Millennials are often touted as the key segment that brands must effectively connect with because they represent the future of marketing.
Yet, often overlooked is the baby boomer segment, which could pose problems for retailers.
Why?
Well, Loyalty360 caught up with Phil Seward, regional director, Americas, ICLP, a global marketing agency that is part of the Collinson Group, to find out more.
Why are retailers in trouble by overlooking the Baby Boomer segment?
Seward: Retailers that overlook customers in the Baby Boomer demographic risk missing out on valuable financial opportunities. This age group controls seventy percent of the disposable income in the U.S., making them some of the most affluent generations of customers. Retailers face the possibility of losing their business to competing brands when neglecting their preferred rewards, failing to recommended relevant products or services, and overall communicating poorly.
It seems there has been so much talk about marketing to Millennials that Baby Boomers have gotten lost in the shuffle. Why is that?
Seward: Since Millennials surpassed Baby Boomers as the largest generation in 2016, retailers naturally assume marketing to millennials as the most tech-savvy demographic is the smartest strategy in an increasingly mobile-forward landscape where consumers are adopting online and mobile shopping habits. Many don’t consider that those same rewards apps are also used by Baby Boomers, with 84% using a smartphone for online shopping.
What do brands need to do better to effectively engage the Baby Boomer segment?
Seward: Only twelve percent of baby boomers expect that brands will spend the time to get to know them and understand what they want. Personalizing rewards, making relevant recommendations, and being more responsive to their needs are ways to demonstrate you value their loyalty. Individualizing is also key for this generation. Tailoring communications and recognizing them according to their personal relationship with your brand will make them feel special and, in turn, drive loyalty and repeat purchases.
What are brands doing well regarding their marketing to Baby Boomers, and where do the challenges lie?
Seward: Brands are striking a chord with baby boomers when it comes to the quality and reliability of their products, with more than half saying they generally trust this in the brands they frequent. Trustworthiness is one ingredient needed to build more devoted relationships and we’re glad to see retailers progressing in this way. Apart from better tailoring marketing and loyalty efforts, retailers must know Baby Boomers value brand responsiveness when things go wrong. In order to maintain their loyalty, brands must remember to own up to mistakes and quickly rectify customers’ issues.
Due to these findings, what behavioral changes have brands seen from Baby Boomers?
Seward: As the retail experience becomes increasingly complex and further focuses on the omnichannel experience, we’re finding that Baby Boomers are significantly less loyal to retailers because they feel overlooked and not adequately rewarded, with 93% willing to shop at competing brands. This also affects their expectations from retailers as 80% don’t assume brands will make relevant recommendations for them. Nearly all consumers devoted to their favorite retailers would recommend them to others, but only one-third of Baby Boomers are doing so regularly, demonstrating an overall lack of enthusiasm and commitment.