Should department stores talk less about Millennials and more about ‘heavy spenders’?
There’s more than one way to slice the demographics when it comes to identifying who is spending the most in department stores, according to a new study.
Instead of focusing on Millennials as a sought-after demographic, the study by Viant, a subsidiary of Time, Inc., defines the most important department store shoppers as “heavy spenders” and explores the characteristics of this group. Heavy spenders exhibit three main characteristics:
- A tendency towards gift-giving, with a 29 percent greater likelihood to be shopping for a gift than other customers;
- A desire to shop and return through multiple channels;
- A tendency to shop via smartphone.
In terms of media consumption, heavy spenders tend to stream online content and are 70 percent more likely to own a Smart TV than lesser spenders.
The study splits out heavy spenders into three subcategories:
Digital Introverts: This category accounts for 16 percent of all department store shopping, spending nearly three times more on average than a standard holiday shopper. Surprisingly, members of this segment do not enjoy shopping in department stores. Rather, they pursue shopping through digital channels. Digital introvert status does not skew towards one demographic.
Dads (or parents, with 61 percent trending as male): This category plans in advance for shopping trips and relies mainly on online research for product information.
Convenience Shoppers (67 percent female): This category consists of shoppers who like to get in and out of the store quickly. They appreciate available clothing sizes, well-organized merchandise, store location, a good return policy and easy parking.
Respectively, the average amount each segment spends during the holiday season is $665, $617 and $576.
The study sees focusing on specific shopper segments and recognizing “different personality types” as key to effectively serving customers. It suggests taking steps such as using CRM data to arrive at this fuller view of the customer segment.
Some retailers appear to be moving toward making these kinds of more granular distinctions between shopper segments, rather than lumping together an entire age cohort. For instance, J.C. Penney recently described its emerging customer base as “Millennial moms,” and has been tweaking its product assortment to address the needs of that segment.
- Examining The Three Heaviest Spending Retail Shoppers – Viant
- Millennial shoppers are heading to JC Penney – CNBC
DISCUSSION QUESTIONS: Should department stores consider retooling their offerings to reach the three sub-categories of heavy spenders, and what should they do to reach them? How important is it for department stores to base their offerings on data-driven, granular understandings of who their customers are and how they behave?