Generational differences in consumer behaviour
Robert Baskin
© 2015 The Quantium Group Pty Ltd. In Commercial Confidence
This presentation has been prepared for the Actuaries Institute 2015 Actuaries Summit. The Institute Council wishes it to be understood that opinions put forward herein are not
necessarily those of the Institute and the Council is not responsible for those opinions.
Define consumer behaviour
Repeat purchasing
Product take-up
Define consumer behaviour
Repeat purchasing
Product take-up
Who are the trend setters?
Who tries the most products?
Who is the most likely to return?
Who gives the largest share of wallet?
Who are the most price sensitive?
Traditionalists Pre 1946 Generation
Y
Generation X
Baby Boomers
Traditionalists
Denture care
Fertilizer
Knitting Brandy
What the internet says? What the data says?
Source: Quantium research
Baby Boomers 1946 - 1964 Generation
Y
Generation X
Baby Boomers
Traditionalists
Thank you Cards
Salmon Fruit Cake
Talcum Powder
What the internet says? What the data says?
Source: Quantium research
Generation X 1965 - 1979 Generation
Y
Generation X
Baby Boomers
Traditionalists
Kids Shampoo
Baby Formula
Kids Snacks
Lollipops
What the internet says? What the data says?
Source: Quantium research
Generation Y 1980 - 1994 Generation
Y
Generation X
Baby Boomers
Traditionalists
Beer
Condoms
Pregnancy Tests
Hot Chips
What the internet says? What the data says?
Source: Quantium research
Generational hypothesis
Most likely to try something new
Most likely to return
Most likely to try more brands
Least price sensitive
Gives highest share of wallet
Product take up Repeat purchasing
Generation X Traditionalists Generation Y Traditionalists Baby Boomers
Define consumer behaviour
Repeat purchasing
Product take-up
Who are the trend setters?
Who tries the most products?
Who is the most likely to return?
Who gives the largest share of wallet?
Who are the most price sensitive?
Product take-up
Why do consumers try new products?
Satisfies a need
Hear about it
Who are the trend setters?
Who tries the most products? 1. 2.
Product take-up
Repeat purchasing
Who are the trend setters?
Product take-up
Repeat purchasing
Group Buying
Product take-up
Repeat purchasing
Take a new industry with rapid growth
Group Buying industry sales by month
Source: Quantium research
Product take-up
Repeat purchasing
0
10
20
30
40
50
60
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1
2010 2011 2012 2013 2014 15
Sale
s ($m
)
Take a new industry with rapid growth
Group Buying industry sales by month
Source: Quantium research
Product take-up
Repeat purchasing
0
10
20
30
40
50
60
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1
2010 2011 2012 2013 2014 15
Sale
s ($m
)
Take a new industry with rapid growth
Group Buying industry sales by month
Source: Quantium research
Product take-up
Repeat purchasing
0
10
20
30
40
50
60
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1
2010 2011 2012 2013 2014 15
Sale
s ($m
)
Take a new industry with rapid growth
Group Buying industry sales by month
Source: Quantium research
Product take-up
Repeat purchasing
0
10
20
30
40
50
60
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1
2010 2011 2012 2013 2014 15
Sale
s ($m
)
Take a new industry with rapid growth
Group Buying industry sales by month
Source: Quantium research
Product take-up
Repeat purchasing
0
10
20
30
40
50
60
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1
2010 2011 2012 2013 2014 2015
Sale
s ($m
)
Take a new industry with rapid growth
Group Buying industry sales by month
Source: Quantium research
Product take-up
Repeat purchasing
0
10
20
30
40
50
60
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1
2010 2011 2012 2013 2014 2015
Sale
s ($m
)
Early Adopters
Take a new industry with rapid growth
Group Buying industry sales by month
Source: Quantium research
Product take-up
Repeat purchasing
0
10
20
30
40
50
60
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1
2010 2011 2012 2013 2014 2015
Sale
s ($m
)
Early Adopters
Band Wagon
Take a new industry with rapid growth
Group Buying industry sales by month
Source: Quantium research
Product take-up
Repeat purchasing
0
10
20
30
40
50
60
1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1
2010 2011 2012 2013 2014 2015
Sale
s ($m
)
Early Adopters
Late Adopters
Band Wagon
Who are the early adopters? Proportion of Group Buying customers by generation
Source: Quantium research
Product take-up
Repeat purchasing
* Generation Y is restricted to people 25+ to remove any skews attributed to online payment accessibility
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Generation Y* Generation X Baby Boomers TraditionalistsProp
ortio
n of
Gro
up B
uyin
g C
usto
mer
s
Generation
Early Adopters Jumped on the bandwagon Late Adopters
Proportion of Group Buying customers by generation
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Generation Y* Generation X Baby Boomers TraditionalistsProp
ortio
n of
Gro
up B
uyin
g C
usto
mer
s
Generation
Early Adopters Jumped on the bandwagon Late Adopters
Who are the early adopters?
1.05x 1.10x
0.9x
Source: Quantium research
0.6x
Product take-up
Repeat purchasing
* Generation Y is restricted to people 25+ to remove any skews attributed to online payment accessibility
33% 31%
39%
35%
25% 29%
3% 5%
Proportion of Group Buying customers by generation
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Generation Y* Generation X Baby Boomers TraditionalistsProp
ortio
n of
Gro
up B
uyin
g C
usto
mer
s
Generation
Early Adopters Jumped on the bandwagon Late Adopters
Who are the early adopters?
Source: Quantium research
Product take-up
Repeat purchasing
* Generation Y is restricted to people 25+ to remove any skews attributed to online payment accessibility
Who has the largest brand repertoire?
Product take-up
Repeat purchasing
Average number of brands transacted with by industry by generation
Source: Quantium research
Who has the largest brand repertoire?
Product take-up
Repeat purchasing
* Excludes customers with less than three transactions in the category
0
5
10
15
20
25
Airlines Cafes andRestaurants
DepartmentStores
Fashion Fuel Jewellery OnlineWagering
Supermarkets
Ave
rage
num
ber o
f bra
nds
per c
usto
mer
*
Generation Y Generation X Baby Boomers Traditionalists
Average number of brands transacted with by industry by generation
Source: Quantium research
Who has the largest brand repertoire?
Product take-up
Repeat purchasing
* Excludes customers with less than three transactions in the category
0
2
4
6
8
10
Airlines Cafes andRestaurants
DepartmentStores
Fashion Fuel Jewellery OnlineWagering
Supermarkets
Ave
rage
num
ber o
f bra
nds
per c
usto
mer
*
Generation Y Generation X Baby Boomers Traditionalists
Average number of brands transacted with by industry by generation
Source: Quantium research
Who has the largest brand repertoire?
Product take-up
Repeat purchasing
* Excludes customers with less than three transactions in the category
0
2
4
6
8
10
Airlines Cafes andRestaurants
DepartmentStores
Fashion Fuel Jewellery OnlineWagering
Supermarkets
Ave
rage
num
ber o
f bra
nds
per c
usto
mer
*
Generation Y Generation X Baby Boomers Traditionalists
Average number of brands transacted with by industry by generation
Source: Quantium research
Who has the largest brand repertoire?
Product take-up
Repeat purchasing
* Excludes customers with less than three transactions in the category
0
2
4
6
8
10
Airlines Cafes andRestaurants
DepartmentStores
Fashion Fuel Jewellery OnlineWagering
Supermarkets
Ave
rage
num
ber o
f bra
nds
per c
usto
mer
*
Generation Y Generation X Baby Boomers Traditionalists
Average number of brands transacted with by industry by generation
0
2
4
6
8
10
Airlines Cafes andRestaurants
DepartmentStores
Fashion Fuel Jewellery OnlineWagering
Supermarkets
Ave
rage
num
ber o
f bra
nds
per c
usto
mer
*
Generation Y Generation X Baby Boomers Traditionalists
Source: Quantium research
Who has the largest brand repertoire?
Product take-up
Repeat purchasing
* Excludes customers with less than three transactions in the category
Average number of brands transacted with by industry by generation
Source: Quantium research
Who has the largest brand repertoire?
Product take-up
Repeat purchasing
* Excludes customers with less than three transactions in the category
0
2
4
6
8
10
Airlines Cafes andRestaurants
DepartmentStores
Fashion Fuel Jewellery OnlineWagering
Supermarkets
Ave
rage
num
ber o
f bra
nds
per c
usto
mer
*
Generation Y Generation X Baby Boomers Traditionalists
Average number of brands transacted with by industry by generation
* Excludes customers with less than three transactions in the category
Source: Quantium research
Who has the largest brand repertoire?
Product take-up
Repeat purchasing
0
2
4
6
8
10
Airlines Cafes andRestaurants
DepartmentStores
Fashion Fuel Jewellery OnlineWagering
Supermarkets
Ave
rage
num
ber o
f bra
nds
per c
usto
mer
*
Generation Y Generation X Baby Boomers Traditionalists
So what does this all mean for product take up?
Gen X is more likely to try something new
Product take-up
Repeat purchasing
Gen Y is more likely to try more brands
Define consumer behaviour
Repeat purchasing
Product take-up
Who are the trend setters?
Who tries the most products?
Who is the most likely to return?
Who gives the largest share of wallet?
Who are the most price sensitive?
Repeat purchasing
Why do consumers come back?
Quality Lazy
Charitable
Budget Comfort
Feel exclusive
Product take-up
Repeat purchasing
Repeat purchasing
Why do consumers come back?
Lazy
Charitable
Budget Comfort
Feel exclusive
Who is likely to return? 1.
2. Who will spend
the highest share of wallet?
Quality
Product take-up
Repeat purchasing
Different facets of loyalty
Product take-up
Repeat purchasing
Likely to return Loyal
High share of wallet Exclusively loyal
Who is the most likely to return?
Product take-up
Repeat purchasing
Returning is proportional to how many transactions you’ve made
Probability of returning to a lunch spot by transaction number
Probability of returning to a lunch spot in Sydney CBD by transaction number
Source: Quantium research
* Excludes customers with less than three transactions in the category
40%
50%
60%
70%
80%
90%
100%
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th
Prob
abilit
y of
retu
rn w
ith a
yea
r
Transaction number
Gen Y is more likely to return Lunch spot Fashion retailer
Source: Quantium research Source: Quantium research
40%
50%
60%
70%
80%
90%
100%
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10thProb
abilit
y of
retu
rn w
ith a
yea
r
Transaction number
Generation Y Generation XBaby Boomers Traditionalists
40%
50%
60%
70%
80%
90%
100%
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10thProb
abilit
y of
retu
rn w
ith a
yea
r
Transaction number
Generation Y Generation XBaby Boomers Traditionalists
* Excludes customers with less than three transactions in the category
Who has the highest share of wallet?
Product take-up
Repeat purchasing
Share of wallet to quantify loyalty
75% Jim’s Chinese Restaurant
17% Joe’s Italian Kitchen
8% Pete’s Fish ‘n’ Chips
Person A Person B
21% Joe’s Italian Kitchen
56% Jim’s Chinese Restaurant
23% Pete’s Fish ‘n’ Chips
Product take-up
Repeat purchasing
Average share of wallet by industry Favourite brand share of wallet by industry
Source: Quantium research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
OnlineWagering
DepartmentStores
Jewellery Airlines Supermarkets Fuel Fashion Cafes andRestaurants
Shar
e of
wal
let w
ith fa
vour
ite b
rand
*
* Excludes customers with less than three transactions in the category Product take-up
Repeat purchasing
Average share of wallet by industry Favourite brand share of wallet by industry
Source: Quantium research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
OnlineWagering
DepartmentStores
Jewellery Airlines Supermarkets Fuel Fashion Cafes andRestaurants
Shar
e of
wal
let w
ith fa
vour
ite b
rand
*
* Excludes customers with less than three transactions in the category Product take-up
Repeat purchasing
Average share of wallet by industry Favourite brand share of wallet by industry
Source: Quantium research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
OnlineWagering
DepartmentStores
Jewellery Airlines Supermarkets Fuel Fashion Cafes andRestaurants
Shar
e of
wal
let w
ith fa
vour
ite b
rand
*
* Excludes customers with less than three transactions in the category Product take-up
Repeat purchasing
Average share of wallet by industry Favourite brand share of wallet by industry
Source: Quantium research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
OnlineWagering
DepartmentStores
Jewellery Airlines Supermarkets Fuel Fashion Cafes andRestaurants
Shar
e of
wal
let w
ith fa
vour
ite b
rand
*
* Excludes customers with less than three transactions in the category Product take-up
Repeat purchasing
Average share of wallet by industry Favourite brand share of wallet by industry
Source: Quantium research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
OnlineWagering
DepartmentStores
Jewellery Airlines Supermarkets Fuel Fashion Cafes andRestaurants
Shar
e of
wal
let w
ith fa
vour
ite b
rand
*
* Excludes customers with less than three transactions in the category Product take-up
Repeat purchasing
Average share of wallet by industry Favourite brand share of wallet by industry
Source: Quantium research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
OnlineWagering
DepartmentStores
Jewellery Airlines Supermarkets Fuel Fashion Cafes andRestaurants
Shar
e of
wal
let w
ith fa
vour
ite b
rand
*
* Excludes customers with less than three transactions in the category Product take-up
Repeat purchasing
Average share of wallet by industry Favourite brand share of wallet by industry
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
OnlineWagering
DepartmentStores
Jewellery Airlines Supermarkets Fuel Fashion Cafes andRestaurants
Shar
e of
wal
let w
ith fa
vour
ite b
rand
*
Source: Quantium research
* Excludes customers with less than three transactions in the category Product take-up
Repeat purchasing
Average share of wallet by industry Favourite brand share of wallet by industry
Source: Quantium research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
OnlineWagering
DepartmentStores
Jewellery Airlines Supermarkets Fuel Fashion Cafes andRestaurants
Shar
e of
wal
let w
ith fa
vour
ite b
rand
*
* Excludes customers with less than three transactions in the category Product take-up
Repeat purchasing
Average share of wallet by generation Favourite brand share of wallet by industry by generation
Source: Quantium research
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
OnlineWagering
DepartmentStores
Jewellery Airlines Supermarkets Fuel Fashion Cafes andRestaurants
Shar
e of
wal
let w
ith fa
vour
ite b
rand
*
Generation Y Generation X Baby Boomers Traditionalists
* Excludes customers with less than three transactions in the category Product take-up
Repeat purchasing
Price sensitivity
Product take-up
Repeat purchasing
Who is the most price sensitive? Proportion of supermarket purchases on promotion by generation
0%
5%
10%
15%
20%
25%
30%
35%
Generation Y Generation X Baby Boomers Traditionalists
Prop
ortio
n of
item
s pur
chas
ed o
n pr
omot
ion
Source: Quantium research
32% 34%
33% 30%
Product take-up
Repeat purchasing
Generational hypothesis
Most likely to try something new
Most likely to return
Most likely to try more brands
Least price sensitive
Highest share of wallet
Product take up Repeat purchasing
Generation X Traditionalists Generation Y Traditionalists Baby Boomers
Generation Y Generation Y Generation X Traditionalists Inconclusive
Insights for launching new products
Customer mix will change over the product lifecycle
Your ‘best’
customers may be the least loyal
Be conscious of
customer constraints
Target younger
segments during the product launch
Questions?
