Closing the Generation Gap
Insights from GfK's pet-market data reveal that younger consumers measure up well against Baby Boomers when it comes to pet ownership.
For the pet retailer, knowing which SKUs and product categories are up or down is essential to decision making. But there are a host of other data dimensions that you can bring to growing and nurturing your business, such as developing a deeper knowledge of your customers and potential buyers. What motivates them? Where else do they shop? How do they relate to brands in the pet space?
Generations X and Y represent the future of consumer spending in essentially every category; and they have very distinct needs and preferences—different from Baby Boomers and pre-Boomers, and also from each other. GfK’s Roper Reports research shows that, while Generation Y (roughly ages 24 to 34) tends to comprise book-smart optimists who focus on fun before work, Generation X (ages 35 to 49) is generally more pragmatic, street smart and task-focused.
Many industry experts openly wonder if Millennials—considered basically equivalent to Gen Y—can truly fill the shoes of Baby Boomers, who have been prolific pet owners and buyers of pet products. Will young adults who have spent more time playing video games and surfing the web than climbing trees become pet aficionados?
Recent insights from GfK MRI, which interviews 25,000 consumers a year, suggest that the industry has little cause for worry. More than half (52 percent) of Gen-Xers now own a dog, and Millennials are not far behind (47 percent). By comparison, 48 percent of Boomers own a dog. More importantly, GfK’s research shows that Millennials account for 46 percent of those who say they are “very likely” to get a dog or cat in the next 12 months, compared to just 22 percent for Gen Xers.
Millennials also account for 37 percent of households that report having pet insurance, versus 26 percent for Gen X and 27 percent for Boomers. And one-third (33 percent) of Millennial pet owners report making two or more veterinarian visits a year—essentially equivalent to Gen X.
In a somewhat ominous sign for smaller pet shops, the GfK MRI reports also show that Millennials are more likely to shop at big-box stores (Petco, PetSmart) and online—most likely, in search of better deals and convenience. Millennials are less likely to shop at small pet-specialty stores, a potential threat to independent retailers in the future.
Another dimension of getting to know your customers is understanding the relationships they develop with brands, which are comparable, in many ways, to their connections to other people. While consumers may see some brands as “Best Friends” or “Gurus,” others may be “Strangers,” “Flings” or even “Enemies.”
GfK’s Brand and Customer Experience team has conducted a benchmark study among 17,000 consumers about their relationships to brands in 48 categories, including dog food. The average GfK Loyalty Plus Score for any brand in the study was 68, within a range of 0 to 100. Dog food brands, as a whole, came in above average, at an impressive 76.
Gen X has slightly stronger brand relationships and loyalty (score of 79) in dog food than Boomers and Gen Y, who average 74 and 75, respectively.
So what can we learn from this deeper dive into the worlds of Millennials, Gen X and Boomers?
• Today, more than ever, advertising and marketing—especially coupons and discounts—can be targeted. Do not think about or treat your customers as one group; tailor some efforts to established, older customers, and others to Millennials and similar up-and-coming shopper groups, based on their preferences.
• Independent retailers should use an understanding of Millennials’ wants and needs to make a strong case for staying loyal to your shop, or visiting for the first time. How can you appeal to their sense of fun and individuality, and help direct their passion toward your retail brand?
• Seek out new insights into your customers through websites, newsletters and other sources. GfK and others frequently release data on Millennials and other key consumer groups; watch the GfK blog (blog.gfk.com) and other sources for rich information.
Want to learn more about Millennials? Write to GfK about becoming a member of its POS database, and the company will connect you to a series of GfK webinars on Millennials. Contact Dave Stevens at firstname.lastname@example.org.
Maria Lange is Senior Product Manager on GfK’s Retail and Technology team, helping clients make the most of GfK’s pet specialty data and insights.