An A.T. Kearney and NPD study points retailers toward new ways to connect with different customer segments. Retailers and apparel brands should target customers on multiple channels because age isn't everything.
With the recent downturn in performance by department stores and slow growth in total U.S. apparel sales, retailers and apparel brands are searching for innovative strategies to connect with consumers. While many retailers are targeting Millennials to drive growth, a new study from A.T. Kearney and The NPD Group highlights areas of opportunity across all generations and uncovers multiple purchase drivers within each generation.
"Everyone's talking about Millennials now, but there's real risk in ignoring other generations who still wield tremendous purchasing power," explains NPD Chief Industry Analyst Marshal Cohen. "And, when it comes to Millennials, the other thing many retailers fail to understand is that not all Millennials are created equal. Depending on lifestyle and life stage, Millennials could be more—or less—likely to buy your brand."
According to the study, "Age Isn't Everything," Millennials do surpass other generations in sheer volume of items purchased in key apparel categories. Compared to Boomers or Gen X, Millennials are 1.5 to 2.4 times more likely to have purchased three or more items in a category during the past six months. However, Millennials represent only 38 percent of total apparel spend in the United States, indicating that other generations should not be ignored.
Furthermore, the study illustrates that age alone does not drive purchasing. According to the study, the following factors drive greater purchasing for apparel in every generation:
- Kids: Parents of all generations purchase more jeans and activewear compared to those without kids.
- Active lifestyles: Consumers who are physically active purchase more—even in categories outside of activewear
- Fashion-forward attitudes: They shop more for all brands, not just high fashion
In fact, AudienceSCAN found 18.2% of Fashionistas have children aged 13 to 17, and 16% have kids aged 6 to 9. And 37% of Fashionistas intend to buy activewear (yoga, running, fitness) in the next 12 months.
Helen Rhim, A.T. Kearney principal and co-author of the study commented, "It is interesting to note that life-stage differences in purchasing behaviors appear to be most significant within the ranks of the Millennials. Married Millennials purchase more than their single peers, and Millennials with children are far more likely to be heavy purchasers of comfortable clothes (jeans and activewear) rather than dresses and bras.
Target Fashionistas with sponsored search results (like on Google, Yahoo or Bing), because AudienceSCAN reported 36% of Fashionistas took action based on them in the past month.
Hana Ben-Shabat, A.T. Kearney partner and co-author of the study, stated, "Age is only one piece of the puzzle. By targeting Millennials as a cohort, retailers are missing the real drivers of purchasing. It's important to target each segment and adjust your value proposition accordingly."