retail news in context, analysis with attitude

The Wall Street Journal this morning reports on the clear generation gap between Baby Boomers and the Millennial generation when it comes to shopping, a difference likely to be clearly delineated during the current end-of-year holiday shopping season, as Baby Boomers prefer to visit bricks-and-mortar stores and younger shoppers turn to their smart phones and computers to research and purchase presents. "Technology plays an increasing role in the generational shopping split," the Journal writes. "Millennials are 2½ times more likely to be early adopters of technology than older generations, serving as a leading indicator for retailers of what is likely to become mainstream, said Christine Barton, a partner at Boston Consulting Group. Millennials are more likely than older shoppers to check out brands on social networks (53% versus 37%) and use mobile devices to read reviews, research products and compare prices while shopping (50% versus 21%), according to a recent BCG/Barkley report."

Here's how the Journal frames the broader issue:

"Retail chains are struggling with how to ... capture the attention of the so-called Millennial generation, ages 16 to 34, but fearful that moving too fast will alienate baby boomers.

"The 79 million people who make up the Millennial generation wield $200 billion in annual spending power. While that is only a sliver of the $3.4 trillion that baby boomers spend each year, analysts say, retailers need to try to nab those younger shoppers now, because their spending is likely to rival the boomers' as early as 2020 and they already exert a disproportionate influence on their parents' spending decisions.

"Moreover, during the holidays, shoppers age 25 to 44 plan to spend the most of any age group, about $820, according to the NRF. But shoppers aged 45 to 64 are also heavy spenders, planning to spend about $760."
KC's View:
There is no question that retailers have to adjust their approaches to cater to the next generation of shoppers as that group increasingly becomes the center of the demographic target. And, as the Journal makes clear, a lot of retailers are concerned about becoming JC Penney, which many see as moving too far too fast in changing its approach (though I think there was a pretty good argument that moving far and fast may have been the retailer's only option).

I do think that things are not as cut-and-dried as the Journal suggests. There are a lot of Baby Boomers who are conversant with these newfangled smart phones and tablet computers, even able to do some shopping on them. (I would be one of them.) There is a family profiled in the Journal piece that resides in Columbus, Ohio, and both parents come from the educational community. And yet, the mom professes to have no idea what a Kindle does ... which I find a little hard to believe. (She is a 54-year-old teacher, for goodness sake. I would worry about having my children taught by a 54-year-old teacher who doesn't know what a Kindle does.)