Generational Analysis: Insight into Consumer Behaviors

Segmenting consumers by generation is critical to understanding how different cohorts approach shopping. The period when a consumer comes of age not only shapes the way he or she views shopping and the importance of apparel and fashion, but connects a group of consumers who will share a similar lifestage timeline.

As consumers age, their lives change. Whether they are going off to college, starting a family, or retiring, life changes affect consumers’ apparel shopping habits. Some shifts in shopping behavior are consistently linked to aging of consumers — such as loss of interest in shopping or decreased spending on apparel. However, other behavioral shifts are driven by the current retail climate and tend to cross generations — such as increased preference to shop for electronics or increased apparel purchases in response to price deflation, resulting in overflowing closets.

This edition of the Textile Consumer 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. The timeline to the right shows the years commonly accepted as defining these generations. For our analysis of data from Cotton Incorporated’s Lifestyle Monitor™, we have used the corresponding age categories shown in the table below.

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Over the past decade, consumers’ love of shopping for apparel has declined across the board. In 1995, 53% of Generation X said they either liked or loved to shop for apparel, compared with only 42% in 2004. Shopping enjoyment has experienced similar double-digit declines among Baby Boomers and the Silent Generation: in 2004, only 31% and 28% 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.

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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% share of consumers’ total expenditures in 2004, down from 4.9% 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.

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Apparel’s share of the consumer wallet has been reduced not only by increased spending on necessities, but by shifts in discretionary shopping. When the 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% 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% 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 morespecialized channels, such as specialty, department, and chain stores. The largest shift has been among Gen-Xers; in 1995, 15% said they shopped for apparel mostly at mass merchants, but by 2004, the figure had increased 9 percentage points, to 24%. The decline has been largest for specialty stores, as the percentage of Gen-Xers preferring this channel for clothes shopping fell from 26% in 1995 to 16% 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% of Generation X (up from 42% in 1996), 57% of Baby Boomers (up from 54%), and 78% 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% of Gen-Xers (up 12 points from 1996), 51% of Boomers (up 17 points), and 69% 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% 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.

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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% shop only one channel for apparel (up 10 points from 1997), as do 27% of Baby Boomers (up 13 points) and 26% 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 crossshopping. 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 store 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.

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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% 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 premiumpriced denim. However, not all consumers are willing to pay premium prices for jeans. The cohorts differ clearly in the average prices they say they would pay for a pair of good-fitting denim jeans: $34.86 for Gen-Xers, $30.26 for Boomers, and $26.34 for the Silent Generation. The percentage of Gen- Xers willing to pay over $70.00 was up from 3% in 1998 to 6% in 2004, while the percentages for other generations remained the same. The average highest price Gen-Xers have ever paid for a pair of jeans is $49.99, compared with $40.84 for Boomers and $34.68 for the Silent Generation. 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.

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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.