New figures revealed by consumer researchers NeilsonIQ show Gen X consumers will spend $15.2 trillion (around £11.28 trillion) this year worldwide, eclipsing the Baby Boomers’ $13.5 trillion (£10.02 trillion). In fact, Baby Boomers are also likely to be outspent by Millennials (people born between 1981 and 1996) this year. Millennials’ spending could reach $14.7 trillion (£10.91 trillion), knocking Boomers into third place.
Parcelhero says the rise of Generation X to the top spot is likely to have a significant impact on UK retail over the next decade.
Parcelhero’s Head of Consumer Research, David Jinks M.I.L.T., says: ‘Move over Baby Boomers. While the postwar Boomer generation has seen the values of their houses and pensions soar, leaving many comfortably off, many of them are now retired. That means Generation Xs, people currently aged between around 45 and 60, are now the UK’s biggest spenders.
‘There are approximately 13.7 million people in the UK who belong to Generation X, making up about 20 per cent of the total population. Gen X are now the biggest earners and highest contributors of tax, despite being a smaller cohort than the 14.1 million millennials. Despite this, Gen Xers have often been overlooked by retailers and marketers using traditional advertising approaches aimed at Boomers and digital marketing focused around millennials.
‘The new dominance of Gen X is going to mean significant changes, both on the High Street and online, as their preferences start to lead many retail trends. Gen Xers have been called “the latch key generation” as many grew up with both their parents working and/or divorced, letting themselves in when they returned home from school. Consequently, Gen Xers became one of the most self-reliant of recent generations, as well as the last to grow up without the support of mobile phones and the internet.
‘Whereas Boomers still preferred to make their biggest spending commitments in store, Gen X is equally happy to splash the cash online. They may be the last analogue generation but they are also enthusiastic digital adopters.
‘Brand loyalty is highest among Gen X consumers, who respond best to transparency, product performance and customer reviews, rather than flashy advertising, according to research by the customer engagement platform Salesfloor.
‘Gen X are also the most omnichannel of all generations. They research carefully online, reading experts’ and consumers’ reviews, but are equally likely to make their final purchase online or in-store. It’s also a generation less likely to be swayed by the opinions or promotions of online influencers. Indeed, Gen X may be the last generation willing to pay significantly more for proven quality and reliability.
‘While relatively immune to the influence of TikTokers, Gen X is still swayed by advertising but of a different kind to that which influenced Boomers. The direct to consumer (D2C) specialist ESW says only 21 per cent of Gen Xers are influenced by traditional TV adverts and 15 per cent by newspaper and magazine advertising but they are enthusiastic users of social channels to research new products. YouTube (47 per cent), Facebook (46 per cent) and Instagram (30 per cent) are the most popular such research channels. That’s not surprising, as 45 per cent of Gen Xers are regularly on Instagram and 58 per cent regularly view YouTube, according to BARB/Techedge, while video streaming, rather than broadcast TV, now accounts for 1 hour 14 minutes of their daily viewing time.
‘These huge changes in the way Gen X consumes media and ads is something that brands and retailers must consider when developing their advertising and customer engagement strategies. It also looks like a change that will hasten the demise of traditional advertising-based TV channels and print publications.
‘Having experienced the 2008 recession and Covid lockdowns, ESW found a third of Gen X has become more cautious about spending, with 29 per cent highlighting the desire to find the lowest possible price as their motivation for trying out international e-commerce platforms such as Shein. This financial prudence means Gen X shoppers need to see clear evidence of value alongside the convenience of tracked shipping, clear refund policies and easy returns. Retailers should consider investing more in both their sites and in their delivery services and partners, to ensure a long-term relationship with Gen X customers.
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