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The Customer Acquisition Generation Gap Redux

January 8, 2013 By Jeff Weidauer
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Retail marketers have something new to keep them awake at night: the changing face of the American shopper that's well underway. Those changes are fraught with challenges we couldn't have imagined 25 years ago, largely due to the entry of mobile connectivity as a shopping tool.

It's the emergence of mobile that's really widened the gap between millennials and their parents, who are often baby boomers. Overall, boomers still tend to shop brick-and-mortar stores more frequently, especially during the holidays. They're more likely to review the piles of catalogs that show up in the mailbox every day, clip coupons and make purchases in-store.

Millennials, on the other hand, are prone to do research online before leaving the house, and any trip to a physical storefront is likely an effort to get a look at the real thing before ordering it online, sometimes while still in-store. Social media is a critical part of the shopping process as well; peer reviews and recommendations and feedback from friends — all in real time — are as important to these shoppers as price.

For retailers, the challenge is clear: there's a need to appeal to both generations without alienating either of them. Jumping too quickly into a digital-only experience that caters to millennials is to walk away from a piece of the $3 trillion buying power that boomers still wield. However, catering only to boomers doesn't work as a long-term strategy. Boomer spending will slowly decline as millennial incomes and discretionary spend increases.

J.C. Penney has become something of a case study in this shift. Ron Johnson, the company's CEO, came from Apple and is largely credited with the success of that brand's retail stores. J.C. Penney has been in the news a lot recently, and not in a good way, because of some of the changes Johnson has implemented in a quest to modernize and appeal to millennials.

The problem J.C. Penney has (unlike the Apple stores) is that its shopper base is almost exclusively boomers (or older). Unlike a more youth-oriented store (e.g., Apple), doing away with the trappings of old-school retail also meant shooing away the shoppers who were comfortable with that atmosphere. Unfortunately, this change happened before J.C. Penney was able to sell its hoped-for new clientele on how cool it was.


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