In an interview with PYMNTS, Paco Underhill, a psychologist and retail consultant and author of "Why We Buy," discussed how the wealth concentration among older consumers is shifting loyalty dynamics.
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GLOOlder consumers, who typically have more disposable income, tend to be more loyal than their younger counterparts. Brands that successfully capture their loyalty can build long-term, valuable relationships. In an interview with PYMNTS, Paco Underhill, a psychologist and retail consultant and author of “Why We Buy,” discussed how the wealth concentration among older consumers is shifting loyalty dynamics.
“The concentration of wealth in North America is primarily in the hands of those 55 and older,” Underhill explained. “By age 40, 80% of our weekly purchases are consistent. For instance, I’ve chosen to dislike Gulden’s Mustard and only use Grey Poupon. This indicates that my consumption habits and product trials differ greatly from those of younger individuals.”
However, the remaining 20% of purchasing decisions represent a significant opportunity. According to the 2023 study “Consumer Inflation Sentiment: The False Appeal of Deal-Chasing Consumers” by PYMNTS Intelligence, which surveyed over 2,100 U.S. consumers, Gen X, baby boomers, and seniors are more likely to be persuadable shoppers. These groups prioritize good prices along with convenience and brand loyalty rather than just chasing deals. Specifically, 41% of Gen X consumers and 42% of baby boomers and seniors fall into this category, compared to 33% of millennials and 36% of Gen Z shoppers.
Underhill highlighted that older shoppers prefer marketing that “bubbles down” instead of “bubbles up.” Unlike younger consumers, who rely on peer recommendations and social media for shopping inspiration, older consumers are more influenced by traditional advertisements.
Moreover, as retailers aim to attract these older consumers, who control a significant portion of spending power, Underhill pointed out that their investments in omnichannel technologies often fail to address these consumers’ needs.
“One challenge in the digital design realm is that most web designs reflect the age of the designer rather than the broader public,” Underhill noted.
PYMNTS Intelligence data shows that older consumers are often excluded from the retail omnichannel transition. The “2024 Global Digital Shopping Index: U.S. Edition,” created with Visa Acceptance Solutions, found that 58% of U.S. baby boomers and seniors prefer in-store shopping without digital engagement, much higher than the 44% population-wide average. Additionally, only 18% of this generation are Click-and-Mortar™ shoppers, preferring a blend of digital and in-person shopping experiences, compared to nearly a third of the overall U.S. population.
Underhill suggested that generational preferences should shape not only digital offerings, requiring greater accessibility but also the in-store environment. “For instance, the choice of music in the store should vary throughout the day to match the generational demographics of the shoppers present at different times,” he said. “There’s a time to play Frank Sinatra and a time to play Death Cab for Cutie.”
Source: PYMNTS
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