Millennials, Xers and Boomers: How to capitalize on where and when they shop online

1. Online Holiday Shopping Generations are more similar than we think
2. digital technologies challenge the relevancy of demographic marketing 2 sophisticated ad targeting technology easily identifies intended audiences powerful personalized recommendation engines drive additional sales
3. and yet we still think generationally… 3
4. …as we should. 4 Millennials Age 18-34 Born 1981-1997 Generation X Age 35-50 Born 1965-1980 Silent Generation Age 70+ Born 1945 or earlier Baby Boomers Age 51-69 Born 1946-1964
5. millennials are posed to reshape the economy… the boomers are no longer the biggest generation in the US millennials will be the dominant force shaping the marketplace for decades to come 5
6. $- $20,000 $40,000 $60,000 $80,000 Under 25 25-34 35-44 45-54 55-64 65+ Avg Annual Income Avg Annual Spend …but GenX and Baby Boomers still drive spending today spending power will come with age for the millennials In the meantime, genX and boomers have the spending power 6 Source: US Bureau of Labor Statistics, Feb 2015 Combined Average Annual Income and Spend of GenX and Baby Boomers
7. 7 data is everywhere yet actionable market-level, ecommerce data is elusive
8. the right ecommerce data is in ereceipts 8 receipt discovery field extraction data science order date merchant merchant category item description item price units shipping & handling price sales tax method of payment shipper origin warehouse/DC shipment transit points order date ship-from warehouse date delivery date age gender household income ethnicity occupation zip code PII available for blind matches
9. let’s be honest 9 (this is how we typically view online shopping by generation) VS
10. baby boomers dominate holiday spend 10 35% 29% 8% 28% Baby Boomer Generation X silent Millenial share of holiday sales by generation Source: Slice Intelligence. 11/1/14 – 12/31/14. n=1,126,541
11. genX spent most per person in 2014 holiday season 11 $414 $516 $497 $488 $- $200 $400 $600 Millennial GenX Baby Boomer Silent 9.9 11.1 10.3 10.8 - 4 8 12 $41.78 $46.55 $48.27 $45.01 $0 $25 $50 2.7 2.8 2.7 2.6 1 2 3 average merchants shopped average order sizepurchase frequencyspend per person Source: Slice Intelligence. 11/1/14 – 12/31/14. n=1,126,541
12. the online holiday shopping season breaks into four segments 12 $- $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 time aligned daily holiday season sales 2013 and 2014 2013 2014 salesbyday(inmillions) Black Friday Manic Monday Cyber Monday November 1 December 23 Source: Slice Intelligence. 11/1/13 – 12/23/13, 11/1/14 – 12/23/14. n=1,270,367 Pre-Season Peak Season Late Pea k Last Minute
13. we all shop at similar times during the season 13 32% 23% 26% 19% 31% 22% 27% 20% 32% 21% 28% 20% 33% 22% 27% 19% 0% 5% 10% 15% 20% 25% 30% 35% Pre Season Peak Late Peak Last Minute Millennial Gen X Baby Boomer Silent percentofholidaysales 11/1/14 – 11/26/14 11/27/14 – 12/1/14 12/2/14 – 12/14/14 12/15/14 – 12/31/14 Source: Slice Intelligence. 11/1/14 – 12/31/14. n=1,126,541
14. no one likes shipping fees 14 87% 86% 87% 86% Silent Baby Boomer GenX Millennial % of holiday orders w/ free shipping Source: Slice Intelligence. 11/1/14 – 12/31/14. n=1,126,541
15. pure play retailers dominate online sales, with big box retailers leading in brick and mortar 15 15% 10% 10% 65% composition of holiday sales by store type Big Box Dept Store Mall Store Pure Play top 10 Big Box retailers online 1. Best Buy 2. Walmart 3. Target 4. Home Depot 5. Costco 6. Old Navy 7. Toys R Us 8. Lowe’s 9. Staples 10. Sam’s Club Source: Slice Intelligence. 11/1/14 – 12/31/14. n=1,126,541
16. baby boomers and genX account for 68% of big box retailers’ online holiday sales 16 Baby Boomer 36% GenX 32% Silent 7% Millennial 25% big box online holiday sales by generation Source: Slice Intelligence. 11/1/14 – 12/31/14. n=1,126,541
17. what are the similarities and differences between category and merchant preferences by generation? 17 which categories generate the most dollars during the holiday season? which categories see the greatest increases during the holiday season? which merchants generate the most dollars during the holiday season? which merchants are uniquely appealing to each generation during the holiday season?
18. online holiday category and merchant preferences are more similar than different across generations 18 top categories based on holiday sales “pop” categories during holidays #1 electronics #2 apparel #3 home & kitchen #1 photos and paper products #2 toys and games #3 gift cards
19. 19 millennial unique habits millenials are where new models first pop key takeaways • mobile-first merchants • Emerging • subscription key themes unique categories shopped unique merchants shopped health & beauty home improvement baby products tickets and events
20. 20 genX unique habits genXers are stretched for time over the holidays key takeaways • Kids • Full-service groceries key themes unique categories shopped unique merchants shopped electronics sports and outdoors photo and paper products
21. 21 baby boomer unique habits boomers haven’t really changed their shopping habits with the advent of online – they’ve just moved channels key takeaways • catalog/Mall merchants • pets • traditional gift categories • tv shopping merchants • app-based gaming key themes unique categories shopped unique merchants shopped apparel flowers and gifts
22. 22 while not all buy online, those that do spend as much as any other generation – and men account for the majority of spending key takeaways • neutraceuticals • traditional gift categories • off price/off brand key themes unique categories shopped unique merchants shopped movies and tv appliances gift cards flowers and gifts silent generation unique habits
23. 23 we have found evidence that personalization algos. might act differently if overlaid with generation data Boomer apparel brand affinities among Nike buyers Millennial apparel brand affinities among Nike buyers
24. key takeaways
25. key takeaway #1 finding 25 there are more similarities than differences between generations’ online shopping habits. implication merchants and brands must not solely look at online as the channel where they cultivate younger shoppers. older shoppers are just as likely to be driving sales today.
26. key takeaway #2 finding 26 emerging ‘mobile first’ and subscription businesses are driven by millennials. implication brands seeking to cultivate younger shoppers should build and support mobile first and subscription businesses. those in that space today should seek to diversify to older audiences, particularly time starved genXers
27. key takeaway #3 finding 27 millennials generate the lowest average order sizes of all generations. implication merchants that aspire to attract younger shoppers would benefit from lower minimum free shipping and handling thresholds.
28. key takeaway #4 finding 28 boomers and silents dominate sales of traditional holiday gift shopping categories such as gift cards and flowers. implication merchants in traditional gift shopping categories would uniquely benefit from age-based ad targeting.
29. key takeaway #5 finding 29 genX online holiday shopping behaviors reflect their scarcity of time. implication for those that uniquely sell to GenXers, focus on time saving features and functionality: • click and collect • gift suggestions • gift wrapping holiday is a good time to acquire full service grocery customers
30. • questions on this presentation? ken@slice.com • want the slides? steve@slice.com • want to learn about our offerings? sales@slice.com • check out our blog - http://intelligence.slice.com/blog/ 30 thank you
31. 31 Questions?
32. APPENDIX
33. Which generation accounts for the largest share of purchases during the holiday season? a) Millenial Generation (18-34) b) Generation X (35-50) c) Baby Boomers (51-69) d) Silent Generation (70+) 33 Audience Question #1
34. Which generation spends the least, per buyer, during the holiday season? a) Millenial Generation (18-34) b) Generation X (35-50) c) Baby Boomers (51-69) d) Silent Generation (70+) 34 Audience Question #2
35. 35 Category Rank (Holiday $) Millennial Generation X Booomers Silents Total Electronics & Accessories 1 101 109 102 104 103 Apparel & Acessories 2 107 105 115 106 109 Home & Kitchen 3 102 100 106 106 105 Health & Beauty 4 92 84 83 80 88 Software & Mobile Apps 5 64 62 62 63 63 Home Improvement 6 102 83 90 98 94 Shoes 7 100 99 103 101 102 Grocery & Gourmet Food 8 77 71 75 74 74 Books 9 72 77 75 78 74 Toys & Games 10 252 286 243 270 252 Jewelry & Watches 11 127 120 126 116 119 Sports & Outdoors 12 104 118 106 111 110 Automotive 13 95 90 96 82 94 Movies & TV 14 94 87 88 97 89 Baby Products 15 69 54 63 61 61 Office Products 16 140 144 110 127 120 Music 17 74 72 74 64 68 Appliances 18 83 83 79 110 87 Pet Supplies 19 76 68 70 67 73 Gift Cards 20 166 79 226 238 152 Photos & Paper Products 21 420 502 453 460 472 Online Services 22 54 44 64 48 55 Flowers & Gifts 23 28 37 53 68 41 Tickets & Events 24 66 33 24 36 39 Holiday Index v. Rest of Year*Holiday Opportunity Matrix * (Category Share of Dollars Nov 1 2014 – Dec 31 2014 / Category Share of Dollars Jan 1 2014 – Oct 31 2014) * 100

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Good afternoon, good morning
Thank you for joiining us, excited to be working with Digiday on this
As shoppers, retailres and brands the holiday season is one that resonates strongly with us all – and we’re now just two short weeks away from Thanksgivingand
Less seasonally, there has been a lot of focus on the Milllennial generation over the past 6 months as they have officially been the biggest generation in the US
So we thought we’d bring them together and take a look at the holiday season, and how the generations are similar, and different from each other
I find myself impressed, virtual every day, that we’re living in the future… I saw a kid on a $200 Segway like scooter called the ‘hoverboard’ yesterday. We got a cardboard virtual reality headset that actually worked with our Sunday paper this week
More topically, when I look at a pair of shoes on Zappos today I’ll likely see those exact shoes in an ad elsewhere tomorrow
And this extends to onlien merchandasing as well – recommendations are targeted to me personally – not me as a male, but me based upon what I’ve watched and bought in the past that tend to be pretty good
Despite this, though, we continue to be fascinated with the idea of the importance of age-based segments – particuarly of the idea that generations are an important way of \understanding people, both sociologically and commercially.
From the Boomers – because there were so many of them. To Gen X – because something had to come after the Boomers, to Millennials – because they’re next, but also because there are so many of them
It would be easy to dismiss this as unnecessary and old fashioned, given the tools at our disposal (and there are some that will), but given that we’re all in the business of fulfilling consumer needs and wants, we’d be crazy to dismiss the notion that where we come from is irrelevant to a marketer or a merchant.
Clarify age buckets
The Silent Generation came of age during the post war economic expansion, and the advent of television
The Boomers grew up during the Space Age and the 60s
Gen X first embraced the digital revolution – from the PC to the cellphone to the ipod
Millennials are the first digital native generation

This can’t be irrelevant
According to the US census bureau, Millennials officially became the biggest generation this year, just edging out the Boomers.
This data, from Pew, based upon census figures, anticipates that Millennials will be dominant generation for, well, a generation anyway
From our perspective as marketers and merchants, however, it is critical to remember that Millennials’ buying power isn’t there yet. It’s not that Millennials are all living at their parents homes – it’s the simple fact that their incomes haven’t yet reached the point that they have the ability to spend that their parents and grandparents have.
This is Bureau of Labor Statistics data that looks at average annual income (blue) plotted against spend (yellow) by age group. Millennials are doing their best, spending almost all that they make – they just haven’t reached their peak spending years yet
Before we get into the data, I want to give you a bit of background on Slice, and where our data comes from….

We’re living in a world of Big Data (quite literally, in this photo – a reference that might be lost on those non GenX and Boomers that didn’t grow up with the ‘new’ Star Trek)
Retailers, and brands to a lesser extent, have so much data available to them that many characterize themselves as drowning in it
However, Slice Intelligence is founded on the idea that there is an incredibly important set of data that hadn’t been available – market level, consumer centric data that allowed retailers and manufacturers to understand the world outside of their own walls
The measurement approaches that worked in the offline world weren’t working in the online world
That’s where we come in
Slice has developed a 3 million person – US – panel that leverages the electronic receipts that come into consumer’s email inboxes as a result of virtually all online purchases
Size matters – given the wide array of merchants available and the more distributed nature of product purchases online – the ddays where a highly representative 100,000 person panel could help you understand purchasing are past
Slice has pioneered this space, having developed an extradorinarily sophisticated set of machine learning tools that cull through email inboxes and turn unstructured data into the world’s largest consumer purchase panel
Think of it as a happy confluence of Silicon Valley geeks and Market Research geeks – a modern market research company applying modern techqniques to established principles

Now let’s see what we can do with this…
Let’s be honest with each other – we can’t help but apply stereotypes to how we think about shopping behaviors amongst different age groups.
Review survey results -
Let’s see how we did in our quiz –
What are we looking at? Share of holiday spend 11/1/014 through 12/31/2014, by generation
These results were surprising to me – Baby boomers – those between 50-69 account for the largest share of online holiday spending, followed by Gen X
Millennials are doing OK, at 28% of spend, but clearly haven’t yet gotten into their prime earning and spending years
Not a big surprise – the Silent generation spends the least
What’s interesting here is how simiilarly this compares with offline sales – if you aren’t yet convinced of the mainstreaming of ecommerce, this might sway you
One other point – we did look at how this compares against the rest of the year and the results are nearly identical.
now let’s dive deeply into the spending dynamic by generation – again looking at Nov 1 – Dec 31 2014
Compare spend/person survey results
Spend/perspon
Story shifts a bit on a per person basis – GenX spends the most/person
Boomers spending power is driven by their size more than spend/person
Millennial spend/person is the lowest of the bunch, may be surprising, clearly driven by spending power
Biggest surprise to me was the spending by Silent Gen – not as many buyers, but those that do are surprisingly heavy spenders
Purchase frequency
Gen X buys the most frequently, Millenials the least frquently, but the numbers aren’t dramatically different.
Avg Order Zize
The one number that stands out here is the relatively low avg order size amongst Millennials
Avg. Merchants shopped during the holiday season
Surprsing to me how similar these numbers were – I think that we have a bias that Millennials are not paticularly loyal, but this data, from a merchant standpoint anyway, this doesn’t hold up.
Take a step back from our generational analysis to look at the timing of holiday sales overall
Overlays 2013 and 2014 data, by day
4 periods evident in both years –
Efforts underway to gain early sales this year, but we saw the same thing last year and the same pattern followed –
Question is how this varies by generation? Do certain generations have an inclination to buy at different times during the holiday season?
Explain data – broke the holiday season into the 4 parts that we just looked at, and looked at the proportion of holiday 2014 sales varied by part of season, by generation
The answer, for the most part, is that the timing of purchases is similar across generations
Implication – no need to build a generational plan into the timing of holiday promotions
Another similarity – free shipping –
Everyone does what they can to avvoid
Describe data: looked at percent of orders, by generation, that went out during the 2014 holiday season with free S&H
Answer – there is no difference – they’re all 86/87
Now we’re looking at how sales break out, overall, by retailer format type – hholiday 2014 again
Departmetn stores – nordtrom, macy’s, jcpenney
Mall store – abercrombie,, gap, etc…
Pure play – online only players, like amazon
Pure play is dominant, at 65% . Big box retailers come in next, at 15%
If we pulled amazon from the equation, big box retailers would represent 22% of sales
Drilling into the big box players, we see familiar names but a slightly different sort than we’d see in brick and mortar – walmart is in second place, not leading
- Now let’s dive into big box retailers, by generation
- Baby boomers and gen X are clearly the most important generations for these retailers, accounting for 68% of holiday sales – These retailers would be mistaken if they geared holiday marketing too heavily toward Millennials this year, anyway
- Now we want to dig into differences in preferences in categories and merchant by generation
Let’s start with the similarities – and they are significant
Now let’s look at what’s unique by generation

First, categories
Health and beauty and Home Improvement are widely shopped during the holiday season by all generations, but especially amongst Millennials
Baby products and tickets & events are less heavily shopped by other generations, uniquely so amongst Millennials
From a merchant standpoint – this confirms what we’d expect to see about Millennials. The merchants that they uniquely shop are likely to be Mobile First merchants (Lyft, Seamless, Uber, grub hub, fandango), subscription (shavemob, dollar shave, trunk club, goodmouth, and birchbox) – and by most accounts ‘Emerging’
While a main message throughout this presentation has been to discount the importance of Millennials spending today, this is NOT the case when we’re talking about emerging and innovative businesses. They are born with, and initially dependent on Millennials
As with all generations, Gen X is heavy on Eletronics, and uniquely heavy on photo and paper products, but this is particularly strong amongst Gen X
Sports and Outdoors is a category that uniquely pops amongst Gen X
When we look at the retailers that are uniquely strong during the holidays with millennials, there are a few themes that we see:
they’re clearly shopping for their kids (gymboree, children’s place, justice)
Full service grocey is intersting
Suggests time starved
Perhaps the next big growth oppty for folks like Uber and Lyft to help with the driving
Everyone buys apparel pretty heavily, but this particularly pops amongst the Boomers
Boomers are more likely than any other to buy from the flowers and gifts category during the holidays
From a merchant standpoint, it seems like boomers (in addition to buying from Amazon, like everyone else) have largely ported offline preferences to online
Home shopping (QVC and HSN)
Catalog (Talbots, Jjill, Easy Spirit, Garnet Hill)
Also intersting is the time killing games – Big Fish and others - overindex
With Silent generation – most unique factor is that that men account for the majority of spending – different than all other generations
Buy gift cards, but particularly heavily
Movies & TV, appliances
Flowers and Gifts more than otthers
Merchant preferences are diverse, but you see key themes
Neutraceuricals
Off price/off brand – Meritline, woot, my habit for example
Just want to drop one last quick datapoint here, coming back to a point that we addressed very early in the presentation –
Persoalization algorythms, across the merchants that I’m aware of, are based upon affinities of people (generally) to buy particular products – so they wouldn’t first identify a person as of a particular type, and then compute from there
We played around a bit, looking at brand affinities within the apparel sector, around the Nike brand, and found that the constellation of brands that people buy vary based upon their generation
Here (not going to go into a ton of methodological detail) we find that while both Boomers and Millennials buy Nike, the brand affinities of Nike buyers in those two generations are quite different.
Implies that a recommendation engine that was fed generation as a differentiating variable would be likely to make different recommendations
OK, we’ve gone through the data- but what’s it mean? What do we do?

Millennials, Xers and Boomers: How to capitalize on where and when they shop online

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