For the first time, four generations are active simultaneously in the US marketplace; leading to a more diverse market. Baby Boomers and their children, called Generation Y or Millennials, compose the largest two generations and wield the largest spending power. While these two generations are similar in size, their shopping behavior, use of technology, and consumer sentiment are highly disparate. This generational gap creates new challenges for marketers, as they must appeal to a variety of preferences, without alienating any customers.
Baby Boomers
Baby Boomers are contributing to the high rate of growth in the over 60 cohort, a group which is increasing at 2.6% annually, worldwide. Due to people living longer, healthier lives, the 60+ age group will continue to be the fastest growing group for the rest of the twenty-first century.
The financial squeeze likely contributes to the fact that 65% of Boomers compare prices online before making a big purchase. Online shopping is continuing to grow in popularity: 75% of Boomers, or 45.2 million people, will be digital buyers by 2014.2 Boomers are more likely to perform online research at home before shopping, likely due to a low propensity to own smartphone.
Baby Boomers are brand loyal shoppers, but need to know the benefits they will receive from purchases, effectively understanding what is in it for them before making a purchase. 
To win and retain customers, brands must target Boomers during their big-screen planning phase at home, and demonstrate the value and benefits of products to drive purchases.
Millennials
Millennials, or Generation Y, are the second largest generation at 80 million in size, composing 25% of the US population.3 This generation, born during the late ‘80s into the early ‘00s, is growing into a record purchasing power, with different needs and wants than their Boomer parents. While the Millennials are comparable in size to the Boomers, their purchasing power is not yet identical. One-third of the group is in college and the remaining two-thirds of the group in the workplace faces stagnant job prospects, unable to maximize their earning potential.
Millennials grew up in the age of the internet, and are active, connected consumers, spending an average 25 hours per week online. Forty-five percent of Millennials spend a minimum of one hour per day on retail websites, contributing to a 15% growth rate in retail eCommerce in 2012.4 The Millennial shopper dines out frequently, reducing their need for groceries. Forty six percent eat outside of the home at least weekly, while 25% eat out several times per week. Millennials are still shopping in brick and mortar stores for food items, although their preferences lean towards discount department stores, such as Walmart or Target, over traditional grocery stores.
Forty percent grocery shop weekly5, primarily shopping the perimeter of the store. When making purchasing decisions, Millennials are not brand loyal, and rely on socially sourced opinions, posing challenges for marketers who are finding traditional techniques are no longer effective.
Trends
With consumers now arrayed across generations, marketers are facing an ever increasing combination of consumer behavior. Marketers need to meet different needs and use different persuasion techniques to win over shoppers. Segmenting shoppers by generation, while not a panacea, is a useful place to start. Generation-wide trends provide insight to shared habits, and provide places to capitalize on the differences within generations.
Manufacturers and retailers must also take advantage of data to effectively target consumers. Segmenting simply by age is no longer good enough, especially as Baby Boomers stampede into the over 60 demographic. Baby Boomers are aging, and do not like to be reminded of it. While marketers have found success by catering to younger generations through products like baby shampoo and aspirin, successful marketing to Boomers is still yet to be defined.
The rise of data broker companies, which collect and aggregate specific data on consumers through a variety of sources, provide marketers the ability to know their customers like never before. This data allows companies to track consumers’ activity from Facebook browsing to direct page views and is sophisticated enough to generate tailored offers based on tracked activity.Consumer data provides valuable insights on how to best reach consumers, as they are no longer glued to TV screens during primetime, due to a wealth of second screens and convenient watch later options. Companies are beginning to invest in online advertising to capture consumers during their browsing periods.
As Millennials move into higher spending years, retailers and manufacturers need to seize the opportunity to be curators for this generation, harnessing data to drive targeted, specific offers, and creating physical and digital touch points to interact and retain consumers. Conversely, Boomers are becoming empty nesters and starting to scale back. Smaller packaging and wellness focused products will be appreciated by this consumer group, which still has a large disposable income due to the sheer size of the generation. Marketers would be wise to capitalize off the wealth of consumer data and create unique approaches to newly segmented generational sub-sets. It is no longer enough to think of CPG consumers as “she”: rather, a new era is upon us, where “she” is one of many, not the uniform average.
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2 “For Digital Shopping, Baby Boomers Favor Desktop Over Mobile,” eMarketer, Aug. 14, 2013 (http://www.emarketer.com/Article/Digital-Shopping-Baby-Boomers-Favor-Desktop-Over-Mobile/1010130)
3 M. Leanne Lachman and Deborah L. Brett, “Generation Y: Shopping and Entertainment in the Digital Age,” Urban Land Institute, May 14, 2013 (http://www.uli.org/wp-content/uploads/ULI-Documents/Generation-Y-Shopping-and-Entertainment-in-the-Digital-Age.pdf)
4 “US Digital Future in Focus 2013,” comScore, Feb. 2013, (http://www.comscore.com/Insights/Presentations_and_Whitepapers/2013/2013_US_Digital_Future_in_Focus)
5 M. Leanne Lachman and Deborah L. Brett, “Generation Y: Shopping and Entertainment in the Digital Age,” Urban Land Institute, May 14, 2013 (http://www.uli.org/wp-content/uploads/ULI-Documents/Generation-Y-Shopping-and-Entertainment-in-the-Digital-Age.pdf)
6 “ecommerce and Consumer Goods: A Strategy for Omnichannel Success,” Booz & Co, Nov. 30, 2012 (http://www.booz.com/media/file/BoozCo_E-Commerce-and-Consumer-Goods.pdf)
7 “ecommerce and Consumer Goods: A Strategy for Omnichannel Success,” Booz & Co, Nov. 30, 2012 (http://www.booz.com/media/file/BoozCo_E-Commerce-and-Consumer-Goods.pdf)