The FINANCIAL — KPMG’s global online consumer report, which analyses the online shopping preferences and behaviours of more than 18,000 consumers in 51 countries, has revealed that Baby Boomers (born between 1946 and 1965) are the generation that spend the most online while Millennials (born between 1982 and 2001) spend the least.
Despite the common belief that the upswing in online shopping is largely driven by the younger and more ’tech-savvy‘ Millennials, Generation X consumers (born between 1966 and 1981) in fact made 20% more purchases last year than their younger counterparts.
Liz Claydon, UK Head of Consumer Markets at KPMG, commented:
“Naturally stage of life and income levels are primary factors in driving both online and offline shopping habits. Generation X consumers, many of whom are more established in their careers and may be building homes and families, are likely buying more consumer goods than the younger Millennials. What’s more, due to structural quirks in the economy, a substantial proportion of wealth is concentrated in the older generations which means Baby Boomers have more disposable income than their younger counterparts.
“Clearly the older generations should therefore not be underestimated in the context of ecommerce made even more apparent in our analysis which showed that Baby Boomers matched the digital-first Millennial generation in making on average 15 online transactions a year but spent on average $30 more per transaction.
“However, Millennials are significantly disrupting traditional shopping habits. They are very unlikely to be influenced by online advertising but the most likely to consult a blog or peer review before making a purchase. This means retailers need to find new and innovative ways to entice the younger generations to continue buying online.
“It also means that the perils of getting it wrong, be it a faulty product, bad customer service, or disjointed process can have a serious impact on Millennials’ decision making, particularly if any negative feedback makes it onto a review board.”
Millennials are not only more likely than the older generations to be influenced by online sources such as social media or peer reviews—they are also more likely to be influenced by offline channels when considering a purchase. According to KPMG’s report, Millennials were nearly 50% more likely than Baby Boomers to research a product by visiting a store or discussing the idea with friends or family.
Liz added: “Convenience is the main motivation for online shopping but it’s clear ecommerce is not an online-only affair anymore. Both online and offline channels are effective in creating consumer awareness and demand, especially when used together. This means we should see companies becoming channel agnostic, so that it does not matter where purchasing decisions starts, what matters is that all channels are seamlessly connected in order to offer the utmost in consumer convenience.”
How did UK customers compare to the rest of the World?
KPMG analysis found that UK consumers were more likely to compare prices before making their purchase. Globally 27.3% of respondents noted price as the major factor and 64.9% of respondents researched more information on price. However, in the UK this increased to 32.1% and 72% respectively.
Perhaps as a result, UK consumers took notably longer than their global counterparts in making a purchase decision. Globally, only 1.7% of respondents took more than 3 months to make a purchase, whilst in the UK this rose to 2.6%.
Adrian Clamp, UK Head of Customer Advisory, commented:
“The British customer is more informed than ever but they have also binged on a diet of discounts for some time now. For retailers this has come at the expense of increasingly squeezed margins in an effort to compete for market share.
“However, according to our research 65% of respondents cited excellent customer support as the top attribute for obtaining and retaining customer loyalty. Companies should find ways to provide exceptional customer support online which could in turn lead to loyalty in an environment where it can be challenging to stand out. With less and less wiggle room to compete on price, providing superior customer service, assistance and advice online could therefore become the differentiators for customers, regardless of age.”