Generational analysis: Insight into consumer behaviours

This article focuses on comparing three generations - Generation X, the Baby Boomers, and the Silent Generation - with respect to how their attitudes toward apparel shopping have changed from a decade ago.

Declining love of apparel shopping

Over the past decade, consumers' love of shopping for apparel has declined across the board. In 1995, 53 per cent of Generation X said they either liked or loved to shop for apparel, compared with only 42 per cent in 2004. Shopping enjoyment has experienced similar double-digit declines among Baby Boomers and the Silent Generation: in 2004, only 31 per cent and 28 per cent of these groups, respectively, said they liked or loved to shop for clothes. Historically, consumers' love of shopping declines with age; however, the current retail climate is especially challenging for the apparel market.

Competing purchase options

One challenge faced by apparel retailers and manufacturers is that consumers are spending a greater share of their money on other products and services. For example, spending is up on cell phones (from 0.2% of expenditures in 1995 to 0.7% in 2004) and medical services (from 20% in 1995 to 23% in 2004). Clothing was left with only a 4.0 per cent share of consumers' total expenditures in 2004, down from 4.9 per cent in 1995. In dollars, this decline in share equates to a $324 billion loss, according to personal consumption expenditures data from the Bureau of Economic Analysis. However, decreased share of expenditures does not necessarily mean decreased unit purchases. As consumers have enjoyed a decade of deflating apparel prices, increased purchasing power has enabled them to get more apparel for less.

Shifting shopping preferences

Apparel's share of the consumer wallet has been reduced not only by increased spending on necessities, but by shifts in discretionary shopping. When Cotton Incorporated's Lifestyle Monitor asked consumers what products they preferred to shop for, fewer Gen-Xers and Baby Boomers opted for apparel than a decade ago, and more preferred to shop for electronics and groceries. However, a growing preference for clothes shopping has emerged in the Silent Generation. In 1995, only 27 per cent of 59- to 70-year-olds (who included the oldest members of this generation) said they preferred to shop for clothing, but clothes shopping was favored by 41 per cent of today's 59- to 70-year-olds.

The shift in consumers' shopping preferences is consistent with a shift in the retail channels at which they shop. Over the past decade, consumers of all generations have shifted more of their apparel shopping to mass merchants and away from more specialised channels, such as specialty, department, and chain stores. The largest shift has been among Gen-Xers; in 1995, 15 per cent said they shopped for apparel mostly at mass merchants, but by 2004, the figure had increased nine percentage points, to 24 per cent. The decline has been largest for specialty stores, as the percentage of Gen-Xers preferring this channel for clothes shopping fell from 26 per cent in 1995 to 16 per cent in 2004. Survey data suggest that consumers are shifting their apparel purchases to mass merchants because they are shopping this channel for other products. A solid majority (69%) of shoppers who bought clothes at mass merchants in 2004 reported that the last time they did so, they were shopping for something else.

Just as critical as shifting shopping preferences is declining interest in apparel. Consistently across all generations, an increasing percentage of consumers say they are less interested in clothes than they used to be. In 2004, this attitude was reported by 51 per cent of Generation X (up from 42% in 1996), 57 per cent of Baby Boomers (up from 54%), and 78 per cent of the Silent Generation (up from 65%).

Consumers' declining interest in apparel shopping likely is related to the significant increase in the percentage of consumers, across generations, who say they have too many clothes and do not need to shop for more. Reporting overflowing closets in 2004 were 38 per cent of Gen-Xers (up 12 points from 1996), 51 per cent of Boomers (up 17 points), and 69 per cent of the Silent Generation (up 17 points). Consumers seem to have reached a wardrobe saturation point as a result of the availability of inexpensive apparel offerings.

Another factor that could have lessened consumers' desire to shop for apparel is an apparent shift away from shopping as a social pastime. From 1995 to 2004, fewer consumers say they are asked for advice on clothing (43% of Gen-Xers, down 5 points, and 33 per cent of Boomers, down 5 points), and fewer say they feel better about their apparel purchases when they have a second opinion (51% of Gen-Xers, down 12 points, and 42% of Boomers, down 6 points). These declines suggest that fewer consumers are sharing their clothes-shopping experiences with others.

Effects of waning interest

The declining interest in apparel shopping manifests itself in many ways. Shopping more than one retail channel (cross-shopping) has declined across all three generations, consistent with a lack of interest in shopping for apparel, but also indicating increased loyalty to consumers' preferred channels. Of Gen- Xers, 21 per cent shop only one channel for apparel (up 10 points from 1997), as do 27 per cent of Baby Boomers (up 13 points) and 26 per cent of the Silent Generation (up 6 points).

Capturing consumers' attention continues to be a challenge. Another effect of decreased interest in apparel shopping is the declining percentage of consumers who look to external sources for apparel ideas. The number-one idea generator is what shoppers already own and know they like (cited by 71% of Gen-Xers and 70% of the Baby Boom and Silent generations); this is one of the few idea sources that has remained stable since 1995. Meanwhile, the percentage of consumers who rely on in-store displays and salespeople, people they see regularly, or commercials and ads has declined significantly across all generations. The declining use of in-store displays and salespeople is consistent with the shift to mass merchants and the decline in cross-shopping. Overall declines in the use of idea generators have significant implications for marketing opportunities, both in-store and through the media.

Advertising on the Internet may be an increasingly important way to reach consumers, as the percentage of shoppers browsing the Web for apparel has grown since 1997. Gen-Xers are the most likely to look for apparel on line (33%, up from 6% in 1997), followed by Boomers (24%, up from 4%) and the Silent Generation (10%, up from 3%). On-line browsing may have helped decrease the time consumers spend in the stoe per clothes-shopping trip. Compared with 1997, the average time in the store is down 3.5 minutes for Gen-Xers and 8.1 minutes for Boomers, while remaining about the same (up less than a minute) for the Silent Generation.

Enduring love of denim

While consumers' love of apparel shopping has declined, their love of denim has remained constant. The majority of consumers in 2004, as in 1995, say they 'like or love' wearing denim, and consumers continue to own a collection of denim garments- on average, 15.9 items for Gen-Xers, 14.5 for Baby Boomers, and 11.0 for the Silent Generation. Already at high levels in 1995, denim ownership by Gen- Xers increased the least, by 0.3 garments, while Boomers added 1.3 garments, and the Silent Generation added 1.1. Jeans were the most popular denim item in 1995 and continue to account for about half of all denim items owned, regardless of generation.

When purchasing denim jeans, consumers overall are mostly concerned with being practical, rather than looking good, an attitude that has held true for the past decade. Among men, a solid majority is most interested in practicality when buying jeans (71% in 2004, up 5 points from 1995). However, the last decade has seen a significant increase in the percentage of women whose main concern when buying denim jeans is to look good (49%, up 4 points). This shift was due mostly to Gen-Xers, of whom 53.6 per cent are now most concerned with looking good (up 6.5 points). No significant shift was seen for Baby Boomers (45.6%, up 2.5 points) or the Silent Generation (47.6%, down 0.3 points).

The shift toward buying denim to look good is consistent with the current trend toward premium priced denim. However, not all consumers are willing to pay premium prices for jeans. But even with the rise of premium priced denim, consumers say they would pay less today than in 1998 for a good-fitting pair of jeans (down $1.00 for Gen-Xers and the Silent Generation and $0.90 for Boomers), mainly as a result of apparel price deflation. Nonetheless, based on retail sales data from STS Market Research, prices have fallen less for denim jeans than for other apparel categories.

Cross-generational challenges to retailers

Generational segmentation of the consumer base is pivotal to a successful business. However, apparel retailers and manufacturers face an uphill battle to recapture the interest of consumers across generations. Many issues currently faced by the industry, such as competition from other product categories, consumers' loss of interest in shopping for apparel, and market saturation, span all consumer generations. Capturing consumers' attention and dollars will require innovative, fashionable apparel that will get them back into the mood to shop. Premium denim, though most attractive to Generation X, is an example of a product that has piqued consumers' interest and keeps them wanting more.

Source: www.cottoninc.com