The generation of adults aged 50 is the group with the highest purchasing power, holding more than 50 percent of per capita purchasing power, and is therefore a very interesting target group for companies active in the consumer industry.
The German population is aging. Almost half (49 percent) of the German population will be 50 years or older and one in tree will be above the age of 60 by 2030. Seventy-five percent of Germans in 2020 lived in a single or two-person household, totaling around 30 million households.
Thanks to the rapid development of the internet as a research tool for purchasing decisions, the typical German consumer is savvier than ever. Information is just a click of a button away, and with the growth in popularity of smartphones and tablets, many can research alternatives to products on the go.
This means it is crucial for retailers to utilize technology in order to get the right information to the right person via the right channel at the right time (e.g. through social media or beacons to attract customers to the store).
Retail service and flexibility are imperative in both the online and offline worlds. Customers are better informed than ever before, and thanks to the development of the strong e-commerce industry, individuals can conveniently switch retailers with the click of a button. This can be seen in the high percentage of individuals who switch retailers when not satisfied.
Millennials are especially prone to switching from stationary retailers to their online counterparts but also other consumer groups increasingly do so when not satisfied with the offer in the shop.
High demands can also lead to low brand loyalty levels as customers shop around for the brand that meets their individual value-for-money concept. Trust in the shop, relevant product offer and (after) sales services are the top three factors influencing customer satisfaction in stationary retail.
Covid-19 and changing purchasing behavior
A recent study by the German Trade Association HDE points out that the long-term effects of the pandemic will be a clear change in values regarding shopping motivations. Mindful consumption – reduced to only that which is necessary – will become more important in contrast to consumption at all cost.
The pandemic has shown the various pitfalls of globalization and has pushed the trend for more regional and local shopping activity. Sustainability and fairness – as well as the social and ecological footprints of companies – have become more important in customer perceptions and are rewarded with increased loyalty where the concept is a good one.
Virtual services and retail experience
The demand for service and virtualization that the consumer has come to expect when shopping online (e.g. returning items, goodwill when returning items and virtual fitting) play a part as does a desire for experience (e.g. restaurant or café in the shop). The unique selling point that distinguishes stationary retail from online shopping is exactly this: the provision of a “feel-good” place with service, entertainment, a place to meet people combined with digital technology, efficiency and individualism.
Post-Covid-19 shopping combines environmental awareness with a desire for minimalism and ethically correct consumption in combination with experience and service. Companies that propose a good concept will win the loyalty of consumers and succeed in future challenges.