Malls Bank on Experiences for a Successful Holiday Season

The holiday shopping season is in full swing! Where are consumers expecting to spend most of their shopping time? Not at a mall, according to the Synchrony Financial “2017 Pre-Holiday Study.”

The holiday shopping season is in full swing! Where are consumers expecting to spend most of their shopping time? Not at a mall, according to the Synchrony Financial “2017 Pre-Holiday Study.” The study shows that about 50 percent of consumers expect to do their holiday spending in a store, but out of that, only 38 percent of in-store shoppers plan to do that shopping in a mall.

Synchrony Holiday Shopper Insights In-Store PurchasesWhere will shoppers go instead of the mall? The majority of consumers (66 percent) say they will spend some time going to mass merchandiser retailers (e.g., Walmart, Target, etc.) and half of store shoppers say they will visit a stand-alone specialty apparel store.

The benefits of going into these stores are the one-stop shopping element. Mass merchandisers have a wide variety of items available at a relatively low price. So, you can buy a sweater for grandma and a toy for little Johnny without a lot of walking around. Stand-alone specialty apparel stores have the benefit of available parking and more personalized service.

Synchrony Holiday Shopper Insights Via GenerationsIf you do venture into the mall, the people you are most likely to see are Gen Z and Millennials. Those aged 18- to 25-years old are the ones who intend to spend the most time at the mall this year, with over 40 percent of them saying they will shop at a mall. The Gen X and Baby Boomer populations (aged 36 to 65) are the ones who say they will stay away. Only 33 percent of this population say they will be mall shopping.

Retailers have been putting an increased focus on strategies to get consumers to walk through their doors. Many retailers now give shoppers the ability to order online and pick-up in-store. This not only saves time for the consumer, but also gives the store the opportunity to up-sell or cross sell other items. Other retailers have been putting interactive experiences and restaurants in their stores to increase the “fun” factor. The last time I walked into a Williams Sonoma store, they were cooking an entire turkey dinner!

The future of the mall depends on maximizing these experiences. There are malls that have added restaurants, art installations and even amusement parks as part of the effort to draw more foot traffic. Many retail experts feel that the survival of the mall lies on its ability to attract shoppers with innovative services and entertainment, in addition to stores and products.

* Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents from the Synchrony Financial 2017 Pre-Holiday Study unless otherwise noted.

Top Holiday Season Digital Trends

The holiday season is nearly in full swing. How will it be different than past seasons? The most striking difference is not in what consumers are buying, it’s how they are shopping. Consumers have been gravitating toward digital over the past decade, but this year, shoppers have indicated that they will pass a new threshold.

The holiday season is nearly in full swing. How will it be different than past seasons? The most striking difference is not in what consumers are buying, it’s how they are shopping.

Consumers have been gravitating toward digital over the past decade, but this year, shoppers have indicated that they will pass a new threshold. For the first time, they anticipate making the majority (51 percent) of their holiday purchases online, according to a study by Synchrony Financial*. This has been steadily increasing over the past three years, up from 47 percent in 2015 and 49 percent last year.

Synchrony Holiday Season Shopping StatsWhich devices will they be using to make these purchases? Consumers indicate that one in five holiday purchases will be made on their mobile device. So, not only is shopping trending toward online purchases, many shoppers are planning to do it on-the-go.

Shoppers like mobile because, quite frankly, it’s easy and always around. The mobile device is with the shopper continuously. Whether riding on a bus, waiting in line for coffee or binge watching your favorite Netflix show. If you think of the perfect gift for Aunt Helen, you can order it immediately. And, not to worry about keeping track of your purchases — half of mobile shoppers say they use mobile because they can easily view the confirmation in their email.

And, discount hunting via mobile is ubiquitous. More than one-third (36 percent) of shoppers say they will shop via mobile during the holiday season because they can more easily link their email offers and coupons to their purchases. So, bargain hunters don’t have to worry about missing out on a good deal. The ability to scan available coupons and download offers gives shoppers confidence that they are getting the best price.

With the ease of shopping online and the widespread availability of next-day shipping, consumers may be less rushed to get their shopping done early this holiday season. Only 44 percent of consumers say they will be shopping earlier this year. Last year, 53 percent said they would be shopping earlier than in the past.

And, shoppers are less likely to be “hunting for a deal” on specific days like Thanksgiving, Black Friday or Cyber Monday. This is perhaps due to the prevalence of deal hunting throughout the season. Consumers have been less hooked on shopping on specific days, if they are certain they can find the best price on any given day.

How are retailers responding to these trends? One way is having websites that are optimized no matter which device consumers use — laptop, tablet or mobile. Retailers are spending time and resources building websites that are easy to navigate and intuitive. The experience is important — the top reason shoppers delete a retailer app is due to poor functionality, according to the Synchrony Financial 2017 Digital Study.

Also, shipping will be a big element of the online shopping experience this year. Many retailers have graduated from two- to three-day shipping to one-day, or next-day shipping. And, since shoppers say they will be shopping later in the season, this will be a big deal this year.

Finally, and perhaps most important, bargain hunting remains a key ingredient in the shopping habits of consumers, whether they are early bargain hunters or last minute deal seekers. The ability to check product reviews, compare prices and use coupons is a key part of the holiday shopping experience. If the consumer can do it all on one website, great! If not, off they go to the next retailer.

* Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents from the Synchrony Financial 2017 Pre-Holiday Study unless otherwise noted.

Should You Create a Mobile App?

As a marketer, you’ve created a Web page, established a social media presence and even experimented with mobile marketing. Is it time for the next step? Should you create a mobile app so your customers can engage with you more easily?

Mobile appsAs a marketer, you’ve created a Web page, established a social media presence and even experimented with mobile marketing. Is it time for the next step? Should you create a mobile app so your customers can engage with you more easily? According to the “Synchrony Financial 2017 Digital Study,” 63 percent of the U.S. population over the age of 15 have downloaded a retail app. The average adult has two retail apps on their phone at any given time.

Why People Download Mobile Apps

What are the driving forces causing customers to download retail apps? According to our study, the top reason why people download a mobile app was because they frequently shop at the brand — 51 percent said they downloaded an app for this reason. As a marketer, your most loyal customers are the best targets for an app.

The second reason was to make a purchase, at 48 percent, followed by the desire to browse and compare prices, at 37 percent. So, if you are planning on launching a mobile app, ensure that it’s easy to buy and browse products on it. These are driving factors for your customers.

Who are most likely to download mobile apps? You guessed it, it’s the Millennials. Millennials are downloading apps in huge numbers. Eighty-one percent of those aged 26 to 35 said they have downloaded a retailer app on their phone. The top reasons are the same, to browse, buy and compare prices.

Retailer App EngagementMost Important Mobile App Features

OK, so you’ve launched your mobile app. Now, you want to get people to use it, right? Well, do you know which features are most important to your customers? Below are the top-rated app features:

  • 69 percent — access to discounts and coupons
  • 30 percent — ability to order products quickly
  • 27 percent — product search feature
  • 23 percent — ability to make payments and check balances

So, the number one feature customers want from an app is the ability to save money and access to special offers. Other features that rate highly are speed, product search and payment-related features. If you want your customer to regularly use your mobile app, keep these features in mind. A few surprise and delight perks are always great ways to get customers interested and engaged.

Why Good Mobile Apps Go Bad (or Get Deleted)

The top reason mobile apps get deleted was due to poor functionality. Thirty-five percent of people deleted apps for this reason. If your app has poor functionality, doesn’t meet your customers’ needs or customers have a bad experience, your app will most likely get deleted. There is only so much space on a smartphone and today’s digital consumer doesn’t have much patience for a dysfunctional mobile app.

Coming in as a close second reason for deletion was simply that the app didn’t provide enough value. Thirty-four percent of consumers said they deleted a mobile app because they didn’t see the value in keeping it. This is a warning sign! Even if you spend the time and effort developing an app that runs great, if you don’t provide enough perks or benefits, it just won’t matter — it will get deleted.

In our hypercompetitive world of digital engagement, it’s important to prioritize our digital programs. One of the strategies to explore is engaging with your customers through your own mobile app. If that’s the case for you, be aware of the delighters and pain points for mobile app usage. It can be a great way to engage, but it can also be a lot of work for a minimal amount of gain, if not done correctly.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents from the Synchrony Financial 2017 Digital Study unless otherwise noted.

Are You Meeting Your Customers’ Mobile Needs?

Most of the U.S. population — 61 percent — say they use mobile phones for shopping activities, according to the 2017 Synchrony Financial Digital Study recently completed. But, what would resonate with them in terms of digital marketing and more importantly, what would drive their behavior?

Game Changing TechAs modern marketers, we put a lot of thought and effort into our digital marketing programs. The goals are to promote engagement with our brands, drive traffic to our website or encourage customers to walk into a store. Many times, the goal is all three.

Most of the U.S. population — 61 percent — say they use mobile phones for shopping activities, according to the 2017 Synchrony Financial Digital Study recently completed. But, what would resonate with them in terms of digital marketing and more importantly, what would drive their behavior? Based on the referenced survey, there are specific elements of mobile marketing that consumers tell they are interested in.

Significantly, 50 percent of consumers said if their favorite retailer sent offers to their mobile devices, they would shop there more often. Mobile marketing can include in-app messages, push notifications, beacon / location based offers, SMS messages and voice recognition.

Given this consumer interest, how many companies are investing in mobile technology? The answer is, it depends. According to “The State Of Digital: A Mobile Commerce Perspective: Forrester’s H2 2016 Global Mobile Executive Online Survey” by Forrester, nearly 70 percent of marketers say they are regularly using responsive Web design and mobile optimized websites. It seems that most companies have the basics of mobile user experience down pat. But fewer companies are actively marketing via mobile. Only about 40 percent regularly use SMS messaging or push notifications, and only one in three use in-app messages.

Another element of mobile marketing that consumers express interest in is location-based marketing. Almost half (46 percent) of all consumers said they would like to get relevant offers based on their location. This is overwhelmingly driven by millennials. For instance, 61 percent of those ages 18 to 25 would like location-based offers, steadily declining for each age group (only about a quarter of those 66 or over said this is the case).

But only 37 percent of marketers are using push notifications and an even smaller percentage (only 12 percent) are regularly using beacon/location support on mobile phones, according to the same Forrester study referenced above. There are certainly restrictions on SMS marketing (consult your legal advisor as to the permissions required), but some companies are still planning to implement these programs — about a quarter are planning to pilot/test SMS messaging, and 35 percent are planning to pilot/test push notifications in the future.

Mobile marketing is clearly an imperative for companies with large numbers of millennials in their current or target consumer base. And remember, Gen Z’s, the true mobile natives, are fast approaching behind the millennial population. They may be even more comfortable with mobile marketing than their millennial older siblings. Investments in mobile technology will certainly be crucial for many more marketers as these populations expect more from their favorite brands.

With the constantly evolving field of smartphone technology, people become more and more enamored of using their phone for anything and everything. Digital marketers are challenged to provide “delighters” to attract and engage the population that is most interested in using this technology. Successful digital marketing programs listen to the customer and proactively engage them, whenever and wherever they happen to be.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents from the Synchrony Financial 2017 Digital Study unless otherwise noted.

Back-to-School Shopping Season Is Here, Marketers

Welcome to the second biggest shopping season of the year: It’s Back-to-School season and it’s promising to be a good one. According to a survey conducted by Synchrony Financial of parents of K-12 students, parents of college students, and college students themselves, parents are pretty upbeat about the economy and their own financial situation this year.

Welcome to the second biggest shopping season of the year: It’s Back-to-School season and it’s promising to be a good one. According to a survey conducted by Synchrony Financial of parents of K-12 students, parents of college students, and college students themselves, parents are pretty upbeat about the economy and their own financial situation this year. More than half (53 percent) of parents of K-12 kids expect to spend more this year than last year.

This is good news, and is driving an expected increase of back-to-school spending between 3.7 percent and 4.1 percent (This growth forecast for the three-month Back-to-School shopping period of July-Sept. 2017 is based on analysis of macroeconomic variables and trends).

Credit: Synchrony Financial

What is driving this increase? One reason could be that parents of K-12 kids are feeling confident about their jobs and pretty good about their financial situation. Sixty three percent of parents say their financial situation has improved this year, and three quarters feel confident about their jobs. That’s a 10 point jump from last year, when only 53 percent of parents felt this level of confidence.

So, parents are feeling like they can spend more on deserving offspring who have done Vulcan mind-melds with the pool and video games over the long summer. What will they spend money on? Clothing is the number one item. Kids tend to grow, and clothes that fit them last year won’t work — and older siblings’ clothes only go so far. Ninety-four percent of parents of K-12 youngsters are expecting to spend money on everyday clothes, totaling about $183 on average.

But that’s not the big growth item. The biggest growth category is electronics. Forty-five percent of parents are expecting to spend more money than last year on computers and electronics. Also, 46 percent of them say the supply list from schools have gone up, leading to spending more on notebooks, markers and other supplies.

How about parents of college kids and college kids themselves? They are not as optimistic about the economy and their own financial situations because, well, they’re paying for college. That takes quite a bite out of the family nest egg. Only 40 percent of college students say they feel confident about their overall financial situation, and only 15 percent are confident in the strength of the economy. That does put a damper on spending on discretionary items.

But, at least they’re done growing, right? No need to spend a ton of money on clothes and shoes, but college kids and their parents are spending a good amount of money on other items. The data shows that parents of college age students spend about $205 on average on electronics, but less on clothing and shoes for back-to-school. Forty-five percent of college parents are expecting to spend more on computers than last year, similar to K-12 parents.

So, when is all this spending happening? If you think college students procrastinate in shopping, similar to how they do their college papers, you would be absolutely right. About 70 percent of parents of kids K-12 are done spending by the end of July. But half of college students don’t start until after August. Almost 30 percent of them wait until after Aug. 15. Hey, at least it gets done, right?

Will this level of confidence and spend extend to the holiday season as well? It’s too early to tell at this point, but this is a beacon of hope, in a sea of bleak news in the current retail marketing landscape.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents.

Machine Learning: More Common Than You Think

There’s a lot of buzz lately about machine learning. In many ways, it’s transforming the consumer experience and improving the products and operations of many companies. Plus, it’s not just for data analysts — machine learning has real benefits in the lives of the average consumer.

[Today, Sue is hosting Sanjay Sidhwani, SVP of Advanced Analytics for Synchrony Financial, as a guest blogger for The Consumer Connection.]

There’s a lot of buzz lately about machine learning. In many ways, it’s transforming the consumer experience and improving the products and operations of many companies. Plus, it’s not just for data analysts — machine learning has real benefits in the lives of the average consumer.

Ever wonder how Netflix serves up recommendations for the next movie or how your smartphone knows that you will be driving to work on Monday morning? Those are both examples of machine learning.

How is machine learning different from ordinary analytics? With traditional methods, an analyst defines the objective and looks for correlations between the objective and a defined set of data inputs. If new data comes in, the analyst needs to rerun the analysis and create new correlations and a new algorithm. This can take a while.

Machine learning is more efficient because it automatically takes new data inputs and adjusts, or “learns,” without manual intervention. So, the impact is immediate. How is it learning? The behavior drives the operation, not the programmers. Netflix recommendations are a good example. Once you watch a program or a movie, the next set of recommendations are created automatically without adjustments from an analyst.

Let’s take another example. Say you are considering buying a used car. What’s a fair price? Many factors determine this, such as age of car, miles driven, model and make. With enough data, we can infer the relationship between these factors and the price. This relationship can be linear, where the attributes have an additive effect (e.g., miles driven). But often the relationship is not linear. A car’s age, for instance, has a geometric effect on price (15 percent lower each year). In machine learning, the nature of these relationships doesn’t have to be a total guess. The programs automatically adjust these inputs and give us a fair price.

Machine learning can also help companies market offers more efficiently. One way is pattern recognition. There are patterns in customer buying behavior, for instance. Machine learning algorithms can predict the next likely item to be bought, helping a brand decide which customer should be targeted with what offer, better addressing their needs and wants and eliminating wasteful and costly marketing.

The challenge for companies is how to implement their learnings. What to do with the prediction — offer a discount? Display on the website? Send an email? The key to making the data impactful is “closing the loop” and refreshing the learnings so the data leads to actual behavior.

There is a budding community of data scientists and analysts who are exploring machine learning techniques. I recently attended a hackathon on Artificial Intelligence in our Innovation Station, a technology hub in our Chicago office. Most of the teams’ ideas used machine learning techniques combined with new types of data, such as facial recognition of an applicant’s LinkedIn picture to authenticate digital credit card applications or building a neural network chatbot that provides personalized service and account analytics.

The possibilities for marketers are exciting and endless. As we learn more about the technology, the real-world applications are likely to grow and provide even more value to brands and consumers alike.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial.

The Effectiveness of Pop-Up Shops and Partnerships

During a recent visit to New York City, I passed through Grand Central Station. There, I saw a hotbed of shopping activity: A section of Grand Central had been converted into a series of pop-up shops. What had happened to the retail bust?

Group of friends sitting outdoors with shopping bags - Several people holding smartphones and tablets - Concepts about lifestyle,shopping,technology and friendshipDuring a recent visit to New York City, I passed through Grand Central Station. There, I saw a hotbed of shopping activity: A section of Grand Central had been converted into a series of pop-up shops. What had happened to the retail bust?

The small pop-ups were doing a brisk business, selling everything from jewelry to men’s toiletries to candles. The shops were small, but had tons of personality. The experience was interactive and fun.

This was not an isolated incident. Pop-up shops are making their presence felt across the retail industry. The concept is not new — bazaars and flea markets have existed for many years. But lately, pop-up stores have become ubiquitous in everything from restaurants to rock festivals.

They are used by online retailers who are looking to experiment within the bricks-and-mortar space, and by chain stores who want to experiment with new locations and venues. Fashion retailer Nordstrom has launched pop-ups at music festivals that offer products and feature photo booths.

According to PopUp Republic, a service provider to the pop-up retail industry, pop-up shops have grown into a $50 billion industry and expected to grow further in 2017.

Why do retailers invest in pop-ups? Smaller retailers or Internet start-ups can launch a low-cost shop to test the waters without a significant time or money commitment. A new bricks-and-mortar retail storefront can cost tens of thousands of dollars to launch and often requires a lease of at least five years.

With a pop-up shop, the commitment can be a matter of months, with an investment of a few thousand dollars. And consumers seem to love it. They can touch and feel the merchandise and get to know the creator or store owner. The interaction often results in a loyal following. According to pop-up expert, The Lion’esque Group, one international foods and goods marketplace increased their e-commerce traffic by 300 percent through pop-ups.

Another growing retail concept is the store-within-a-store. Large retailers have been partnering with smaller businesses to set up areas within their stores for a differentiated experience for the shopper. Macy’s announced a partnership with beGlammed to provide at-home grooming and makeup services, and Neiman Marcus recently announced a partnership with Le Metier de Beaute to provide services such as manicures and blowouts at affordable prices.

Plus, JCPenney has had a partnership with Sephora for years, providing a cute area within the store where shoppers can purchase cosmetics and get quick makeovers. In its 1st Quarter Earnings call, JCPenney mentioned Sephora as one of the areas in the store with positive comp store sales and there are plans to add 16 new Sephora locations in June. These partnerships fulfill the goal of the retailer to pull in a different customer set, while also fulfilling the desire for a quick, differentiated experience for the customer.

For retailers who want to test the waters with a low-cost concept, partnering with another retailer or setting up a pop-up shop may be a viable solution. And for the customer, it provides a new, interactive shopping experience.

Next time you’re in Grand Central during the holiday season, check out the shopping arcade. It may be a nice place to pick up that unique gift or chat with a person who makes hand knit scarves by hand.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial.

Retail’s Future: The Store as Entertainment

When was the last time you went to a store and felt happy just by being there? Remember the movie, “Breakfast at Tiffany’s”? In it, Holly Golightly lovingly looks into the Tiffany store window on Fifth Avenue and says “… nothing very bad could happen to you there …” In today’s digital world, how can stores create the feeling of engagement and excitement that Holly felt?

Audrey Hepburn
Source: Pixabay

When was the last time you went to a store and felt happy just by being there? Remember the movie, “Breakfast at Tiffany’s”? In it, Holly Golightly lovingly looks into the Tiffany store window on Fifth Avenue and says “… nothing very bad could happen to you there …” How wonderful to feel that about a store experience! Whether feeling special or entertained or valued, stores that make you feel that “nothing bad can happen” have a special place in the hearts of their customers.

In today’s digital world, how can stores create the feeling of engagement and excitement that Holly felt when looking at the Tiffany’s store window? Our surveys show that customers are still interested in shopping at stores, but the store experience they value today is very different than what they valued in the past. And their expectations of the future will be very different as well.

In the “Synchrony Financial Future of Retail Study,” when asked about the most exciting ideas for the future, 55 percent of consumers surveyed picked “an in-store experience that entertains me” as one of the top three most exciting ideas. And according to the “Synchrony 2016 Affluent Study,” about 70 percent of shoppers say they would rather spend money on experiences over spending on things. The message is clear — shoppers want to be entertained when shopping.

Below are some new shopping formats that we may see in the coming years as brands respond to this sentiment:

  • Experiences merged with shopping. Various categories are now being added to the retail experience. Examples include coffee shops, cafés, music experiences, bars or complimentary products or services inside the store. It’s a big reason why local “markets” are making a resurgence across America. Some call it “retail-tainment.” The retail experience can be a place to gather or a place to just relax and have fun.
  • Crafts and learning within the store. Retailers can let shoppers see how a product (like a leather belt) is made from scratch. While this experience is already being used, it may become more mainstream in the future.
  • Retailer apps that are interactive and combine the digital and store experience. For instance, a customer can pick out clothes and reserve a dressing room right from the retailer’s app. This is both a timesaver and a delighter.

Ryan Mathews, a Futurist at Black Monk Consulting says,

“So, the question then is, if you don’t need to go to a place to get stuff, what do you need to go to a place for? And that’s kind of what we call higher engagement things: the experience, advice, consultation, fun. It’s moved beyond transactions into real relationships.”

So, looking to the future, the bricks-and-mortar store may no longer be a place to just pick up a sweater or a pair of shoes. It may be a place to meet your friend for a drink, learn to mix a cocktail and pick up that cute scarf that goes perfectly with the pants you’re wearing. For the Holly Golightly of the future, that could be the next “Breakfast at Tiffany’s” experience.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial.

Don’t Ignore Baby Boomers

Quick quiz: Which generation is huge in size, interested in experiences, loves to travel, owns digital devices and is active in social media? Millennials? No, it’s actually Baby Boomers. Surprised? The Baby Boomer generation tends to be overlooked, but they are an important consumer segment.

Baby BoomersQuick quiz: Which generation is huge in size, interested in experiences, loves to travel, owns digital devices and is active in social media?

Millennials?

No, it’s actually Baby Boomers. Surprised? The Baby Boomer generation tends to be overlooked, but they are an important consumer segment.

This population — born between 1946 and 1964 — are 74 million strong and have more disposable income than any other generation. They are more likely to be in the upper-income group. According to Pew Research, 27 percent of boomers are in the upper income group, which is the highest figure of all generations. Principal economist at Kantar Retail, Doug Hermanson, notes:

“Upper-income Boomers can sustain their pre-recession spending and be a strong driver of the consumer economy over the next five to 10 years. They have the money to spend. It’s a different mindset of saving before and now saying, ‘I’ve got to spend it while I’m here.’”

Let’s dig into these mass affluent Baby Boomers. These are defined as those who have $100,000-$250,000 in household income and over $250,000 in savings. They are an optimistic bunch, with 77 percent saying their goal is to have an interesting life.

Over 80 percent say they live a healthy lifestyle, and they are much more likely to give to charities. Pew Research reports that Boomers are living longer, with an average life expectancy of 80 years old, up from 68 in 1950. Many are now entering their retirement years. While about half of all adults say they feel younger than their actual age, 61 percent of Boomers are feeling more spry than their age would imply.

So what drives spending for this important segment? Quality is important to the mass affluent Boomer, with nine out of 10 saying they are more likely to value quality over brand name. They also like to shop within brands they feel an emotional connection with. And over 70 percent of Boomers across all income levels say the fact that they “like” a retailer is a driver of retail selection.

So, now that we have seen how they like to spend money, let’s take a look at what this generation plans to spend money on. About a quarter of Baby Boomers in the mass affluent category say they will spend more money in general in the coming year. Baby Boomers at the higher income level are more likely to prefer experiences over things: 73 percent of them say they prefer to spend money on experiences, vs. 69 percent of Millennials. Their spend categories emphasize travel, home improvement and charities.

Additionally, Synchrony Financial consumer surveys reveal the following:

  • The highest category of future spend will be travel. About 40 percent of mass affluent Boomers plan to spend more on travel next year. AARP estimates Baby Boomers spend more than $120 billion annually on leisure travel.
  • The second highest spend category is home improvement, with 32 percent of Boomers spending more on home improvement in the coming year, and 22 percent spending more on home furnishings.
  • Boomers are much more likely to say that they give to charitable causes, with 79 percent saying they plan in increase their charitable giving.

The Digital Divide: Boomers and Technology

Let’s take a look at the most talked-about difference between Baby Boomers and younger generations — digital technology. The reality is that the Baby Boomer population is on-par with younger generations when it comes to smartphone ownership, online shopping and social media access. Three out of four Baby Boomers own a smartphone, up 19 percent from a year ago. The generational divide exists in the usage of digital devices. Synchrony Financial’s research studies show that Boomers are much less likely than Millennials to use their smartphone for a multitude of tasks — from shopping to texting to social media postings.

But contrary to what some may think, Boomers have a great deal of access and interaction with social media. Ninety-two percent of Boomers say they have access to a social media channel — mainly Facebook (82 percent of Boomers have access to Facebook, up from 76 percent only a year ago). But they not influenced by social media for purchases. Only one third say they purchased a product after seeing it on social media, which is a significantly lower figure than that of younger generations: For Millennials, that number tops 70 percent.

How well does your business cater to this large and important segment of the population? Generalizations are difficult for any population of this size, but in general, Boomers are optimistic, secure and not done spending. Brands who provide a great shopping experience, high quality and seamless digital technology will go far in attracting this important segment.

Sources: All data is sourced from the following three studies, unless otherwise noted: Synchrony Financial 2016 Loyalty Study, Synchrony Financial 2016 Affluent Survey and Synchrony Financial 2016 Digital Study. All references to consumers and population refer to the survey respondents.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial.

The Consumer’s Journey in Making Big-Ticket Purchases

When we look at consumer behavior and what drives the purchase decision, it’s helpful to look specifically at smaller price points vs. big-ticket items. There are definite differences in the path-to-purchase for big-ticket items (i.e., items costing $500 or more).

[Today, Sue is hosting Ronda Slaven, a VP Research Insights and Thought Leadership at Synchrony Financial, as a guest blogger for The Consumer Connection.]

When we look at consumer behavior and what drives the purchase decision, it’s helpful to look specifically at smaller price points vs. big-ticket items. There are definitive differences in the path-to-purchase for big-ticket items (i.e., items costing $500 or more).

When I think about how I purchase shoes, for example, I go through a very different process than when I purchase a mattress. For shoes, I don’t spend a lot of time researching, and I must admit: Some shoe purchases have been impulse buys. But I can’t say the same for a mattress or flat screen TV.

Path to PurchaseIn the 2016 Synchrony Financial Major Purchase Study, we asked consumers specific questions about what they go through when they purchase items costing more than $500.

The results show that consumers spend a certain amount of time researching, both in-store and online. Additionally, some consult friends and check online reviews, and about one third of consumers explore financing for the purchase. But, guess where the purchase is ultimately made? Eighty-two percent of respondents said they ultimately purchase the big-ticket item in-store. Surprised? Let’s explore this further, and add some more numbers to the picture.

For 85 percent of consumers, the path-to-purchase for big-ticket items starts with online research. The vast majority of people used the internet to explore prices and purchase options, up from 80 percent only a year ago. Let’s dig a little deeper:

  • Ninety percent of consumers said they compare prices and promotions to ensure they get the best prices.
  • Eighty-two percent said they wait to make purchases until they get the best deal.

So, comparison shopping is a major part of the big-ticket purchase process.

Let’s go to the next step: in-store research. Even though in-store research takes more time and planning than online research, our study shows that about 70 percent of consumers research the items in physical stores. That’s a pretty healthy percentage.

And how much impact do friends and online reviews have on the purchase? Well, more than half said they consult with friends, and 38 percent check online reviews.

Now, after all this research on the actual purchase, how about financing it? About one third of consumers said they research financing options. It’s a good idea for brands to introduce financing as part of the purchase process, as 47 percent said they might not have made a purchase, or would have shopped with a competitor, if financing was not available. Additionally, 71 percent of cardholders said they prefer retailers that offer promotional options.

And to reiterate, about four in five people purchase the item in a store. For costlier purchases, people like to touch it, feel it, ask questions and feel confident that they know what they’re getting. After all, it’s more complicated to return a washing machine purchased online than it is a pair of shoes.

So, what is the implication for brands selling big-ticket items? Consumers value more than just price when shopping for a high-cost item. The value equation includes price comparison, consumer reviews and cost of shipping/delivery/installation, as well as financing options. Retailers who ensure that their website and communications strategy include these elements come out as winners. And as the digital channel continues to play a prominent role in the shopping journey, brands should consider strategies that increase their online presence, such as search engine marketing and website optimization.

Customers are looking for a seamless shopping experience. It’s important that brands demonstrate value early in the sales process, serve up detailed information through online channels and provide great customer service for that ultimate in-store purchase.

Note: The views expressed in this blog are those of the blogger and not necessarily of Synchrony Financial. All references to consumers and population refer to the survey respondents.