BABY BOOMERS, GEN XERS BUY­ING MORE ON­LINE THAN THEIR IN­TER­NET-SAVVY COUN­TER­PARTS

Philippine Daily Inquirer - - MARKETING PULSE -

Un­der­stand­ing and keep­ing pace with what drives peo­ple to shop and buy on­line is crit­i­cal to suc­ceed­ing in the dig­i­tal world.

In re­sponse to de­mand for greater in­sights re­gard­ing the on­line cus­tomer, a new re­port by KPMG In­ter­na­tional an­a­lyzes the on­line shop­ping pref­er­ences and be­hav­iors of more than 18,000 con­sumers in 51 coun­tries, by ge­og­ra­phy, gen­er­a­tion, and prod­uct cat­e­gory.

“To­day’s con­sumer no longer goes shop­ping, but is shop­ping, all the time and ev­ery­where. And in a truly global on­line mar­ket­place, com­pe­ti­tion is no longer lim­ited to lo­cal shops dur­ing reg­u­lar busi­ness hours. Con­sumers can eas­ily buy from re­tail­ers and man­u­fac­tur­ers lo­cated any­where in the world—or from those with no phys­i­cal re­tail lo­ca­tions at all,” says Willy Kruh, KPMG In­ter­na­tional’s global chair for con­sumer mar­kets.

“In­creased com­pe­ti­tion, com­bined with con­sumer de­mand for richer ex­pe­ri­ences, means that re­tail­ers need to re­think their on­line strat­egy. For many re­tail­ers, cre­at­ing an on­line shop­ping ex­pe­ri­ence en­hanced by tech­nol­ogy such as aug­mented and vir­tual re­al­ity or 3D is be­com­ing at least as im­por­tant as pro­vid­ing con­ve­nient and per­son­al­ized or­der­ing, pay­ment, and de­liv­ery op­tions.”

The num­ber of on­line trans­ac­tions made by sur­vey re­spon­dents av­er­aged 17 pur­chases per year, or 1.25 per month. Gen­er­a­tion X con­sumers (born be­tween 1966 and 1981), av­er­aged nearly 19 trans­ac­tions per per­son per year, and they made more on­line pur­chases in the past 12 months than any other age group.

In fact, gen­er­a­tion X con­sumers made 20 per­cent more pur­chases than the “tech­savvy” mil­len­ni­als (born be­tween 1982 and 2001).

Kruh com­ments: “Stage of life and in­come lev­els are cer­tainly pri­mary fac­tors driv­ing both on­line and off­line shop­ping, and gen­er­a­tion X con­sumers, many of whomare more es­tab­lished in their ca­reers and may be build­ing homes and fam­i­lies, are likely buy­ing more con­sumer goods than the younger mil­len­ni­als over­all. As mil­len­ni­als con­tinue to en­ter the work­force and adult­hood, how­ever, their on­line shop­ping ac­tiv­ity is ex­pected to surge and even far sur­pass the lev­els cur­rently ex­hib­ited by older gen­er­a­tions.”

And while it may be pre- sumed that the more tra­di­tional baby boomers ( born be­tween 1946 and 1965) are less in­clined to shop on­line than younger gen­er­a­tions, the sur­vey re­vealed that in fact they shop on­line just as fre­quently as mil­len­ni­als. Fur­ther­more, baby boomers were more likely to spend more per trans­ac­tion than the younger con­sumers (aver­age pur­chase for baby boomers was $203, $190 for gen­er­a­tion X, and $173 for mil­len­ni­als).

When com­par­ing the im­pact of on­line ver­sus off­line touch­points that cre­ate the first trig­ger mo­ment, of note is that 52 per­cent of con­sumers cited at least one off­line chan­nel as a source of ini­tial aware­ness, and 59 per­cent cited one or more on­line chan­nels.

Re­tail web­sites or on­line shops were the most com­mon source of ini­tial aware­ness, cited by nearly a third of con­sumers, and on­line ad­ver­tise­ments were cited by 15 per­cent. At the same time, phys­i­cal shops were the sec­ond most pop­u­lar source of aware­ness, cited by 22 per­cent of con­sumers.

Mil­len­ni­als were not only more likely than the older gen­er­a­tions to be in­flu­enced by on­line sources such as so­cial me­dia or peer re­views—they were also more likely to be in­flu­enced by off­line chan­nels.

Mil­len­ni­als were 25 per­cent more likely than baby boomers to have seen their most re­cent on­line pur­chase in a shop, nearly 50 per­cent more likely to have talked to a friend about it, and more than twice as likely to have seen some­one with it.

Kruh says: “E-com­merce is not an on­line-only af­fair. Both on­line and off­line chan­nels are ef­fec­tive in cre­at­ing con­sumer aware­ness and de­mand, es­pe­cially when used to­gether. Fur­ther­more, de­spite the rise of on­line shop­ping, e-com­merce still makes up a rel­a­tively small per­cent­age of to­tal re­tail spend­ing. Re­tail­ers’ brick and mor­tar strate­gies need to con­tinue to evolve to at­tract cus­tomers into their stores, and to com­pete with on­line re­tail­ers open­ing their own phys­i­cal out­lets.”

The num­ber one rea­son why con­sumers shop on­line is for the con­ve­nience of shop­ping at any hour on any day (cited by 58 per­cent as a top rea­son). This is fol­lowed by hav­ing the abil­ity to com­pare prices (54 per­cent), or to find on­line sales or bet­ter deals (46 per­cent). All age groups re­ported the same top three driv­ers.

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