CAMBRIDGE, MA: Retailers looking to boost sales have placed too much emphasis on the impact of innovations like social networks on younger consumers and should instead concentrate on older shoppers, new research has contended.
Older consumers have significantly greater purchasing power and, on average, spend considerably more than shoppers aged under 35. Indeed, households over 55 drove 35% of retail spend in 2013 compared with just 21% spent by the under-34s.
In The Future of Shopping report, Forrester Research analyst Sucharita Mulpuru explains there has been massive demographic change over the past four decades.
Agility Versus the Big Idea
Also, technological change is not uniquely for the young because the history of technology innovation – from the introduction of subscription TV in the 1970s to 3D printing in the 2010s – suggests that change has an impact on all generations.
Alongside demographic change over the last four decades, the advent of mobile, ecommerce and the emerging consumer healthcare sector are among six main trends that have transformed retail, Mulpuru says.
To survive, retailers will need to become "truly digital businesses, creating new sources of value through digital customer experiences and digital operational excellence".
Specifically, that means retailers will have to innovate to reduce retail costs and that may even have to include marketing, Mulpuru says.
Ultimately, those retailers that reinvent traditional store experiences, through delivering top digital customer experiences and operational excellence, will grow while others facing greater online price competition will remain stable or decline.
Finally, the research concludes that the long-term outlook will be positive for online retailers, luxury, direct sellers, healthcare, restaurants and away-from-home food, while other sectors struggle, especially furniture stores, toys and sporting goods.
Data sourced from Forrester Research; additional content by Warc staff