is proximity – I wouldn’t travel miles out of my way for a supermarket. If we are buying electrical goods, I use John Lewis and have done for years – it is pretty good. It’s more its customer service than its prices. I have more trust in it and I feel it’s good quality.

“In terms of clothes, I work in a boutique selling Italian clothing and accessories, so I buy quite a bit from there. Primark is fantastic for certain things, too. I also shop in M&S and small boutiques. I spend a fair amount on clothes and I have a few designer handbags, but they’re a treat.

“I don’t shop on the internet – I don’t even have a computer. If I wanted anything, my sons or my daughter-in-law would order it. I like to see what I’m buying. I don’t really take environmental and ethical factors into consideration when I shop. I bought some organic cotton sheets the other day, but only because they were the exact colour I needed.

“I tend to shop on my own, but for more expensive things I will go with my husband. For clothes shopping, I might go with my daughter-in-law, or a girlfriend. When I go into a store, the layout is the most important factor, followed by customer service. The stock has to be easy to see and the store easy to navigate.”