How Different Generations Will Shop for the Holidays in 2024

As we approach the 2024 holiday season, retailers are gearing up for another year of generational differences in shopping habits. Understanding these distinctions is crucial for businesses looking to capitalize on the year’s busiest shopping period. Let’s explore how each generation — from Baby Boomers to Gen Alpha — will likely approach their holiday shopping this year.

4 Macro Trends Influencing Holiday Shopping

While some factors impact generations differently, there are several overarching trends that we expect to influence spending this season. These trends include:

1. The Presidential Election — As Americans gear up for a new president, uncertainty is in the air. The weeks before an election typically cause a drop in spending.
2. A Shortened Holiday Shopping Season — There are only 27 days between Thanksgiving and Christmas; the holiday season hasn’t been this short since 2019. This fact is vital for retailers to remember, as some generations tend to shop later in the season. Ironically, however, the shopping season is getting longer thanks to big box retailers like Amazon, which kicked off its holiday season with Prime Big Deal Days in early October. Other retailers such as Walmart, Target, and Wayfair offered their deals in September and early October as well.
3. Inflationary Pressure — Consumers today feel tension from rising prices, geopolitical conflicts, and an unpredictable job market. As a result, the forecast for 2024 shopping is mixed, with 28% of consumers planning to spend more than the previous year and 27% planning to spend less.¹
4. Big Box Dominance — According to Morgan Stanley, Amazon alone accounted for a staggering 28% of all U.S. retail growth in Q1 2024. Not far behind, Walmart claimed another 10% of the growth. Together, these two retail behemoths account for approximately 38% of every additional retail sales dollar in the U.S.² This concentration of growth is creating a challenging environment for other retailers, making expansion difficult and fostering significant uncertainty in the market.

An Overview of the Generations and Their Usual Shopping Habits

In case you need a quick refresher, here’s a high-level overview of each generation and their usual shopping preferences (outside the holiday season):

• Baby Boomers: Born between 1946 and 1964, this generation was the top spending shopper before they migrated into the golden years. They remain the largest generation and make up 37% of US households.³
• Generation X: Born between 1965 and 1980, Gen X are the top purchasers in the United States. They are becoming empty nesters, have disposable income, and are spending $16,880 annually for CPG & general merchandise.⁴
• Millennials: Born between 1981 and 2000, Walmart is their top retailer, alongside other big box and club retailers like Amazon, Costco, and Target. As this generation shifts into parenthood, children and baby brands such as the Honest Company, Zaks, and Zarbees are also popular.⁵
• Generation Z: Born between 2001 and 2020, and never without a phone cemented to their hands, Gen Z has never known life without the Internet. They experience brands digitally but are more likely to shop at a mall than other generations.⁶
• Generation Alpha: Born between 2010 and 2024, this next generation mainly leverages its allowance while influencing purchase decisions. 69% of Gen Alpha children have already requested something they saw in an advertisement, with 50% asking for something before age six.⁷

Gen Z is Shopping Early & Online

Generation Z is one of the demographics that is most prepared to increase their spending this holiday season. A recent Experian survey reveals that Gen Z consumers are 34% more likely to boost their holiday spending compared to Gen X and boomers.⁸

However, this willingness to spend doesn’t mean Gen Z isn’t looking for value. Shopify reports that nearly half (48%) of Gen Zers would start their holiday shopping sooner if retailers offered early deals and promotions. This is significantly higher than the 28% of the general US population who would do the same.⁹

Key Takeaways

Expect Gen Z to shop early and online to pursue the best deals. Research suggests that retailers have a unique opportunity to capture Gen Z’s holiday spending by creating incentives that encourage early shopping — ahead of the Cyber Five (i.e., the five day period between Thanksgiving and Cyber Monday). They can also capture Gen Z’s attention by prioritizing social media campaigns and influencer partnerships. Approximately 75% of Gen Z individuals follow influencers on various social platforms, and these online personalities exert considerably more influence over Gen Z’s buying decisions than traditional influencers.¹⁰

Assist Millennials in Holiday Budget Management with BNPL

While some millennials are gearing up to buy more this holiday season, most appear to be approaching their spending with caution and financial anxiety. A Qualtrics survey conducted for Intuit Credit Karma, as reported by Retail Brew, reveals that 37% of millennials feel overwhelmed by anticipated holiday expenses, stating they “want to cry when they think about how much the holidays will cost them this year.”¹¹

To manage these costs, millennials are turning to flexible payment options. Services like Buy Now, Pay Later (BNPL) provide consumers with greater confidence to make larger purchases by spreading the cost over time. Not surprisingly, millennials are the most significant Buy Now Pay Later (BNPL) users, with 43% having used it, according to PaymentsJournal.¹² Adobe reports that 39% of millennials plan to use BNPL this holiday season.¹³

Key Findings

Retailers should look to emphasize value and unique offerings that justify increased spending. By ensuring BNPL options are in place, retailers can offer convenience, flexibility, and affordability while leaning into millennials’ impulse purchasing. 74% of consumers in this age group self-report that they make impulse purchases regularly.¹⁴

Baby Boomers and Gen X Expect More Streamlined Shopping Options

Gen Xers and baby boomers are increasingly likely to shop online via retailer websites than in stores.¹⁵ About 82 percent of Boomers belong to at least one social media site, with Facebook being their most popular site. Despite this, many consumers in these generations still prefer to research and demo products in-person.¹⁶

Key Findings

For older consumers, it’s essential that digital and physical experiences work together. By creating a streamlined experience that easily moves between shopping channels, retailers can foster reliability and trust with these generations — ensuring they remain loyal not only during the holiday shopping season, but all year long.

The Gateway to Gen Alpha

Gen Alpha is already deeply embedded in the digital world. YouTube and other video-centric social media apps have emerged as crucial platforms for entertaining and influencing Generation Alpha’s consumer behavior. A Morning Consult survey, as reported by Insider, reveals that 54% of Gen Alpha children have their own tablets, which they use to stream content.¹⁷ The same survey found that 56% of parents believe their children’s retail preferences are directly influenced by the online content they consume, mainly shopping and unboxing videos. According to Razorfish, 51% of Gen Alphas first become aware of brands through YouTube videos.¹⁸

Key Findings

While still largely beholden to their parents’ purchasing power, Gen Alpha will still play a substantial role in the holiday season — via both direct and indirect purchasing. Retailers must find ways to appeal to both Gen Alpha children and their parents, including creating marketing strategies that resonate with the entire household, and making it easy for parents to purchase and collect goods.

BOPIS + Smart Lockers: A Strategic Advance in Holiday Shopping

Due to the shortened shopping season, BOPIS is expected to drive 33% of global online orders the week before Christmas.¹⁹ It is worth noting that BOPIS is gaining ground, especially among Gen Z and millennials.²⁰ However, with nearly half of boomers preferring to shop in November and December, ensuring you have a streamlined option for in-store purchasing, pick-ups, and returns is essential.

BOPIS and BOPIL (Buy Online, Pick-up in Locker) help retailers boost the customer experience, as 83% of shoppers admit to paying as much attention to how they are treated as to the products they sell.²¹ By centralizing order collections and returns to convenient, secure parcel locker locations, businesses can reduce operating costs by up to 50%.²² Plus, order pick-up takes less than 30 seconds for customers!

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As we approach the 2024 holiday season, it’s clear that understanding generational differences in shopping habits is crucial for success. From Gen Z’s influencer-driven purchasing to Millennials’ budget-conscious approach and, older generations’ preference for flexibility, each generation presents unique challenges and opportunities.

Amidst these varying preferences, the rise of smart locker solutions to support BOPIS offers a unifying strategy to enhance the customer experience across generations. By adapting to these generational nuances and leveraging innovative technologies, retailers can navigate the complexities of the holiday season and create tailored shopping experiences that resonate with each demographic.

Ready to lock in your order management solution? Speak with a Parcel Pending representative today.

Sources:

1. Barton, C., Shenck, N., Nayak, M. et al. Deck the Halls Differently for 2024 Holiday Retail Success. www.bcg.com. September 17, 2024. https://www.bcg.com/publications/2024/deck-the-halls-for-2024-holiday-retail-success
2. Goldberg, Jason. The Holiday 2024 Shopping Season Will Be Unlike Any Other. www.forbes.com. May 29, 2024. https://www.forbes.com/sites/jasongoldberg/2024/05/29/the-holiday-2024-shopping-season-will-be-unlike-any-other/
3. Numerator. Discover the Boomer consumer. www.numerator.com. n.d. https://www.numerator.com/boomer-consumer-behavior/
4. Numerator. Discover the Gen X consumer. www.numerator.com. n.d. https://www.numerator.com/gen-x-consumer-behavior/
5. Numerator. Discover the Millennial consumer. www.numerator.com. n.d. https://www.numerator.com/millennial-consumer-behavior/
6. Numerator. Discover the Gen Z consumer. www.numerator.com. n.d. https://www.numerator.com/gen-z-consumer-behavior/
7. Parziale, A., Hudson, A., Paustian, S., and Putt, S. The Up-and-Comers: Understanding Gen Alpha. www.numerator.com. September 6, 2024. https://www.numerator.com/resources/blog/generation-alpha-future-consumers/
8. Experian Marketing Services. 2024 holiday shopping trends: How each generation will spend. www.experian.com. October 9, 2024. https://www.experian.com/blogs/marketing-forward/2024-holiday-shopping-trends-how-each-generation-will-spend/
9. Shopify. Americans say they’re holding firm on holiday shopping – the season starts now. www.shopify.com. October 10, 2023. https://www.shopify.com/news/americans-say-they-re-holding-firm-on-holiday-shopping-the-season-starts-now
10. Radial. Gen Z and Millennial Shopping Trends in 2024. www.radial.com. March 28, 2024. https://www.radial.com/insights/gen-z-and-millennial-shopping-trends-in-2024
11. Feger, Arielle. Tips to help retailers reach Gen Alpha, Gen Z, and beyond this holiday season. www.emarketer.com. November 14, 2023. https://www.emarketer.com/content/tips-help-retailers-reach-gen-alpha-gen-z-beyond-this-holiday-season
12. PaymentsJournal. What Generation is Most Likely to Use BNPL?. www.paymentsjournal.com. July 14, 2023. https://www.paymentsjournal.com/what-generation-is-most-likely-to-use-bnpl/
13. Adobe Digital Insights. 2024 US Holiday Shopping Forecast. business.adobe.com. September 25, 2024. https://business.adobe.com/resources/sdk/adobe-holiday-shopping-forecast.html
14. Radial. Gen Z and Millennial Shopping Trends in 2024. www.radial.com. March 28, 2024. https://www.radial.com/insights/gen-z-and-millennial-shopping-trends-in-2024
15. Feger, Arielle. Guide to holiday retail: Consumer spending stats and shopping trends. www.emarketer.com. April 23, 2024. https://www.emarketer.com/insights/holiday-sales-data/
16. Yang, Peter. How to Effectively Market to Baby Boomers. keap.com. June 8, 2023. https://keap.com/small-business-automation-blog/marketing/digital-marketing/how-to-market-to-baby-boomers
17. Feger, Arielle. Tips to help retailers reach Gen Alpha, Gen Z, and beyond this holiday season. www.emarketer.com. November 14, 2023. https://www.emarketer.com/content/tips-help-retailers-reach-gen-alpha-gen-z-beyond-this-holiday-season
18. Feger, Arielle. What marketers need to know about Gen Alpha. www.emarketer.com. August 29, 2023. https://www.emarketer.com/content/what-marketers-need-know-about-gen-alpha
19. Salesforce. Salesforce 2024 Holiday Forecast: Retailers Must Tackle Shorter, More Competitive Shopping Season with Discounts, Data, and AI. www.salesforce.com. August 29, 2024. https://www.salesforce.com/news/stories/holiday-predictions-2024/
20. Furman, A., Bukovac, B., Pedersen, K., and Kletzel, J. Holiday Outlook 2024. www.pwc.com. n.d. https://www.pwc.com/us/en/industries/consumer-markets/library/holiday-outlook-trends.html
21. Barnes, Jim. Why Retailers Should Actively Nudge Consumers To Buy Online, Pick Up In Store (BOPIS). www.forbes.com. January 8, 2021. https://www.forbes.com/councils/forbestechcouncil/2021/01/08/why-retailers-should-actively-nudge-consumers-to-buy-online-pick-up-in-store-bopis/
22. Based on client data; your results may vary.