Forrester Research: Retailers Should Focus on Lucrative Older Shoppers, Not Millennials

Retailers should target older shoppers who have more money to spend in lieu of millennials who have less disposable income, according to Forrester Research’s “The Future of Shopping” report, which studied income and demographic shifts over the past 40 years. 

Using labor statistics and census data, analyst Sucharita Mulpuru said Forrester proves that retailers “have wasted time and money concerning themselves with the changing behaviors of young consumers – which distracts them from possibilities for improved sales.” The history of technology innovation suggests that changes affect all age cohorts, and older shoppers have more money to spend, while the younger cohort has only shrunk in spending power and size over the past four decades, according to the report.

A majority of consumer spending has shifted from those younger than 45 – who now comprise a smaller percentage of the population and are laden with student loan debt – to those 45 and older, who have built up equity in their homes and are earning larger incomes. Retailers’ obsession with millennials is misplaced because they do not have the money to spend, according to Mulpuru. 

In the research, Mulpuru outlines the future retail world, where hyped distractions such as location technologies, digital wallets, and same-day delivery services are just that – hype. She focuses on real near-term opportunities such as mobile tools, marketplaces and dynamic pricing that will help retailers address cost savings, and get shoppers to buy more and on longer-term innovations that promise to transform retail, such as remote customer service, 3D printing, and biometrics.

Mulpuru contends that only six retail sectors have a chance to thrive in this future state: the Web, restaurants, education, health care, manufacturers and luxury. “The rest will struggle, and without a fundamental structural improvement in their economics compared with competitors, they will ultimately shutter,” she said.