What’s So Different About Gen X’ers?
Retailers and brands are always trying to "crack the code" in the understanding of various consumer segments. Much has been written lately about Millennials and Baby Boomers. The results of a recent study on Gen X CPG/healthcare shopping habits, from SymphonyIRI’s MarketPulse my help fill in some gaps. According to the study, Gen X (defined as those born between Boomers and Millennials, currently aged 35 to 44) has a favorable outlook on the economy, but aren’t free spenders.
Gen X entered the adult world after the 1987 stock market crash and recession, so many experienced job loss early in their careers and some moved back in with their parents. That experience shaped their attitudes, in some of the same ways that the Great Recession experience affected Millennials. Meanwhile, a Pew Research study, as reported in Business Insider, says that Gen X got hammered with the Great Recession as well, and is less confident about their retirement prospects than they were three years ago. According to the report, Gen X’ers median household net worth has fallen 59 percent from 2005 to 2010.
SymphonyIRI (a RetailWire sponsor) says Gen X’ers are actually more optimistic than average shoppers, but:
- Thirty-seven percent buy brands on sale (vs. what they really want), compared to 45 percent of Millennials and 27 percent of Baby Boomers.
- Thirty-two percent select products to build meals at the lowest possible cost vs. 39 percent of Millennials and 27 percent of Boomers who do the same.
- Thirty-three percent choose products based on loyalty card discounts compared to 35 percent of Millennials and 25 percent of Boomers.
- Twenty percent stay out of certain aisles to avoid impulse purchases, vs. 22 percent of Millennials and only 15 percent of Boomers.
Gen X’ers appear to be well prepared for their shopping trips. Sixty-nine percent make shopping lists using a variety of tools, 49 percent review circulars and 48 percent use coupons. Fifty-five percent download recipes, 51 percent download coupons from retailer sites, and 38 percent research products online. Thirty-five percent use deal sites, 31 percent use social media to get coupons, and 23 percent look for updates from retailers and manufacturers via texts or e-mails.
Discussion Questions
Do you agree that Gen X has been hit harder by the Great Recession than other demographic groups? Do you think Gen X’ers’ shopping habits have permanently changed and, if yes, what should brands and retailers do about it?
In a word … NO. Were they impacted? Yes, just like everyone else. Did the recent recession change the way they shop? No, just like it hasn’t really changed the way most others shop either.
The media loves to prop up the notion of how consumers are forever changed by an economic downturn. But the truth is that consumers are just that … consumers. We trade up. We trade down. We’re aspirational. Sometimes I think market researchers get lost in the weeds.
This article does not help us understand Gen X shopping habits. We’re reading about 51% here and 35% there. Undoubtedly there is another perspective … probably related to life stage. Are the 51% married with children or single living alone? Some segmentation might give us a better perspective on what these numbers really mean.
As for being hit harder in the recession, these are the people who have a future to look toward. In that regard they may feel pessimistic, however, they still have the opportunity to learn new skills for the way to make a living now and in the future.
All age groups were hit hard by the recession and as a result, all have made some permanent changes to their shopping habits. Consumers are looking for value. Value can be a lower price (although only a few retailers can successfully play this game), bundling products, loyalty rewards or customer service. Retailers need to focus on at least one of these attributes to remain competitive.
Economic downturns discriminate — and therefore impact — on the basis of income and opportunity, not age.
As I wrote in my Millennial special report, this generation is most like Boomers’ grandparents. They are the “thrifters” concerned with reusing, regifting and paying the least they can. I would suggest it is at least as much a result of seeing their own parents up to their eyes in debt as much as the economy. Does this mean they will always shop this way? I’m not so sure. As the largest consumers of branded electronics buy Apple — it isn’t they are cheap — just prioritize differently.
Growing up during defining moments in our human history forever change and forge our behavior moving forward. My parents grew up during WWII in Switzerland where food rationing was commonplace. This experience defined forever their respect and discipline about food. Rarely was any food ever thrown out. Credit was viewed as a curse. I was brought up in a household where the financial golden rule was, if you didn’t have the cash to buy something you simply couldn’t afford it.
Living through the recession and the financial discipline that it dictates has changed the way Gen Xers and Millennials will respect and handle their finances moving forward. I can see the positive effect that it has had on my Millennial son and daughter. These experiences merged together with the empowerment and transparency of the empowerment of the connected consumer has forged more discipline when it comes to finances.
Gen Xers and Millennials are also more aware and dialed in to relevant social issues. It is my hope that these changes are not merely short term aberrations but remain engrained into their fabric moving forward.
GenX was having a tough time without the recession. A smaller generation than the Baby Boomer generation by 15-20%, Gen X has lived in the Boomers’ shadow. Their careers were impacted by multiple recessionary cycles, incomes were impinged and career mobility restricted. Now they continue to wait patiently while fiscally bruised Boomers hang onto their jobs even longer. To complicate matters further, Gen X had larger families on average than their Boomer counterparts, adding to the financial strain.
They are price conscious out of necessity, but also proud, so retailers should be very careful about how they frame value to this group. They’re technologically savvy and aren’t afraid to use their connectedness to fuel cynicism about brands.
The best way forward for brands with this cohort is to be honest and genuine about what they sell, illuminate the category — delivering lots of information and act with a high degree of immediacy, dealing with interactions in real time. This is a generation that will keep retailers on their toes.
Many of the statistics here mirror the wealth of the cohort, with Millennials showing the least amount of disposable income. Perhaps more meaningful is the impact of the recession on lasting behaviors of both the Millennial and Gen X cohorts. These two groups have been trained to seek the most value for their money and their behaviors…and it is this dynamic which will transform marketing programs well into the future.
With the Gen X group the opportunity to get back to some basics or remain in the basics is evident.
1. Keep the “hard coupons” coming (circulars and mail) – this group is not that social and not totally dedicated to live online.
2. This generation is “TV stronger” and watches popular shows on real TVs – not their iPads or phones or laptops.
3. The Gen X – as stated – are more conservative – so try to think, act, and “look” that way. Savings driving promotions and “smart shopper” efforts via loyalty cards.
The Gen X group will stay their own way while the Millennials shift with the retail wind and the boomers (like me) just fade away….
I don’t think they were hit any harder than other generations. I think the habits of most shoppers have changed and the retailers have trained them not to leave the couch or open the wallet for anything else than a sale.
I think it presumptuous to assume that this group has been hit harder than other groups given that most of this group is approach their peak earning years and still have time to save for the future. I will agree that this group has been exposed to the realities of a tough economy and much of their shopping behavior reflects that reality.
From all and I know and sense about this group, they will remain reasonably frugal and will use technology robustly to add value and expediency to their shopping trips. To reach this group effectively, I would advise retailers to expand their horizons beyond traditional media. This shopper group appears to be poised to embrace any tool that allows them to effectively plan their trips and save them money in doing so, and if you can provide these touch points with personalization and relevancy, you will get more than your fair share of their dollars.
Basic theory behind the Generations Model is that our values and behaviors are set when we are young. If you believe the model, then recent economic shifts are unlikely to produce major long-term changes among Gen Xers. There may be effects among children who experienced the “Great Recession” that will carry over into the future.
Yes they have been hit harder than most groups and this has made a lasting impression on the way they shop and how they spend.
They still seem to like some of the better things in life, but will save money in other places to have the neat stuff they want.
Ryan’s right in saying that income levels rather than age are a bigger factor here. Only thing I can add to this is that the younger generations are often strapped with enormous college debt, and the ones “lucky” enough to have bought a house at the end of the boom now carry mortgages higher than what the property is worth. You can’t dig out of either of these things quickly, and it has to affect their spending habits. As a boomer, I am also spending less so I can help out my cash-strapped kids (all of whom have great jobs) pay off their debt load. But again, this all ties back into Ryan’s point about income levels.
I would add that IMHO, income disparities and the gutted middle class are enormous factors that we as a nation don’t seem able to fix.
The baby boom has been hit hardest because many of them have lost everything whether they yet realize it or admit it or not, including hope for the future. They have no time to recover from a financial setback so late in life. They will work until they die and make less and less as they approach their end.
Gen X was in the best position in the recession because they were younger and more mobile. They either kept their job or found another. They have learned hard financial lessons and have time to recover.
Gen Y is in the best position because they’ve seen their parents go through and have also themselves been going through the wringer and these numbers show they have made serious adjustments in their spending as compared to the two generations ahead of them. Like someone else commented, they are most like the loyalist generations in their spending and economic values and have the most time to save for the future once they have enough income to save anything.
Unfortunately marketers have lost the most. They are still playing the price/discount game and they’ve been figured out. The majority of them can’t sell much of anything at full price anymore.
The latest research from the Notcom Consumer Institute shows that nearly 50% of consumers were hit harder (by the recession) than average, but a similar percentage were hit less hard; also, similar percentages were both less and more likely to save, spend, shop or do something, than average…. Whatever: the data from SRMP doesn’t support the premise, as the numbers for the age group lie between the other two — not outside them.
I am astonished by the number of business people that continue to call this six year economic disaster a recession. For the record there is in fact 15 percent of the labor force unemployed for one to five years. The world market is far worse with a minimum of 23% unemployment. Our current real estate upswing is in fact a short sale disaster creating billions more of red ink for weak balance sheets to eat. The proper name for this sort of economic continuous decline and or stagnation is depression.
As for what generation got hit worse, well they are the unborn with their 16 trillion dollar (and skyrocketing) plus interest debt that is already overdue and pushing down their credit rating.
The best way to start effectively dealing with a problem is to first know what you are dealing with. There are large numbers of every generation in “all” economic categories getting crushed every day with no sign of the bottom of the barrel.
I would agree that Gen X was hit hardest, in so far as a ‘loss of confidence’ that things will get better. This was a generation that was given everything by their Boomer parents, but as the Boomers were hit, Gen X lost not only their positions, but the safety next that was always there — double-whammy!
Millennials need time and context to understand how they’ve been affected by the economy. As a young executive, it wasn’t until I was older that I understood the impact of President Carter’s time in office. It’s DeBono’s Village Venus Effect.
Regarding who has been hit the hardest; Millennials have time to overcome the impact of the economy. Baby Boomers aren’t afforded this luxury. Many people in their 50s and 60s have lost any hope to ever retire.
The article fails to separate consumerism and generational habits. The big issue is how Millennials receive and digest information. The ‘Instant Poll’ results indicate at this point (Tuesday 9:00am) 40% of those responded believe the best way to communicate with Gen X consumers is via traditional media. Perhaps different categories require different methodologies. However, every piece of research I read and my clients continue to reinforce that Millennials are ‘digital natives’ (sorry for the cliche) and they’re using technology to decide where to shop.