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Millennials and baby boomers receive a lot of attention for their behavioural habits. From their toast toppings, to their shopping, there are a lot of differences between generations. Most interesting – and critical – for retailers to understand is how each generation prefers to browse and buy – particularly big ticket items.

Generation Z (ages 3-23) might take the crown for purchasing power, but according to Experian’s Spending Power Index, millennials (ages 25-44) make up the majority of the workforce and are obtaining increasing levels of income from their own means, so shouldn’t be disregarded by large retailers. Likewise, when talking big ticket items, Deloitte reported the top segments of the luxury and premium consumer markets are still dominated by baby boomers (ages 55-73) and Generation X (ages 45-54).

With both millennials and baby boomers holding significant purchase power, what are the key differences between their buying habits and their use of retail finance?

Browsing behaviour

Retailers should ensure they meet the needs of all generations across all channels. According to Divido’s research, The Spending Index: Big Ticket Edition, when looking into high-value items, baby boomers and millennials still value an in-store experience with 40% and 16% respectively doing their research with a mixture of online and in-store. However, once both generations have made their purchase decision, a third of baby boomers and 24% of millennials like to go in-store to try out or see the product before making the purchase online, paving the way for concept stores.

Check out our top five brands that are taking physical retail to the next level.

Interestingly, despite the rise of mobile shopping, 35% of baby boomers and 40% of millennials still prefer to shop using their laptop.

Power of payments

A frictionless payment process is one of the key elements of a seamless transaction, and something millennials in particular have come to expect and value. 71% of UK millennial shoppers feel they are more likely to make a repeat purchase if the payments process is easy, with 73% sharing that the ease of making a payment improves their perception of a retailer. Baby boomers fall slightlybehind with just over half claiming they would make a repeat purchase based on an easy payment process, and 47% feeling it improves their perception of a retailer. This is great news for retailers when it comes to creating loyal customers.

Retail finance has seen a surge in popularity amongst both retailers and consumers, with household names offering 0% interest instant loans and more flexibility for consumers. According to our global proprietary data, in 2018, millennials requested 51.4% more credit than Generation X (ages 45-54), and Generation X requested 171.6% more credit than baby boomers. UK shoppers and their appetite for finance at the point-of-purchase is clear – a third of shoppers overall view paying by finance as a convenient way to spread the cost of payments, with over half of millennials stating they would shop with a retailer again if they could pay by monthly instalments.

While there may be some distinct differences between millennials and baby boomers, it’s clear to see the generations are mostly aligned where browsing and buying is concerned. Across all generations, there is a common theme of demanding convenient ways to buy and pay across different channels.

To see more data-backed insights into the customers using retail finance, including the top eight ‘Pay Later’ personas, download our free report, The Spending Index: Big Ticket Edition.

The Generation Game: How millennials and baby boomers are using retail finance

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