Table of Contents:

• What Drives the Purchasing Behavior and Decision-Making Process of Each Generation?

• How Can Data-Driven Audience Segmentation Improve Generational Targeting?

• How Should Channel and Messaging Strategies Adapt for Each Generation?

• How Can Brands Measure the Effectiveness of Generational Targeting Strategies?

• What Trends Are Shaping the Future of Generational Marketing and Audience Strategy?

• Win By Targeting Ages and Stages

Baby boomers and Gen Z shop differently, but even within these generations, no two consumers are the same. Although people in defined demographics share several cultural, socioeconomic, and technology experiences, the fragmentation that has become more common in the overall marketplace extends to age groups.

In addition to differences within age groups, there is more generational overlap in today’s market. For example, although younger consumers lean into technology, many older buyers are also keen on high-tech tools and have embraced e-commerce. Circana’s data shows that 46% of Millennials are comfortable using new tech tools, more than the 42% of Gen Z consumers who shared that sentiment, and boomers actually own more smart TVs and other tech than younger generations.

If a proverbial cookie-cutter approach didn’t always work before, it certainly doesn’t today, given the complexities of modern consumer behavior. A more nuanced approach, grounded in data, helps brands and retailers refine their generational targeting across and within demographics and ultimately resonates with shoppers at the point of sale.

An integrated approach that combines transactional data and deep generational insights helps marketers optimize their targeting. Brands can use past purchase behavior to gauge future buying habits, weighing generational variables. This purchase-based approach is often a more reliable strategy than targeting by birth year alone.

What Drives the Purchasing Behavior and Decision-Making Process of Each Generation?

To understand how to sell to members of a generation, you first need to understand the world in which they live. It’s less about age as a number and more about larger circumstances and where your consumers live (and buy) under those circumstances.

In recent years, economic pressures have affected groups to varying degrees. Younger consumers are coming of age at a volatile time, making them price sensitive and value conscious. Circana’s recent report on generational shifts affirms that Gen Zers are financially pragmatic and value research to make informed decisions.  At the same time, boomers and Gen Xers who are later in their careers or approaching retirement are also cautious when it comes to their finances. Nearly two-thirds (62%) of Gen X workers say they are still financially recovering from the pandemic. The youngest and oldest cohorts, then, are connected by economic volatility in unexpected ways. 

Life stage, versus actual age, also influences buying habits. Millennials and Gen Xers are in the thick of raising families, making them prime buyers of larger pack sizes and bulk items. There are subtle differences within the family-rearing stages, too: Circana’s research shows that Gen Z and millennials are the primary buyers of baby care and juvenile products and video games compared to Gen Xers who are at other stages of parenting young adults.

Meanwhile, younger consumers or those without children prioritize convenience, often opting for smaller pack sizes that fit an on-the-go lifestyle. Gen Z also skews the highest among the age groups for dining out at restaurants, per Circana.

How Can Data-Driven Audience Segmentation Improve Generational Targeting?

Data-driven audience segmentation can improve generational targeting by giving brands and retailers the ability to tailor their strategies to specific consumers, whether it’s like-minded consumers within one cohort or shoppers who have similar motivations at their particular point in life.

Segmentation is particularly crucial when trying to capture new buyers in a category, such as a young parent buying diapers for the first time or a freshly minted 21-year-old deciding what beer to buy. Brands that leverage a data-based approach to win new shoppers, especially younger consumers, can build loyalty that typically deepens with age. 

How Should Channel and Messaging Strategies Adapt for Each Generation?

As they do across their marketing efforts, brands and retailers can tailor their outreach to audiences in different age groups, if that makes sense for their business and product offerings. During that process, marketers may adjust their channel and messaging strategies based on the composition of their intended audience.

In general, it is important for brands to understand how their specific shoppers engage with their category. This involves analyzing which channels are most effective for reaching different generational cohorts. The right channel to reach a Gen X or boomer consumer may differ significantly from the one needed to connect with a millennial or Gen Z shopper or, for that matter, a very young Gen Alpha consumer.

Execution within channels must take into account age-based behaviors and preferences. Many younger consumers, especially those in the Gen Z cohort, are technologically savvy and adept at using ad-blocking technology on digital platforms. To circumvent this, businesses can look at systems like social media apps where ad blocking is less effective.

Brands and merchants can also take advantage of the power of video. For example, 15-second clips that are not skippable have become a powerful tool and have been shown to reach younger people who try to avoid other forms of ads. 

The messaging itself must also be adapted based on the brand, category, and consumer use case. In the cold cereal category, for example, messaging to GenX or boomer consumers might focus on nostalgia, while communications to millennials might emphasize the appeal to children in a household. Understanding the motivations of these consumers shapes the storytelling.

Timing is key for channel and messaging strategies aimed at generations. In general, the goal is to catch people early in the path to purchase. Online advertising plays a critical role in engaging with consumers the first time they consider a category and introducing them to your brand before they even reach the physical store aisle or digital page.

How Can Brands Measure the Effectiveness of Generational Targeting Strategies?

How do you know if your generational targeting is working? An accurate measure of success is the actual incremental dollars generated from a campaign. This requires a test-and-control methodology to isolate the impact of your marketing efforts. By comparing the behavior of a targeted group to that of a control group, you can accurately assess the lift in sales.

By analyzing household lift alongside audience mix, brands can see which generational segments are responding. For instance, if you are targeting Gen X with a bulk-buy message but seeing no lift in that demographic, you know your creative or placement needs tweaking. 

What Trends Are Shaping the Future of Generational Marketing and Audience Strategy?

The future of generational marketing is moving away from ticking off age group boxes, especially as there are more intertwining threads among groups. This means marketing strategies will need to rely less on stereotypes and more on shared behaviors.

Artificial Intelligence is the next frontier in deciphering these behaviors. AI’s primary benefit is its ability to consume vast amounts of data to predict the likelihood of conversion. Instead of a marketer concluding that a 30-year-old wants to buy coffee, AI analyzes thousands of data points to identify the specific individual who is ready to buy coffee right now. With AI, it is pivotal to consider transparency and ethical use, as well as the importance of feeding AI the best, most complete data so it can generate the best results.

In this and the future environment, market and technology shifts allow for a holistic data-driven approach. The more data points you have beyond just generational trends, the sooner you can capture opportunities in the market. In a world where consumers are constantly evolving within and beyond their age bracket, brands that use data to predict the future and engage in the present, rather than just reacting to the past, will be the ones that win.

Win By Targeting Ages and Stages 

By combining generational insights with robust purchase data, adapting channel strategies to bypass ad blockers, and using advanced metrics like household lift, brands can create campaigns that truly resonate. As a leader in providing technology, AI, and data to fast-moving CPGs and retailers, Circana partners with brands and retailers to capture, analyze, and share transactional and generational insights and to measure the effectiveness of campaigns. 

Frequently Asked Questions About Targeting Generational Audience Segments

How can brands balance personalization with broad generational relevance?

By adopting an omnichannel approach to marketing, brands can deliver both broad brand messaging through avenues like linear TV, and highly customized messaging through channels that allow for more granular targeting. Brands should consider universal themes that resonate across generations and adapt their delivery while not sacrificing their core message. 

What are the biggest misconceptions about generational marketing today?

Generations are not homogeneous groups. There is often an over-simplification of consumers based on broad demographics. Assuming that baby boomers are not tech-savvy or that gen Z can only be reached through social media limits your impact and is not supported by data. It is important to both get accurate insights into generations, but to also organize audience segments by shared purchase behaviors to ensure your strategy is connected to buying habits. 

How can consumer-insight data support stronger collaboration between marketing, retail, and supply chain teams?

Data visibility across teams is key to successful strategies. By sharing demand signals, unifying forecasting data, and aligning goals across partnerships, you can more accurately plan, execute, and measure. Visualizing key insights about consumer behavior and brand performance, can help teams adjust their strategies more effectively to address issues with availability, messaging, and positioning.