Fraud Management

Jun 30, 2023

Why Ecommerce Businesses Need Gen X Consumers

Gen X shoppers play a big role in today’s ecommerce market. Sure, this generation grew up analog and likes to shop in-store as a first choice — but online businesses are finding that Gen X is full of fiercely loyal online customers. The trick is to earn and maintain that loyalty. Your ecommerce strategy should include a focus on attracting Gen X and avoiding false declines and fraud, which can jeopardize this important relationship. Ecommerce businesses are smart to appeal to Gen X customers: This generation is the highest spending demographic in the country, with an average annual expenditure of $83,000 – that’s more than their younger generational siblings. Gen X are also less likely to bounce from one online store to another in the search for a bargain. However, they will do their research to make sure your brand and your business is trustworthy.

So, with Gen X being ready to give their spending money to a select few ecommerce retailers … how can you make sure your store is one of them? It starts with understanding how this generation shops.

Gen X Consumer Behavior

Known as the original “sandwich generation,” Gen X consumers have very distinct consumer behaviors that shape how they shop online.

Gen X consumers do their research

As consumers, Generation X consumers are likely to do quite a bit of research before trying a new product. In fact, 58% prefer to find new items by searching online. It doesn’t mean this group will necessarily switch brands. That requires some convincing. Make sure to feature product reviews from customer to help these shoppers know they can trust your brand.

Gen X shoppers are fiercely loyal

Brand loyalty is a hallmark of Generation X. In fact, an eMarketer study found that over 40% of Gen X consumers will continue shopping with the brands they like. So, invest in the delightful customer experiences that make Gen X shoppers fall (and stay) in love with your brand.

There’s a lot at stake: In our original research, 46% of Gen X consumers responded that they would not continue shopping with an online store after a bad experience. Simply put, once you’ve secured a Gen Xer’s business, it’s yours to lose.

Another consideration? Many Gen X customers may be looking for a new ecommerce home, so to speak. Some of the longtime retailers they’ve trusted since childhood are no more … leaving them searching the digital wilderness for another retailer they can rely upon. Impress Gen X customers, and they’ll not only stick around, but will tell all their friends about you.

Gen X shoppers want to belong

Gen X consumers are the original latchkey kids, and they look for the type of belonging they may not have experienced in their youth. That may be why more than 60% of them look for brands that build strong customer communities, online or otherwise. There, these Gen X customers rely on reviews of your brand and products to make their decisions, as well as the advice from other customers on how to get the most from your products.

Gen X prefer in-store shopping

Gen X grew up running to the corner store by themselves for a loaf of bread, a jug of milk, and a stick of butter, so they tend to prefer shopping in-store. In fact, 73% of Gen X prefer to purchase products in-store.

However, we found in our original research that 65% of Gen X consumers who’ve made the switch to shop online plan to continue. That’s promising for ecommerce businesses … as long as they make their website experiences as attractive as possible to keep Gen X customers online.

What makes a superior user experience for Gen X?

Inherent to consumer trust is a level of confidence that your business will give customers what they need, when they need it.

Sounds like shopping in a brick-and-mortar store, right?

That’s what ecommerce businesses need to provide Gen X consumers: User experiences (UX) that instill confidence and trust. The safer and more comfortable consumers feel while navigating your website or app, the more their confidence in your brand will grow. Assess your website for the following best practices:

Think like an influencer and display certifications and ratings prominently.
Perform periodic testing and usability reviews on every page and interface to find broken links, errors, misspellings, or any other technical glitches.
Use technology like pop-ups, chatbots or design features to communicate information about additional costs and fees, shipping caveats, return policies, and any other “fine print.”
Opt for filters over multi-level dropdown menus for easier navigation.

Show Gen X customers they belong

Another way to earn Gen X consumer trust is to recognize them at key junctures on their buyer’s journey. For example, creating an autofill function on your checkout page that populates name, address, email, phone and other data gives customers a similar feeling to being greeted by name at their local store.

Ultimately, Gen X consumers want familiarity and trust.

And it’s at the checkout where everything can be lost in an instant.

Fraud Incidents Create a Sense of Distrust

Two of the most surefire ways to lose a Gen X shopper’s trust? Expose them to fraud or decline their valid orders.

Our original research found that over 20% of Gen X consumers are less likely to complete a purchase online for fear of online scams or fraud. On the flip side, 82% of Gen Xers report they are more likely to buy from a store they can trust with their data.

This means your site has to not only promise, but prove, it can protect customer data. But a fraud protection strategy isn’t enough. In fact, if your fraud prevention tactics are too strict, you could end up with an even bigger issue.

False Declines Create a Sense of Disdain

False declines — sometimes called “false positives” — happen when a customer’s valid order is declined because the business mistakes it as fraudulent. Approximately 58% of declined transactions are actually legitimate orders.

Unfortunately, false declines are quite common. Our original research shows that 25% of respondents experienced at least one false decline in 2022, and 36% of those customers experienced two or more false declines.

How Gen X feels about false declines

When Gen X customers experience false declines, their reactions are mixed, according to our 2022 Consumer Behavior Survey data:

66% of Gen X consumers will attempt to make their purchase again – likely because they may assume the mistake was theirs.
60% will reach out to customer support in an effort to resolve the issue.

But not every Gen X customer will be so understanding.

42% of Gen X consumers will never shop with your store again after experiencing one false decline.
34% will take their complaint to social media

That’s where false declines can get expensive.

False declines are costly

Our research has shown that over 50% of Gen X customers spend more than $200 per month online.

Think about the customer who won’t re-attempt to make their purchase and will never shop on your site again. That customer has a lifetime value for your business.

A false decline doesn’t just cost you $200. That customer, alone, costs your company $2,400 each year, for every year they would have been shopping with you.

A GenX customer likely will be shopping for another 10-20 years, multiplied by that $2,400.

That’s up to $48,000 your company will never see.

To make matters even worse, if that customer tells their friends and/or posts on social media, your business is now at risk to lose the lifetime value of even more customers.

That’s why a safe assumption is that every $1 in false declines equals a loss of $13.

What can businesses do?

How to Reduce False Declines and Delight Gen X Customers

Even with a focus on UX, you’ll still need to make sure your company has a solid strategy to prevent false declines. At ClearSale, we have developed a global lens and large database that allows us to help clients approve more orders, faster.

Our insight into fraud patterns and trends comes from working with businesses around the world in some of the most high-risk regions. We maintain a massive transaction database that is constantly learning as more orders are processed, and we can see the impact fraud has on diverse markets. This makes it easier for us to identify fraud trends as soon as they emerge and then use those insights to make more accurate decisions.

Machine learning/AI

All transactions are screened using artificial intelligence and machine learning to process transactions and fine tune fraud models based on customer behavior. Transactions that pass with flying colors are automatically approved, and questionable or suspicious transactions are flagged for further review.

Contextual fraud review

Our data scientists and fraud analysts can help with secondary reviews of potentially fraudulent orders. They use their expertise and understanding of fraud trends – while sharing that information with your team – to determine if a transaction is valid or not. And, if a company so chooses, our analysts can pleasantly and very diplomatically reach out directly to customers to confirm they made the purchase —all the while, training your team to do the same.

Post-processing audit

Machine learning/AI can also be used post-processing to validate decisions and help find patterns to be aware of moving forward. For instance, our auditing program offers a safe, test environment where we analyze random sets of declined transactions to see what would have happened if we had approved the orders. This enables us to measure the accuracy of our client’s automated rules and fine-tune them as needed.