How to Tailor Retail Experience for Gen X, Millennials & Gen Z

While much research exists on the buying habits of Baby Boomers, smart retailers will be turning their attention to the next generations with massive buying power: Gen X, Millennials and Gen Z shoppers. Here are some crucial elements to consider in designing retail environments for each of these population segments.

Gen X values independence, critical thinking & saving money

Gen Xers (born 1965-1980, ages 43-58 in 2023) spent much of their childhood raising themselves, which taught them the value of independence, self-reliance and critical thinking. They’re expert DIYers – no task is too great for them to take on, but their independent nature also keeps them from asking for help until they’ve exhausted every means of tackling the challenge solo.

• They’re flexible and informal. Out of necessity, Gen X has learned to adapt well to change and value an informal environment that practices humor and diversity. Their questioning of the status quo has resulted in changes in communication, workplace environments and cultural practices.?
• Gen X is tech savvy, but not tech dependent. Gen Xers grew up during the transition from analog to digital technology and have an excellent understanding and comfort level with both worlds. As the first generation to grow up with computers, they can learn and adapt to new technology and devices with ease – they’re just not slaves to it and understand the value of "unplugging" from time to time.
• Gen Xers love a bargain and frequently use coupons from the mail or search the internet to look for cost savings from digital?coupons.
• Loyalty programs aren’t about loyalty. The primary drivers for joining loyalty programs among Gen Xers are to save money and receive rewards for purchases they make. More than 88% of?Gen Xers join loyalty programs to save money, with the rewards coming in as a close second at 71%.
• They straddle brick-and-mortar and online. Gen X grew up loving to shop at malls and still do, making more unplanned purchases in-store than any other generation. However, they have also seamlessly embraced online shopping, making them a hybrid generation.

Millennials value experiences, personalization, authenticity & transparency

Millennials (born 1981-1996, ages 27-42 in 2023) patronize stores and brands that offer flexibility, communication, and collaboration. They appreciate companies that are socially and environmentally conscious and give back to the community. Their journey consists of seamless, integrated offline and online personalized experiences, from initial research to final purchase.

• Millennials are overly cautious, online and offline. They seek legitimacy to avoid overspending or “being taken.”
• They’re mobile and social shoppers, using mobile devices to conduct research, check for bargains, find reviews, and purchase products – even while in-store. They hate talking in person, preferring to DM or email a company or customer support.
• It’s all about unique experiences. Driven by a quest for experience, they will pay more for unique, multisensory experiences rather than things.
• Personalization matters. They expect retailers to know what they want and are willing to share private information in exchange for a perceived benefit.
• Convenience is paramount. With a “buy now, deal with it later” mantra, they’re more likely to make impulse purchases. Over 90% choose a retailer based on convenience; while shopping online and subscription services are desired for fast delivery and product options, in-store shopping provides immediacy.
• 80% of Millennials are persuaded by price. As much as they value authenticity, local sourcing, ethical production and a great shopping experience, nothing beats a discount or targeted promotion.
• Research is a primary focus, done across a vast array of media and platforms to avoid the dreaded “transactional” sales conversations.
• Traditional advertising is typically ignored; online reviews and opinions from social channels matter most.
• Enhanced digital experiences increase engagement. Millennial car shoppers are drawn to differentiating dealer experiences that they can share socially. They also value personalization and convenience in the car-buying experience.
• The in-store experience still matters. Although 90% of the vehicle shopping journey is online, visiting a single dealership?completes?their search and affirms their choice.

Gen Z values immediate joy, online experiences, corporate values & ease of access

Born between 1997 and 2012 (ages 11-26 in 2023), the “iGeneration” spans a wide range: the oldest Gen Zers have jobs and mortgages, while the youngest are still preteens.

Shaped by the profound impact of the digital age, pandemic lockdowns, climate anxiety, and fears of economic collapse, Gen Zers are carving their own path forward, juggling their desire to seek adventure wherever they can with their need for stability by saving for a rainy day.

The past two years have been viewed as an opportunity to make up for all they missed out on during COVID. But with the cost-of-living crisis, many are feeling jaded as they walk into an uncertain future. Their priority: finding the joy again.

• Online governs the consumer journey. Gen Zers are digital natives and live their lives online: learning, working, playing, shopping, dating, and making friends. They voraciously consume media through sites, apps and social media feeds, each one forming a different part of their online ecosystem. More than any other generation, they’re known to carefully curate their online selves.
• Consumption is about access vs. ownership. Gen Z subscribes to streaming platforms instead of buying films or music, and this extends even to services like car shares or luxury-clothing rentals.
• Ease of use matters. Gen Zers like brick-and-mortar stores but still want the ease of mobile pay, app-based services, and simple online transactions.
• Influencers impact purchase decisions. 40% of Gen Zers admit to being swayed to purchase something online, often by brands featured in the videos they watch. Influencers, family and friends help them decide where and how they want to spend.?
• They have high retailer expectations. As a generation committed to its values, Gen Zers expect the same of their retailers, often choosing brands they consider ethical, that have a strong story or purpose, and that address environmental and social issues. They easily recognize when a brand is just paying lip service or isn’t backing up diversity?or sustainability claims with real action.
• Particularly conscious of impacts on the environment, 42% of Gen Z is at least somewhat likely to consider an electric vehicle (EV) purchase.
• Social media beats out search. When it comes to brand discovery and product research, the Gen Z mindset shifts?from?“I know what I want to find/search for” to “I want to explore and find things I didn’t even know I needed.”

Gen Z looks to TikTok as their primary source of inspiration and brand discovery/research, beating out search engines. TikTok rules trends, feelings, and culture for Gen Zers, who make up 60% of the app’s 1B+ users.

What the generations have in common

• All three generations shop primarily online for discovery, ease and convenience but also visit brick-and-mortar for the experience, affirmation and immediacy.

• All three generations prefer brands/retailers that provide experiences that are authentic and personalized, and if socially and environmentally friendly, all the better (especially with younger generations).

Comparative differences

• Gen X and Millennials value a bargain and seek out opportunities for discounts/freebies, while Gen Z will buy anything if they have the money on hand.
• Gen X and Gen Z are more alike compared to Millennials. While Millennials have an optimistic outlook on life, Gen X views the future with skepticism/cynicism and Gen Z with pragmatism and defeatism.
• Both Gen X and Gen Z are avid gamers, although their motivation behind gaming differs (to unwind or to socialize, respectively).

Similar but motivationally different

All three generations are tech savvy and adaptive, but digital use significantly increases with each new generation as users look to fill a specific need:

• Gen X: Technology provides useful tools to make life easier/more enjoyable.
• Millennials: As digital nomads, technology provides a convenient way to connect with people and brands alike.
• Gen Z: Using technology is the way they live their lives.

DCI helps brands and retailers adapt to reach every generation

At DCI Marketing, we consider the shopper experience in everything we do to craft customized retail spaces and programs. Learn more from Chad Brodsko, DCI's Senior Director of Digital Development & Strategy.

Visit dcimarketing.com to explore our retail solutions.