• Home
  • News
    • Retail sales fall in December after strong November

    • Tigerlily parent looking for new boss after letting CEO, CFO go

    • Coronavirus to have “significant” effect on economy, daigou trade

    • Nick Scali sees profit falter on consumer fears

    • Australian dollar strengthens

    • ACCC says it needs more time to consider Bunnings acquisition

  • PREMIUM
    • COO steps down from Sportsgirl

    • Top 4 takeaways from NRF 2020

    • Tony Bianco steps into overseas market

    • From the source: Cayley and Doron Ostrin, The Urge

    • St Lucia sale sets Qld benchmark

    • Retail news from around the globe

  • E-commerce
    • Why the retail store is here to stay in Australia

    • Temple & Webster benefits from shifting holiday season in 1H20

    • PAS Group earnings fall and sales rise as customer profile shifts

    • What the death of cookies means for retailers

    • Keeping up with the omnichannel shopper

    • POLL: How much does the economy impact the retail industry?

  • Property
    • St Lucia sale sets Qld benchmark

    • Scentre lauded on gender equality

    • Vicinity makes CDP's A list

    • "A new line in the sand": Peri Macdonald talks green shopping centre design

    • Where did it all go wrong for Kaufland?

    • Ikea eco-store under construction in Vienna

  • Technology
    • Burden on CIOs to prep workers for automated future, Gartner says

    • Temple & Webster benefits from shifting holiday season in 1H20

    • Is the threat of e-commerce overplayed?

    • Ikea eco-store under construction in Vienna

    • Shoes of Prey founder takes fresh approach to plant-based meat

    • Bose shutting stores across Australia, North America, Europe, Japan

  • Video
    • Retail Insights: Amy Lynes, Lush

    • Retail Insights: Anna Lee, The Iconic

    • Retail insights: Chau Banks, Revlon

    • Retail insights: Philip Corne, Louis Vuitton Australia

    • Penchant for portable payments fuels m-commerce spike

  • Podcasts
    • SPONSORED: Freshmax strategy bearing fruit

    • Pandora bets big on Melbourne

    • Learnings from earnings season

    • Bringing technology to the bedroom

    • Taking a piece of Australiana to the UK

    • Platform with purpose - engaging millennials

  • Directory
  • Shop
  • Contact
  • Academy
Log in

Welcome, please sign in, registration is free!

Social login

Please make sure your email is set as public in Facebook/LinkedIn in order to use our social login feature.

Email login

Lost password
×
Follow us
Subscribe

SUBSCRIBE FREE NEWS BRIEFS

Get breaking news delivered

Lost password
Follow us

Busted: myths about customers you need to forget

October 15, 2019
Jason Toshack

Knowing the customer – their wants, needs and attitudes – is key in every industry, but even more so for retailers. Yet, in spite of its importance, research commissioned by Oracle NetSuite suggests that many retailers still struggle to understand their customers.

The study of 1200 consumers and 400 retail executives across the US, UK, and Australia found that 44 per cent of the retailers have made little progress towards tailoring the retail experience to different generations. That marks a significant missed opportunity for these retailers, as 42 per cent of consumers who participated in the survey would be willing to pay more to receive a more personalised experience in-store or online.

The study points to a major “generational gap” between retailers and their different consumer segments. Retailers often make assumptions about preferences of certain groups of consumers, like Baby Boomers or Millennials, which may not reflect their actual wants or needs.

When compiling the research insights, we discovered three major generational myths which often hold retailers back from meeting the needs of their consumers from a range of age groups:

1.     Retail stores, and older consumers, are over

Retailers may assume that the in-store experience has waned in importance as a result of the rise of e-commerce and other online sales channels. However, actual consumer behaviour suggests otherwise. In fact, Gen Z and millennial customers are actually more likely to shop in-store than older generations, with 43 per cent of those surveyed doing so this year compared to 29 per cent of Gen Xers and just 13 per cent of Baby Boomers. Instead of pursuing an online-only strategy, retailers should consider a more nuanced multichannel approach that plays to the strengths of physical outlets, like immediacy of purchase and expert guidance from sales staff.

This brings us to the question. Why are older generations less likely to go in-store? Of those surveyed, only 27 per cent of Baby Boomers describe today’s in-store experiences as inviting, compared with 57 per cent of Gen Z and millennial shoppers. Further, 52 per cent of Baby Boomers who participated in the study said they never receive any sort of personalised shopping experience, either online or offline.

This means that retailers should be mindful to cater for these shoppers, who often hold more purchasing power. More in-store interactions from staff, for example, coupled with offers and services catering to specific generational needs, can improve the relationship with Baby Boomers as well as other generations like millennials.

2.     Technology is the ‘silver bullet’ 

Most retailers tend to view digital technology as an unprecedented opportunity to engage customers. Almost four in five of the retail executives believe AI and VR technologies will increase sales. However, only 14 per cent of the consumers participated feel those same technologies will significantly impact their purchasing decisions. And while more retailers seek to automate customer engagement for greater efficiency, doing so may cost more in the long run.

Despite the relative maturity of AI-enabled chatbots, the study found that only 26 per cent of Australian consumers frequently use them to engage with retailers, while 48 per cent have never engaged with a retailer in this way.

As retailers upgrade the customer experience through new technologies, they should take the time to understand how different generations will respond to these changes. While one in two Millennials like the idea of novel technologies like AI and VR in retail stores, only a minority of other generations – Baby Boomers, Gen X, and even Gen Z – feel attracted to the prospect of using these. Rather than assuming technology will automatically raise sales across all consumer segments, retailers may be better off investing in the fundamentals of customer experience, like additional training for staff or deeper personalisation of existing technologies, like offers over email.

3.     Social media dictates youth spending

Perhaps the biggest generational myth contradicted by our research is the influence that social media has on consumer’s purchasing habits. Although 98 per cent of the retail executives believed that social media engagement builds stronger, more valuable relationships with customers, only 12 per cent of the consumers felt that social media changes how they feel about brands. In fact, only 25 per cent of the millennials said they used social media to get to know a brand, only slightly more than the 21 per cent of the Baby Boomers.

Those results suggest that social media reinforces existing perceptions about retail brands, rather than changing them or developing them from scratch. While social media channels play a part in engaging younger consumers, retailers should avoid focusing on them at the expense of other, more effective forms of engagement. It’s worth noting that 56 per cent of the millennials, the generation most commonly associated with social media reliance, felt most welcome when they experience in-store interactions from a brand. In an increasingly digital marketplace, retailers can differentiate themselves by going back to basics: offer personal service and expert advice that all consumers, including younger ones, crave.

Busting generational myths

Retailers should be conscious not to stereotype their customers, intentionally or otherwise. Our research suggests that common assumptions about demographics and retail channels often represent only part of a much more complex picture. The more retailers engage with, and draw feedback from their customers, the better they can understand their needs. Only with that understanding can they make informed decisions as to which channels to invest in, when to do so, and who to target.

Jason Toshack is the managing director at Netsuite for Australia and New Zealand.

Related posts:

  1. Krispy Kreme’s kicking goals online
  2. Urban grooves
  3. You know you’re a retailer when…
  4. Satisfying customers at any cost
News, People, Analysis
customers, stores
Previous Article
Next Article

Comments

Comment Manually Cancel reply

You must be logged in to post a comment.

Most Read

ACCC says it needs more time to consider Bunnings acquisition

Why laptops could be facing the end of the line

Tigerlily parent looking for new boss after letting CEO, CFO go

Why the retail store is here to stay in Australia

How Moir hopes to recover some of David Jones’s lost glory

What’s in store for supermarkets in 2020 and beyond

Colette by Colette Hayman becomes latest victim of weak retail environment

Inside Retail Polls

How much do you think the broader Australian economy affects retail?
Vote

Twitter

Nick Scali reveals 15 per cent drop in profit in H1 and says consumer confidence has been too uneven for it to prov… https://t.co/213gUQvSQa

4 hours ago

In a shocking leadership shake-up, Tigerlily's parent has ousted the CEO and CFO just three months after they unvei… https://t.co/Qvc5q00SiE

7 hours ago

While the wave of retail failures continues to grow, our contributor thinks retail stores are here to stay. Here's why. #retail #ausbiz

1 day ago


All rights reserved © InsideRetail 2019

  • Advertise
  • Terms of Service
  • Privacy
  • About us
  • Contact
Octomedia Pty Ltd
Internet Retailing
Franchise Business
Inside FMCG
Inside Small Business

All rights reserved © InsideRetail 2019

sponsored

We use cookies on our websites. You are free to manage this via your browser setting at any time. To learn more about how we use the cookies, please see our Terms and Conditions and Privacy Policy.

Privacy Preference Center

Consent Management

Woocommerce Checkout

I have read and agree to the {{terms-and-conditions}} and {{privacy-policy}}.

Comment And Review

I have read and agree to the {{terms-and-conditions}} and {{privacy-policy}}.

Subscription Page

I have read and agree to the {{terms-and-conditions}} and {{privacy-policy}}.