How Ecommerce Consumer Behavior Varies by Generation

The generation gap among ecommerce consumers has grown considerably over the last few years. So much so, online retailers can no longer use a “one size fits all” approach to marketing and customer targeting. Instead, they must cater to four or five generations of consumers with distinctly different behaviors and attitudes.

Based on our original research examining consumer behavior and attitudes, we’ve identified a number of clear distinctions between generations regarding what they expect from their ecommerce experience, how they shop online and their preferences. Our annual State of Consumer Attitudes Report revealed the behavior differences of shoppers from Gen Z all the way to baby boomers.

Gen Z Consumers Are Tech Savvy and Values-Driven

Gen Z are digital natives, primarily because they’ve grown up in a world enabled by technology. Not only do they know how to use technology, but they also tend to expect it. As a result, they expect to shop using digital wallets and other alternative payment options. Gen Z is a mobile-first generation, they expect personalized shopping experiences and they do their research before spending money.

Compared to their elders, Gen Z shoppers are an optimistic demographic. They understand well that the cost of things is increasing, but that isn’t stopping them from shopping online. In fact, Gen Z is expected to drive future revenue for businesses. According to Afterpay’s report, “Beyond the Crocs & TikToks. How Gen Z are shopping. U.S. Edition,” Gen Z is expected to account for 52% of global online spending by 2030.

Millennials Seek Out Trends

Similar to Gen Z, millennials are considered to be technology-savvy, mostly because they’ve experienced the emergence of technology first-hand. Millennials tend to prefer products that are innovative and on-trend. Many are still near the beginning of their careers, so they are just starting to become financially independent and tend to be cautious about spending.

Like their younger counterparts, millennials rely heavily on mobile commerce and online marketplaces. They appreciate personalized experiences when they shop but don’t consider it to be a critical factor in influencing a purchase. Instead, price and convenience are major motivators.

Gen X Consumers Are Omnichannel Shoppers

This generation is fiercely independent and quick to adapt to the digital age – many of them were in their 20s when the shift from analog to digital first took shape. That doesn’t mean Gen Xers are particularly savvy when it comes to technology, but many are willing to give it a try.

Gen X consumers often look for products that remind them of their past. They value good customer service and believe in brand loyalty, which can be gained with discounts and offers, as well as easy-to-understand exchange and return policies.

This generation is likely the most omnichannel of the four, using mobile, laptop and PCs, and online marketplaces. And, while Gen X tend to be financially stable, they still seek out a good bargain.

Baby Boomers Prefer Consistency

Compared to other generations, baby boomers are less comfortable with technology. They tend to shop primarily with laptops and desktop computers. It should also come as no surprise that this generation dislikes personalization. In fact, they may consider it a deterrent to making a purchase.

Baby boomers prefer simplicity and predictability. They tend to gravitate toward products and processes that are easy to use and access. And baby boomers look for high quality. As the generation with the most wealth and disposable income, baby boomers are financially capable of buying expensive products. At the same time, their financial independence is a result of being price conscious – meaning they gravitate toward ecommerce sites with fair pricing and convenient shipping.

So, what steps should retailers take to attract this range of generations? When it comes to marketing tactics, ecommerce businesses should focus on separating the generations into two categories.

How to Attract Younger Consumers

Gen Z and millennial ecommerce consumers resonate with marketing tactics that appeal to their social senses. The best tactics to attract these shoppers include:

• Customer testimonials are particularly appealing to Gen Z and millennial consumers because they help build trust and credibility. Using this tactic, ecommerce businesses can incent young online shoppers to learn about brands and products from their peers through social proof, making them more likely to purchase.
• Word-of-mouth marketing is another effective strategy for younger generations. It involves encouraging customers to create positive posts and other types of communication about a brand, product or service to their friends, family and social networks.
• Influencer marketing is similar to word-of-mouth marketing; however, it involves intentional and well-placed recommendations based on agreements with brands to reach a larger audience and generate sales.
• Lastly, FOMO marketing is an effective strategy to reach millennials. This tactic leverages the fear of missing out (FOMO) that about 69% of millennials
  
  

How to Reach Older Consumers

The “older” generations tend to respond better to more traditional tactics.

Email marketing is an ideal tactic for consumers who value service. The trick is making sure not to send too many emails and keep those communications as useful as possible. 

Loyalty programs are highly effective for Gen X and baby boomer consumers. These incentives and rewards can lead to repeat purchases, customer retention, high engagement and brand loyalty. On the flip side, online retailers need to be aware of fraudsters who take advantage of company policies and perpetrate coupon abuse, loyalty fraud, gift card fraud and other types of policy abuse.

One way to turn away every generation of customer is to decline their purchase.

Always Avoid False Declines

False declines — sometimes called “false positives” — happen when a customer’s valid order is declined because the business mistakes it as fraudulent. Unfortunately, they 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. Even when customers experience a soft decline, where they could try the transaction again, our research revealed that only 22% of customers definitely would do it.

Our research shows that today’s consumer is twice as likely to experience a false decline than be a victim of online fraud.

Why you should be concerned about false declines

When false declines happen, consumers don’t respond well. Our research shows that 41% of consumers will never return to your store after a false decline, and 32% say they will complain about their experience on social media.

When we look at false declines across generations, we can see even more displeasure. Boomers are the least understanding of false declines: 56% will never shop at your store again. Millennials (44%) are more likely to complain on social media.

It’s clear that both fraud and false declines erode the customer experience, which has become a critical focus for every ecommerce business.

How ClearSale Protects Your Business

ClearSale leverages a hybrid solution for fraud prevention, starting with a highly effective automatic approval algorithm that “learns” as more transactions are processed. Globally experienced fraud analysts assess the small percentage of orders flagged for review with the goal of locating as many additional approvals as possible. Fraudulent transactions are identified and declined.

Highly trained human analysts along with advanced machine learning address the friendly fraud threat in real time. Not only can we help protect your business over the long term, but we also guarantee transactions 100% against fraudulent chargebacks.

By applying this global lens and a large database of orders across industries, we’re able to quickly recognize fraud trends and help clients eliminate fraud threats and prevent chargebacks — all while approving more orders, faster.

To find out more about how you can prevent your company and your customers from being the victims of fraud, contact a ClearSale analyst today.