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The effect of age on shopping orientation—choice orientation types of the ageing shoppers
Journal of Retailing and Consumer Services 20 (2013) 165–172
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The effect of age on shopping orientation—choice orientation types of the ageing shoppers Anna-Maija Kohijoki *, Heli Marjanen Department of Marketing and International Business, Turku School of Economics (University of Turku), Rehtorinpellonkatu 3, 20500 Turku, Finland
a r t i c l e i n f o
abstract
Available online 14 December 2012
Traditionally, ageing consumers have been considered and treated as a rather homogeneous group. The appropriateness of this way of conduct is increasingly challenged when the baby-boom generation is reaching the retirement age. In the near future, 55 þ consumers will be the dominant consumer segment in Western societies. Therefore, retailers should be more aware of the heterogeneous needs and wants of the ‘‘new old’’. In the current study, six segments of ageing (55–75 years old) consumers were formed based on choice orientation in the specialty retailing context. The findings were compared to those obtained using the sample of younger (18–54 years old) consumers. The study was based on the household survey collected in Helsinki metropolitan area in 2009. The results indicate that the ageing market is formed of different consumer types which are rather similar to those found among younger age cohorts. & 2012 Elsevier Ltd. All rights reserved.
Keywords: Ageing consumers Baby-boomers Choice orientation Consumer segments Non-food retailing
1. Introduction Consumers in the Western societies are ageing. According to the Eurostat Database (2011) the old-age dependency ratio (the ratio between the number of persons aged 65 and over against the number of persons aged from 15 to 64) of European Union is expected to rise from 26% to 38% in 2030. The population in Finland is among the fastest ageing in EU; during the coming twenty years the dependency ratio will reach 44%. How to cater for the needs of the ageing population is a burning issue in all Western societies, access to retail services being one of the vital concerns. However, in retailing the 55þ consumers have not gained the attention they deserve with respect to the size of that segment. Despite of the contradictory information provided by consumption statistics and several academic studies, the stereotypical image of old consumers as frail penny-pinchers outside the mainstream consumption still dominates (e.g. Swinyard and Rinne, 1994; Moschis et al., 1997; Szmigin and Carrigan, 2001; Myers and Lumbers, 2008, Higham, 2010). Old and ageing consumers are often considered as a homogenous group - very similar to each other but different to younger age groups (Lumpkin, 1985; Timonen, 2008). This view is increasingly challenged during the coming years when the large and relatively wealthy baby-boom generation reaches retirement age. They differ from the earlier generations
*
Corresponding author. Tel.: þ358 2 333 9307; fax: þ358 2 333 8900. E-mail address: anmakoh@utu.fi (A.-M. Kohijoki).
0969-6989/$ - see front matter & 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.jretconser.2012.11.004
due to their higher purchasing power, better health and longer life expectancy, which will lead to changes in lifestyles and shopping behavior (Leventhal, 1991; Reisenwitz and Iyer, 2007). The baby-boomers defined by Eurostat were born 1945–1964; according to definitions commonly used in Finland, however, the baby-boomers were born in 1945–1950, according to some definitions 1945–1956. Central to the narrow definition is that baby-boomers are considered as a rather homogeneous group of people with similar experiences, as they were young in the 1960s when profound changes in the Finnish society, culture and political climate occurred (Erola et al., 2004). It has also been stated that baby-boomers are the generation which refused to ‘‘grow up’’, i.e. refused to express ‘‘mature’’ behavior and consumption patterns when they reached middle age (Wilska, 2004; Higham, 2010). In the near future, 55þ consumers will be the dominant consumer segment in Western societies. They offer a new and challenging business opportunity for retailers who should be more aware of the heterogeneous needs and wants of the ‘‘new old’’. In the current study shopping orientations of the ageing (55–75 year old) consumers were investigated in order to demonstrate that the 55þ market consists of different consumer segments which, however, are not so different to younger consumers. Using post hoc segmentation (factor analysis and clustering) to combine variables related to shopping destination choices with demographic and shopping related lifestyle variables, six significantly different shopper types were formed. The empirical data was collected in 2009 in the Helsinki metropolitan area (N ¼ 4582, 1956 aged 55 þ). Especially the relevance of age as a
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segmentation variable was considered using the available household survey data.
2. Old, elderly and ageing consumers Starting from the definition, the ageing consumers are a challenging object of study. The term ageing consumer has many synonyms in different studies such as the elderly, senior, aged, mature or silver shoppers. All these terms are rather vague. The chronological age is the most frequently used method to define the ageing consumers but there is no clear consensus on the age brackets (Moschis et al., 1997; Bone, 1991; Ahmad, 2002). In several studies, the older or elderly consumers are 65 years old and older (e.g. Mason and Bearden, 1978; Lumpkin, 1985; Oates et al., 1996; Kohijoki, 2011) but in some studies 50, 55 or 60 years old and older are included (Burnett, 1996; Mumel and Prodnik, 2005; Meneely et al., 2009). Lesser and Hughes (1986) labeled the 45 years old and older as ageing. The age related segmentation method has gained criticism because most consumer behavior issues are related more to lifestyle than to the chronological age (Bone, 1991; Myers and Lumbers, 2008). As Westbrook and Black (1985) concluded, based on their study on shopper taxonomies, shopping motivations ‘‘are not simply the product of consumers’ socioeconomic standings or stage in life cycle’’. Bone (1991) reviewed 33 segmentation methods for the mature (50 þ) market and identified five main segmentation criteria: income, health, activity level, discretionary time, and response to others. People age differently and there are differences in attitudes, values and behavior even among people at the same age (Moschis, 1992). Already in the early 1990s Leventhal (1991) reported that people aged 65–74 were cognitively much younger than previous generations and that they had better health, education and income. This trend is expected to continue in the recent future. However, it is impossible to compare two generations because each of them has been brought up with a different set of circumstances and in different times.
3. Previous studies on choice orientation and the ageing consumers We begin with a brief presentation of the previous shopping orientation based studies on consumer segmentation and the way how ageing consumers have been manifested in different studies. The purpose of the market/consumer segmentation is to divide heterogeneous consumers into more homogeneous groups. Market segmentation enables understanding of the key variables that differentiate specific segments and, consequently, is the key element in the development of a successful marketing strategy. A priori segmentation methods typically apply the external characteristics of consumers, such as age or social class, which do not necessarily determine consumer behavior, while post hoc methods often aim to classify consumers according to their observed or stated behavior (El-Adly, 2007). Although ageing consumers are claimed to be neglected by the retailers, several researchers have focused on the shopping behavior of ageing consumers in their studies (e.g. Mason and Bearden, 1978; Burt and Gabbott (1995); Leighton and Seaman, 1997; Bone, 1991; Moschis, 1992; Myers and Lumbers, 2008; Kohijoki, 2011). In these studies, the older have been described as rational and ‘‘light’’ shoppers and, in some cases, as disadvantaged consumers. They have been found to be store loyal and to prefer stores located near their homes or in town centers.
Convenience and one-stop shopping but also the recreational and social dimensions of shopping have been found to be important for them. Orientation is an interactive component controlling the tendency of behavior. The dimensions of shopping-related orientation are reflections of the interaction between a consumer and the retail environment, developed on the basis of long-established relations (Laaksonen, 1987). Choice criteria of consumers are influenced by the structure of the retail environment and by the consumers’ own socio-economical and physical characteristics. Starting in the 1950s, there has been several studies aiming to explain and understand consumer behavior in different shopping contexts (see e.g. Stone, 1954; Lumpkin, 1985; Lesser and Hughes, 1986; Boedeker and Marjanen, 1993; Jarrat, 1996; Moye and Kincade, 2003). In these studies consumers have been segmented based on different types of demographic, psychographic, lifestyle or choice criteria variables. In the seminal study, Stone (1954) identified four shopper types among housewives: economic, personalizing, ethical and apathetic. Youth, aspiration and economic disadvantage described the economic shoppers who were interested in shopping, sensitive to price, quality and product variety. Strong personal attachments with store and store personnel were important for personalizing consumers. The ethical consumers were willing to sacrifice low prices and wide selection for ethical shopping. The personalizing consumers had lower social status whereas the ethical consumers had relatively high social status. The apathetic consumers did not like shopping; it was an onerous duty for them. Convenience was more important than price, quality or ethical issues. This group was characterized by older women with worsening mobility. Lumpkin (1985) was the first to concentrate on the shopping orientations of the elderly (65 þ). His study indicates that there are sub-segments of the elderly that can be identified by shopping orientation profiles. Based on factor and cluster analyses, he identified three consumer types in fashion shopping: active apparel shoppers, the uninvolved (apathetic) and economic shoppers. Respective segments were also found in studies by Lesser and Hughes (1986) and Stone (1954). Lesser and Hughes (1986) used psychographic segmentation to formulate altogether 17 types of shoppers from which seven were named: inactive, active, service, traditional, dedicated fringe, price and transitional shoppers. The proportion of the ageing shoppers (45 þ) was highest among inactive shoppers and price shoppers. Similar to Stone’s apathetic shoppers, inactive shoppers did not express interest in shopping and they were particularly interested neither in price, service nor selection provided. Myers and Lumbers (2008) studied the views of older (55 þ) consumers on preferred shopping places, use of facilities and access to and within shopping centers. They identified four shopper types: targeted shoppers, shopaholics, occasional leisure shoppers and reluctant shoppers. Since 1990, several studies based on choice orientation have been conducted in the Turku area in Finland. In these studies, choice orientation has been defined as consumers’ tendency to select a place to shop which corresponds to their evaluation of the importance of various retail outlet characteristics. In the first study, Boedeker and Marjanen (1993) extracted six shopper types from a sample of 1104 households. Ten years later Marjanen et al. (2005) were able to extract from a sample of 1370 households again six shopper types which were, however, slightly different to those found in 1993: convenience seekers without cars, new type shoppers, traditional shoppers, product shoppers, individualistic quality seekers and inactive shoppers. In the later study, more versatile set of choice orientation statements was used. Age has been used in these studies as a background variable to describe shopper profiles produced.
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4. Aim, data and methods The aim of the study is to segment the ageing (55–75 year old) consumers according to their shopping orientations in the specialty retailing context. The study revolves around the effect of the chronological age on the shopping behavior of ageing consumers and whether their behavior is different to that of younger (18–54 year old) consumer cohorts. The study is based on the household survey conducted in 2009 in the Helsinki metropolitan area (Helsinki, Espoo, Kauniainen and Vantaa). The questionnaires were sent by post to randomly selected respondents but there was also an option to fill them in via Internet. Only five percent of 55 þ consumers chose this option compared to 13% of the younger respondents. The questionnaire was addressed to the eldest female, but the person who did most of the grocery shopping in the household was asked to fill it in. The questionnaires were based on those that Boedeker and Marjanen (1993) and Marjanen et al. (2005) used in their respective studies although the study area was not the same. The total number of the respondents was 4582 (response rate 25.5%) from which 1956 were 55 years old or older. Both the 55 þ, and higher educated consumers were over-represented in the data; almost 30% of the ageing respondents had polytechnic or university level education. Choice orientation was selected as a segmentation variable because previous research indicates that knowing what was important to different individuals when they shop would provide insight into the motivation underlying their shopping behavior (Westbrook and Black, 1985; Boedeker and Marjanen, 1993; Jarrat, 1996). Choice orientations were measured by analyzing the importance ratings of 28 store-choice criteria when choosing a destination for a non-food shopping trip. They were measured
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on a 5-point Likert-type scale, with 1¼no impact and 5¼very high impact. Shopping orientation segments were developed using a two-step process. First, the shopping orientation statements were factor-analyzed (principal components, varimax rotation) in order to extract the choice orientation dimensions. In the second phase, cluster analysis was used to create the shopper types based on factor scores.
5. Choice orientation factor dimensions of the ageing consumers From the data set of 1956 responses, 324 had to be rejected because of the missing data. The analysis revealed seven shopping orientation factors (KMO¼0.865; eigenvalues41) which explained 65.5% of the variance (Table 1). One criterion was excluded from the analysis (home delivery service) because of the low communality (.271). The factors were named according to the variables with the highest loadings on each factor. The first factor was called recreation while recreational elements such as wellness, entertainment and restaurant services had the highest loadings there. The second factor was called quality and selection because variables related to wide selection and high quality of products had their highest loadings there. The third factor was called car-based convenience because of the high loadings of parking-related criteria whereas convenient access by public transportation had a very high negative loading. The fourth factor was called price consciousness because of the high loadings of criteria ‘‘competitive special offers’’ and ‘‘low price level’’. The fifth factor was named as location-based convenience because ‘‘good location’’ and ‘‘access by public transportation’’ had their highest (although not very high) loadings there. Also the criterion
Table 1 Seven choice orientation factors extracted from 27 store-choice criteria for the 55þ sample. In addition to factor loadings and percent of variance explained by each factor, also the absolute rankings for each item are presented in the table. Factors
Variables
Ranking (mean)
Factor loading
Percent of variance
Factor 1 recreation
Wellness services (e.g. dayspa, hair salon) Entertainment services (e.g. cinema) Good cafe and restaurant facilities Reasonably priced restaurant services Other customers Convenient for shopping with the family Popular place to shop
1.6 1.5 2.6 2.4 1.9 2.7 2.5
0.79 0.78 0.73 0.68 0.56 0.48 0.47
13.9
Factor 2 quality and selection
Many good special stores Wide selection Choice of products unavailable elsewhere High class products
3.8 4.1 3.8 4.1
0.84 0.78 0.76 0.68
10.6
Factor 3 car-based convenience
Good parking facilities Free parking Convenient shopping hours (convenient access by public transportation
3.7 3.6 3.9 3.3
0.90 0.87 0.52 0.51)
9.8
Factor 4 price consciousness
Competitive special offers Low price level Possibility to use loyalty card I can get all I need at the same place
3.6 3.7 3.7 3.5
0.87 0.85 0.47 0.41
8.9
Factor 5 location-based convenience
Good location Convenient access by public transportation Public services (e.g. library, tax office) Easy to move around in the area
4.1 3.3 2.5 3.8
0.69 0.57 0.54 0.48
7.7
Factor 6 shopping atmosphere
Pleasant shopping surroundings Interesting place to shop
3.6 3.5
0.76 0.74
7.3
Factor 7 customer service
Skilled personnel Good customer service I can pay with preferred credit card
4.0 4.1 3.2
0.73 0.70 0.56 Total:
7.3
65.5
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‘‘public services’’ had its highest loading (0.54) here. Variables related to shopping atmosphere had high loadings on the sixth factor. The seventh factor which included both ‘‘skilled personnel’’ and ‘‘good customer service’’ was called customer service. Very similar factors have been extracted in earlier studies (see e.g. Marjanen et al., 2005). Although some of the loadings are rather low (below 0.50), the seven-factor solution provided here is well in accordance with the existing theory and exceptionally easy to interpret. Therefore, it offers a sound phase for the subsequent cluster analysis.
6. Choice orientation based ageing consumer segments Cluster analysis was carried out in order to segment the ageing consumers based on their choice orientation. For this purpose, the factor scores from the factor analysis were used. After testing the different number of clusters (2–8), six shopper segments were derived by non-hierarchical k-means cluster analysis. One respondent was removed from the analysis because she formed her own cluster irrespective of the number of clusters used. Demographic measures were used to deepen the picture of the shopper types. Demographic variables included sex and age of the respondent, whether the respondent was retired, household size, income, education, number of cars in the household and the use of car for shopping (Table 2). The first consumer segment was named as convenience oriented service seekers (Fig. 1). This was the oldest and smallest group, 12% of the respondents belonged to this segment and 55% of them were retired. The income level was rather low. They valued customer service higher than average respondents, but quality and selection was less important to them. Recreational aspects of shopping were of least importance to this group but they did appreciate pleasant and interesting shopping environments. Good parking facilities (including free parking) were also important although these shoppers were not especially price conscious. A rather similar but less mobile group - often called ‘‘service shoppers’’ - have been found in several earlier studies (see e.g. Lesser and Hughes, 1986; Boedeker and Marjanen, 1993). The second segment was called atmosphere oriented quality seekers. Almost 17% of the ageing respondents belonged to this group. They preferred quality and selection over low prices and convenience. Customer service and pleasant shopping
atmosphere were also important. In this group both income and education level were clearly the highest. Also the number of cars per household was very high (1.4) and the car was used for shopping more often than in other groups. A very similar group called ‘‘individualistic quality seekers’’ was for the first time found by Marjanen et al. in 2005. The third and largest segment (19.8%) was called traditional shoppers because they appreciated all ‘‘conventional’’ aspects of purpose oriented shopping - quality, selection, price and customer service-whereas the recreational aspects of the shopping were less important. The average age of this group was rather young (63.2 years) and a majority (63%) of the respondents belonging to this group was still working outside home. Respectively, the income level was the second highest. A very similar group has been found in earlier studies (see e.g. Lesser and Hughes, 1986; Boedeker and Marjanen, 1993). However, Marjanen et al. (2005) found this segment had become older in 10 years. The fourth shopper type was called convenience seekers. Over 17% of the respondents belonged to this group. Their demographic profile was rather similar to that of traditional shoppers but the choice orientation profiles were not, the most striking difference being that traditional shoppers appreciated customer service much more than the shopping atmosphere, while convenience seekers behaved just in the opposite way. Convenience seekers were also less interested in prices than traditional shoppers. The fifth segment was called price conscious public transport users. Approximately 16% of the respondents belonged to this group. This was the most price conscious group with the lowest average income level despite the high education level. The group mainly consisted of female respondents in smaller than average households. Only 26% of the households had a car, and, consequently, the car was used hardly ever for shopping. Price, convenience and public services were important for this group. A rather similar segment was found by Lesser and Hughes (1986); in their study the price oriented shopper segment included relatively many older consumers. The sixth and the second largest group in this study (18% of the respondents) was called recreational shoppers. A similar group has been found in many earlier studies - sometimes called ‘‘the new type shoppers’’ or ‘‘experimental shoppers’’ (Westbrook and Black, 1985; Jarrat, 1996; Marjanen et al., 2005) - where it has often been characterized by a high amount of families with children. The recreational aspects of shopping were clearly most important for this group of shoppers; it was the only segment where the factor
Table 2 Demographic profiles of shopper segments. Convenience oriented service seekers (12%) n 196 Sex (female) % 59 Age (mean) years 64.5 Retired % 55 Household size (mean) 1.9 Income quartile 2 900 h per month 24 4 400 h 32 6 500 h 20 Over 6 500 h 24 a Education (mean/mode) 4.1/6 Cars in household (mean) 1.2 b Use of car for shopping (mean/mode) On weekdays 2.3/1 At weekends 2.3/1 a b
Atmosphere oriented quality seekers (16.6%)
Traditional shoppers (19.8%)
Convenience seekers (17.2%)
Price conscious public transport users (16.4%)
Recreational shoppers (18.1%)
270 61 63.1 41 1.9
322 62 63.2 37 2
280 63 62.7 38 2
268 75 63.7 46 1.6
295 60 64.1 47 1.9
11 23 33 33 4.6/6 1.4
19 21 29 31 4.3/6 1.3
23 23 28 26 4.1/6 1.2
47 23 19 11 4.6/6 0.8
27 30 26 17 3.6/3 1.3
1.9/1 1.8/1
2.1/1 1.9/1
2.1/1 1.9/1
4.4/5 4.1/5
2.3/1 2.2/1
Education: primary school ¼ 1; secondary school ¼2; vocational school ¼3; high school ¼ 4; college ¼5; university level ¼6. Use of car for shopping: always ¼ 1; often¼ 2, sometimes¼ 3; seldom¼ 4; hardly ever ¼ 5.
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traditional shoppers
atmosphere oriented quality seekers
convenience oriented service seekers
convenience seekers
1.5
1.5
1.5
1.5
1
1
1
1
0.5
0.5
0.5
0.5
0
0
0
0
-0.5
-0.5
-0.5
-0.5
-1
-1
-1
-1
-1.5
-1.5
-1.5
-1.5
-2 F1 F2 F3 F4 F5 F6 F7
-2 F1 F2 F3 F4 F5 F6 F7
169
-2 F1 F2 F3 F4 F5 F6 F7
-2 F1 F2 F3 F4 F5 F6 F7
recreational shoppers
price conscious public transport users 1.5
1.5
F1 recreation 1
1
0.5
0.5
0
0
-0.5
-0.5
-1
-1
-1.5
-1.5
F2 quality and selection F3 car-based convenience F4 price consciousness F5 location-based convenience F6 shopping atmosphere F7 customer service
-2 F1 F2 F3 F4 F5 F6 F7
-2 F1 F2 F3 F4 F5 F6 F7
55+
18-54
Fig. 1. Choice orientation profiles of shopper types; 55þ and 18–54 years old respondents.
recreation had higher than average value. However, all the other factors had higher than average values too, indicating that these shoppers are rather demanding regarding every aspect of the shopping experience. This was the second oldest group, 47% of the respondents being retired. In line with earlier studies, they had rather low income and the lowest education level.
Convenience seekers were less interested in personal service whereas price was more important to them. They were least interested in organic and locally produced food. They were also most keen on their old habits. Price conscious public transport users were least mobile and least consumption oriented. Convenience oriented service seekers preferred quality over price but they were not willing to travel a lot because of shopping and they found the shopping centers slightly less attractive than the other groups.
7. Psychographic characteristics of the ageing consumer segments 8. Ageing vs. young and middle-aged shoppers The psychographic characteristics were measured by statements describing the respondents’ shopping and consumption related lifestyle aspects (Fig. 2). Psychographic profiles of the ageing shopper types were well in line with the dominating characteristics of their respective choice orientation types. Recreational shoppers found product demonstrations more interesting than the others and they were also most interested in advertisements and commercials. Atmosphere oriented quality seekers preferred quality and selection over price and convenient location. They also preferred organic and locally produced products and they did not mind traveling a bit further if the store was worth it. Traditional shoppers were rather ‘‘average’’ according to their statements except that they appreciated personal service and the country of the products they bought very high.
In order to find out whether the shopping orientations of ageing consumers were different to those of younger, choice orientation factors and choice orientation segments were also created using the under 55 year old sample. The analyses yielded almost identical factor dimensions (Appendix 1) and shopper segments (Fig. 1). Although some minor differences did emerge, the overall interpretation of the factors remained the same irrespective of whether criteria were added to or removed from them. The same factor names could be used because all the criteria which loaded on different factors in each sample had rather low meanings in both age groups (from 0.33 to 0.62). The only exception was the criterion ‘‘convenient shopping hours’’ which loaded highest
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1
2
3
5
4
I always stop to watch product demonstrations I quite often buy things on impulse I try to avoid noisy and busy places I keep up with the times and dress accordingly I appreciate personal service E-retailing is a competitive choice for me I wouldn't go to stores at all if I didn't have to Special stores should be open on Sundays I compare prices before I buy anything I prefer quality over price Well known brands guarantee high quality I prefer low prices over service I prefer convenient location to wide selection I prefer convenient location to low prices I prefer selection over price I don't mind to travel if the store is worth it Ads and commercials affect on my choices I prefer shopping centres over free standing stores I prefer environmentally friendly products The country of origin is not important to me I prefer organic products even if more expensive I’m a do it yourself type of person I usually prefer local produced food I rather stick to my old habits People buy too many unnecessary things nowadays My daily schedule is usually rather leisured I always seek new ideas and experiences convenience oriented service seekers
convenience seekers
atmosphere oriented quality seekers
price conscious public transport users
traditional shoppers
recreational shoppers
Fig. 2. Statements concerning shopping and consumption related lifestyle aspects. (1¼ totally disagree, 2¼ quite a lot disagree, 3 ¼partially disagree, 4¼ quite a lot agree, 5¼ totally agree).
(0.52) on the factor car-based convenience in the ageing sample, but on the factor location-based convenience (0.70) in the younger sample. Both factors, however, dealt with convenience. In absolute terms the ratings of the younger sample were higher for wide and versatile selection while the ageing sample put more weight on high quality products, skilled personnel and personal service. Good location, parking facilities and free parking were more important for the ageing sample while the younger ones were more interested in cafes and restaurants together with entertainment services. The older sample was also more priceconscious and willing to use their loyalty cards. Cluster analysis conducted using the under 55 year-old sample yielded six shopper segments which were rather similar to those found using the ageing sample (Fig. 1). Two of the groups—atmosphere oriented quality seekers and recreational shoppers–were almost identical in both samples. Also the shape of the profiles of the price conscious public transport users in both samples was rather similar. Although the profile of the convenience seekers in the younger sample was somewhat different to that of the ageing sample, the name of the group remained to be very illustrative. The interpretation of the findings was more complicated concerning segments convenience oriented service seekers and traditional shoppers, the more illustrative name for the first group in the younger sample maybe being inactive shoppers and quality oriented service seekers in the latter. In the seven-cluster solution inactive shoppers were found also in the older sample but this solution resulted in two pairs of very similar groups and was therefore rejected.
65-75
convenience oriented service seekers atmosphere oriented quality seekers
55-64
traditional shoppers
45-54
convenience seekers
35-44
price conscious public transport users recreational shoppers
18-34 0%
20 % 40 % 60 % 80 % 100 % Fig. 3. Shopper segments by age cohorts.
The consumer segments were analyzed also using age cohorts of 18–34, 35–44, 45–54, 55–64 and 65–75 years old (Fig. 3). Although the shopper types were rather evenly represented in all age cohorts, some differences did occur. Interestingly, the age cohort of 45–54 formed a mirror image between the two oldest and the two youngest cohorts. For example, the amount of convenience seekers was the highest among age cohort of 45–54, presumably indicating that this was the most time-pressured group. The share of convenience seekers decreased rather identically when age cohorts got older and younger. Vice versa, the number of convenience oriented service seekers and price conscious public transport users was the lowest in the age cohort of 45–54 but the number increased the older/ the younger the age
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cohorts were. The amount of atmosphere oriented quality seekers and traditional shoppers were rather similar in all age cohorts. However, in the age cohort 55–64 the share of these shoppers were slightly higher whereas the number of recreational shoppers was the smallest.
9. Conclusions In the Western societies ageing consumers will be the dominant consumer segment and a new and challenging business opportunity for retailers in the near future. However, in retailing the stereotypical image of older consumers still prevails although in order to target older consumers, the retailers should be more aware of the needs, wants and capabilities of their ageing clientele. The analyses conducted in the current study clearly indicate that the ageing consumers are not a homogeneous consumer group according to their shopping orientations although the psychographic profiles of different choice orientation types are rather similar. Six different and reasonable sized choice orientation types were found: convenience oriented service seekers (12%), atmosphere oriented quality seekers (17%), traditional shoppers (20%), convenience seekers (17%), price conscious public transport users (16%), and recreational shoppers (18%). Almost similar shopper types were found when respective analyses were conducted using the under 55 years old sample. No such group as ‘‘apathetic’’ or ‘‘inactive’’ shoppers was found among the ageing shoppers although it has emerged in most previous studies, including those conducted in Turku area. However, when using the under 55 years sample, such group did emerge (here named convenience oriented service seekers on the bases of the factor scores in the 55þ sample). The absence of the apathetic/inactive shoppers may be at least partly due to the low response rate (compared to our earlier studies), probably indicating that those who had a more positive attitude towards shopping were also more prone to respond. Also the high education level of especially the ageing respondents
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may have had an effect because apathetic/inactive shoppers have been found to have a rather low education level. Rather interesting findings came out when the shopper types were separated into five age cohorts (18–34, 35–44, 45–54, 55–64 and 65–75). According to the choice orientation, the oldest age cohorts were rather similar to the youngest cohorts. This means that both young and aged consumers appreciated similar store attributes when choosing the destination for non-food shopping. However, it does not mean that they do their shopping at the same stores or buy similar products. This phenomenon needs further analysis but according to the current study, there are socio-economic factors behind the similarities such as relatively low income level and the low number of cars in the households. For example, the number of price conscious public transport users was the highest among the youngest and the oldest age group. The study confirms the predictions that the baby-boomer generation will continue to balance work, family and play even when ageing, seek quality and personal service, increasingly seek comfort and convenience and show a growing interest in buying experiences (see e.g. Dychtwald and Gable, 1990), all this implying that they are more demanding consumers than previous generations. From the retailers’ point of view the main concern is to separate consumers according to their preferences of store characteristics and then profile the store to the targeted groups. The study indicates, however, that although the chronological age and consumer’s stage at the family life cycle do have an impact on certain needs and habits, they are not alone neither sufficient nor adequate criteria for efficient market segmentation in retailing.
Appendix A1 See Appendix Table A1.
Table A1 Choice orientation factors extracted from 27 store-choice variables for the 18–54 years old respondents. In addition to factor loadings and per cent of variance explained by each factor, also the absolute rankings for each item are presented in the table. Numbers of the factors 2 and 3 have been changed to match the factor numbers that emerged in the ageing sample. Factors
Variables
Ranking (mean)
Factor loading
Percent of variance
Factor 1 recreation
Entertainment services (e.g. cinema) Wellness services (e.g. dayspa, hair salon) Public services (e.g. library, tax office) Good cafe and restaurant facilities Reasonably priced restaurant services I can pay with preferred credit card Good parking facilities Free parking Convenient for shopping with the family (convenient access by public transportation Many good special stores Choice of products unavailable elsewhere Wide selection High class products Low price level Competitive special offers Possibility to use loyalty card Easy to move around in the area Good location Convenient shopping hours I can get all I need at the same place Interesting place to shop Pleasant shopping surroundings Other customers Popular place to shop Skilled personnel Good customer service
1.8 1.6 2.1 2.9 2.7 3.0 3.3 3.2 2.8 3.2 3.9 3.9 4.2 4.0 3.5 3.4 3.2 3.8 4.0 4.0 3.4 3.4 3.5 2.1 2.1 3.6 3.7
0.82 0.79 0.62 0.60 0.56 0.33 0.85 0.85 0.37 0.76) 0.83 0.78 0.74 0.63 0.90 0.89 0.47 0.74 0.72 0.70 0.57 0.80 0.76 0.58 0.57 0.83 0.83 Total:
11.5
Factor 2 car-based convenience
Factor 3 quality and selection
Factor 4 price consciousness
Factor 5 location-based convenience
Factor 6 shopping atmosphere
Factor 7 customer service
9.4
9.3
9.3
9.2
9.1
7.6 65.4
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References Ahmad, R., 2002. The older or ageing consumers in the UK: are they really that different? International Journal of Market Research 44 (3), 337–360. Boedeker, M., Marjanen, H., 1993. Choice Orientation Types and Their Shopping Trips to the City Centre vs. to an Edge-Of-Town Retail Park. Paper presented at the 7th International Conference on Research in the Distributive Trades, in University of Stirling, Scotland. Bone, P.F., 1991. Identifying mature segments. The Journal of Service Marketing 5 (1), 47–60. Burnett, J.J., 1996. Comparing the patronage selection criteria of the elderly: chronological age versus dependency. International Review of Retail, Distribution and Consumer Research 6 (3), 243–257. Burt, S., Gabbott, M., 1995. The elderly consumer and non-food purchase behavior. European Journal of Marketing 29 (2), 43–57. Dychtwald, K., Gable, G., 1990. Portrait of a changing consumer. Business Horizon 33 (1), 62–73. El-Adly, M.I., 2007. Shopping malls attractiveness: a segmentation approach. International Journal of Retail and Distribution Management 35 (11), 936–950. Erola, J., Wilska, T.-A., Ruonavaara, H., 2004. Johdanto. In: Erola, J., Wilska, T-A., ¨ (Eds), Yhteiskunnan moottori vai kivireki? Suuret ikaluokat ja 1960¨ ¨ 13–28. lukulaisuus. Kopiojyva¨ Oy, Jyvaskyl a, Eurostat Database. 2011 /http://epp.eurostat.ec.europa.eu/portal/page/portal/ eurostat/home/S (Projected old-age dependency ratio; (accessed 09.05.11.). Higham, W., 2010. Old Is the New Young. Adweek, March 17, /http://www. adweek.com/news/advertising-branding/old-new-young-101847S (accessed 09.05.11.). Jarrat, D.G., 1996. A shopper taxonomy for retail strategy development. The International Review of Retail, Distribution and Consumer Research 6 (2), 196–215. Kohijoki, A.-M., 2011. The effect of aging on consumer disadvantage in grocery retail services among the Finnish elderly. Journal of Retailing and Consumer Services 18 (4), 370–377. Laaksonen, M., 1987. Retail Patronage Dynamics. A study of Daily Shopping Behavior in the Context of Changing Retail Structure. PhD diss., Acta Wasaensia 22, University of Vaasa. Leighton, C., Seaman, C.E.A., 1997. The elderly food consumer: disadvantaged? Journal of Consumer Studies and Home Economics 21, 363–370. Lesser, J.A., Hughes, M.A., 1986. The generalizability of psychographic market segments across geographic locations. Journal of Marketing 50 (1), 18–27. Leventhal, R.C., 1991. The aging consumer: what’s all the fuss about anyway? The Journal of Consumer Marketing 8 (1), 29–34.
Lumpkin, J.R., 1985. Shopping orientation segmentation of the elderly consumer. Journal of the Academy of Marketing Science 13 (2), 271–289. Mason, J.B., Bearden, W.O., 1978. Profiling the shopping behavior of elderly consumers. The Gerontologist 18 (5), 454–461. Meneely, L., Strugnell, C., Burns, A., 2009. Elderly consumers and their food store experiences. Journal of Retailing and Consumer Services 16 (6), 458–465. Moschis, G.P., Lee, E., Mathur, A., 1997. Targeting the mature market: opportunities and challenges. Journal of Consumer Marketing 14 (4), 282–293. Moschis, G.P., 1992. Gerontographics: a scientific approach to analyzing and targeting the mature market. The Journal of Services Marketing 6 (3), 17–26. Moye, L.N., Kincade, D.H., 2003. Shopping orientation segments: exploring differences in store patronage and attitudes toward retail store environment among female apparel consumers. International Journal of Consumer Studies 71 (1), 58–71. Mumel, D., Prodnik, J., 2005. Grey consumers are all the same, they even dress the same – myth or realty? Journal of Fashion Marketing and Management 9 (4), 434–449. Myers, H., Lumbers, M., 2008. Understanding older shoppers: a phenomenological investigation. Journal of Consumer Marketing 25 (5), 294–301. ¨ Marjanen, H., Pitkaaho, M., Uusitalo, J., 2005. A Longitudinal Study of Choice Orientation Types and Their Shopping Trips in Turku, Finland. Paper presented at 13th International Conference on Research in the Distributive Trades, June 29–July 1, in Lund, Sweden. /http://www.tse.fi/EN/research/units/mylly/ Pages/Publications.aspxS. Oates, B., Shufeldt, L., Vaught, B., 1996. A psychographic study of the elderly and retail store attributes. Journal of Consumer Marketing 13 (6), 14–27. Reisenwitz, T., Iyer, R., 2007. A comparison of younger and older baby boomers: investigating the viability of cohort segmentation. Journal of Consumer Marketing 24 (4), 202–213. Stone, G.P., 1954. City shoppers and urban identification: observations on the social psychology of city life. The American Journal of Sociology 60 (1), 36–45. Swinyard, W.R., Rinne, H.J., 1994. The six shopping worlds of baby boomers. Business Horizon 37 (5), 64–69. Szmigin, I., Carrigan, M., 2001. Learning to love the older consumer. Journal of Consumer Behavior 1 (1), 22–34. Timonen, V., 2008. Ageing societies. a comparative introduction. Open University Press, Maidenhead. Westbrook, R.A., Black, W.C., 1985. A motivation-based shopper typology. Journal of Retailing 61 (1), 78–103. ¨ Wilska, T.-A., 2004. Suuret ikaluokat ja kulutusyhteiskunnan nuortuminen. In: Erola, J., Wilska, T-A., (Eds), Yhteiskunnan moottori vai kivireki? Suuret ¨ ¨ ¨ 241–257. ikaluokat ja 1960-lukulaisuus. Kopiojyva¨ Oy, Jyvaskyl a,
Contents lists available at SciVerse ScienceDirect
Journal of Retailing and Consumer Services journal homepage: www.elsevier.com/locate/jretconser
The effect of age on shopping orientation—choice orientation types of the ageing shoppers Anna-Maija Kohijoki *, Heli Marjanen Department of Marketing and International Business, Turku School of Economics (University of Turku), Rehtorinpellonkatu 3, 20500 Turku, Finland
a r t i c l e i n f o
abstract
Available online 14 December 2012
Traditionally, ageing consumers have been considered and treated as a rather homogeneous group. The appropriateness of this way of conduct is increasingly challenged when the baby-boom generation is reaching the retirement age. In the near future, 55 þ consumers will be the dominant consumer segment in Western societies. Therefore, retailers should be more aware of the heterogeneous needs and wants of the ‘‘new old’’. In the current study, six segments of ageing (55–75 years old) consumers were formed based on choice orientation in the specialty retailing context. The findings were compared to those obtained using the sample of younger (18–54 years old) consumers. The study was based on the household survey collected in Helsinki metropolitan area in 2009. The results indicate that the ageing market is formed of different consumer types which are rather similar to those found among younger age cohorts. & 2012 Elsevier Ltd. All rights reserved.
Keywords: Ageing consumers Baby-boomers Choice orientation Consumer segments Non-food retailing
1. Introduction Consumers in the Western societies are ageing. According to the Eurostat Database (2011) the old-age dependency ratio (the ratio between the number of persons aged 65 and over against the number of persons aged from 15 to 64) of European Union is expected to rise from 26% to 38% in 2030. The population in Finland is among the fastest ageing in EU; during the coming twenty years the dependency ratio will reach 44%. How to cater for the needs of the ageing population is a burning issue in all Western societies, access to retail services being one of the vital concerns. However, in retailing the 55þ consumers have not gained the attention they deserve with respect to the size of that segment. Despite of the contradictory information provided by consumption statistics and several academic studies, the stereotypical image of old consumers as frail penny-pinchers outside the mainstream consumption still dominates (e.g. Swinyard and Rinne, 1994; Moschis et al., 1997; Szmigin and Carrigan, 2001; Myers and Lumbers, 2008, Higham, 2010). Old and ageing consumers are often considered as a homogenous group - very similar to each other but different to younger age groups (Lumpkin, 1985; Timonen, 2008). This view is increasingly challenged during the coming years when the large and relatively wealthy baby-boom generation reaches retirement age. They differ from the earlier generations
*
Corresponding author. Tel.: þ358 2 333 9307; fax: þ358 2 333 8900. E-mail address: anmakoh@utu.fi (A.-M. Kohijoki).
0969-6989/$ - see front matter & 2012 Elsevier Ltd. All rights reserved. http://dx.doi.org/10.1016/j.jretconser.2012.11.004
due to their higher purchasing power, better health and longer life expectancy, which will lead to changes in lifestyles and shopping behavior (Leventhal, 1991; Reisenwitz and Iyer, 2007). The baby-boomers defined by Eurostat were born 1945–1964; according to definitions commonly used in Finland, however, the baby-boomers were born in 1945–1950, according to some definitions 1945–1956. Central to the narrow definition is that baby-boomers are considered as a rather homogeneous group of people with similar experiences, as they were young in the 1960s when profound changes in the Finnish society, culture and political climate occurred (Erola et al., 2004). It has also been stated that baby-boomers are the generation which refused to ‘‘grow up’’, i.e. refused to express ‘‘mature’’ behavior and consumption patterns when they reached middle age (Wilska, 2004; Higham, 2010). In the near future, 55þ consumers will be the dominant consumer segment in Western societies. They offer a new and challenging business opportunity for retailers who should be more aware of the heterogeneous needs and wants of the ‘‘new old’’. In the current study shopping orientations of the ageing (55–75 year old) consumers were investigated in order to demonstrate that the 55þ market consists of different consumer segments which, however, are not so different to younger consumers. Using post hoc segmentation (factor analysis and clustering) to combine variables related to shopping destination choices with demographic and shopping related lifestyle variables, six significantly different shopper types were formed. The empirical data was collected in 2009 in the Helsinki metropolitan area (N ¼ 4582, 1956 aged 55 þ). Especially the relevance of age as a
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segmentation variable was considered using the available household survey data.
2. Old, elderly and ageing consumers Starting from the definition, the ageing consumers are a challenging object of study. The term ageing consumer has many synonyms in different studies such as the elderly, senior, aged, mature or silver shoppers. All these terms are rather vague. The chronological age is the most frequently used method to define the ageing consumers but there is no clear consensus on the age brackets (Moschis et al., 1997; Bone, 1991; Ahmad, 2002). In several studies, the older or elderly consumers are 65 years old and older (e.g. Mason and Bearden, 1978; Lumpkin, 1985; Oates et al., 1996; Kohijoki, 2011) but in some studies 50, 55 or 60 years old and older are included (Burnett, 1996; Mumel and Prodnik, 2005; Meneely et al., 2009). Lesser and Hughes (1986) labeled the 45 years old and older as ageing. The age related segmentation method has gained criticism because most consumer behavior issues are related more to lifestyle than to the chronological age (Bone, 1991; Myers and Lumbers, 2008). As Westbrook and Black (1985) concluded, based on their study on shopper taxonomies, shopping motivations ‘‘are not simply the product of consumers’ socioeconomic standings or stage in life cycle’’. Bone (1991) reviewed 33 segmentation methods for the mature (50 þ) market and identified five main segmentation criteria: income, health, activity level, discretionary time, and response to others. People age differently and there are differences in attitudes, values and behavior even among people at the same age (Moschis, 1992). Already in the early 1990s Leventhal (1991) reported that people aged 65–74 were cognitively much younger than previous generations and that they had better health, education and income. This trend is expected to continue in the recent future. However, it is impossible to compare two generations because each of them has been brought up with a different set of circumstances and in different times.
3. Previous studies on choice orientation and the ageing consumers We begin with a brief presentation of the previous shopping orientation based studies on consumer segmentation and the way how ageing consumers have been manifested in different studies. The purpose of the market/consumer segmentation is to divide heterogeneous consumers into more homogeneous groups. Market segmentation enables understanding of the key variables that differentiate specific segments and, consequently, is the key element in the development of a successful marketing strategy. A priori segmentation methods typically apply the external characteristics of consumers, such as age or social class, which do not necessarily determine consumer behavior, while post hoc methods often aim to classify consumers according to their observed or stated behavior (El-Adly, 2007). Although ageing consumers are claimed to be neglected by the retailers, several researchers have focused on the shopping behavior of ageing consumers in their studies (e.g. Mason and Bearden, 1978; Burt and Gabbott (1995); Leighton and Seaman, 1997; Bone, 1991; Moschis, 1992; Myers and Lumbers, 2008; Kohijoki, 2011). In these studies, the older have been described as rational and ‘‘light’’ shoppers and, in some cases, as disadvantaged consumers. They have been found to be store loyal and to prefer stores located near their homes or in town centers.
Convenience and one-stop shopping but also the recreational and social dimensions of shopping have been found to be important for them. Orientation is an interactive component controlling the tendency of behavior. The dimensions of shopping-related orientation are reflections of the interaction between a consumer and the retail environment, developed on the basis of long-established relations (Laaksonen, 1987). Choice criteria of consumers are influenced by the structure of the retail environment and by the consumers’ own socio-economical and physical characteristics. Starting in the 1950s, there has been several studies aiming to explain and understand consumer behavior in different shopping contexts (see e.g. Stone, 1954; Lumpkin, 1985; Lesser and Hughes, 1986; Boedeker and Marjanen, 1993; Jarrat, 1996; Moye and Kincade, 2003). In these studies consumers have been segmented based on different types of demographic, psychographic, lifestyle or choice criteria variables. In the seminal study, Stone (1954) identified four shopper types among housewives: economic, personalizing, ethical and apathetic. Youth, aspiration and economic disadvantage described the economic shoppers who were interested in shopping, sensitive to price, quality and product variety. Strong personal attachments with store and store personnel were important for personalizing consumers. The ethical consumers were willing to sacrifice low prices and wide selection for ethical shopping. The personalizing consumers had lower social status whereas the ethical consumers had relatively high social status. The apathetic consumers did not like shopping; it was an onerous duty for them. Convenience was more important than price, quality or ethical issues. This group was characterized by older women with worsening mobility. Lumpkin (1985) was the first to concentrate on the shopping orientations of the elderly (65 þ). His study indicates that there are sub-segments of the elderly that can be identified by shopping orientation profiles. Based on factor and cluster analyses, he identified three consumer types in fashion shopping: active apparel shoppers, the uninvolved (apathetic) and economic shoppers. Respective segments were also found in studies by Lesser and Hughes (1986) and Stone (1954). Lesser and Hughes (1986) used psychographic segmentation to formulate altogether 17 types of shoppers from which seven were named: inactive, active, service, traditional, dedicated fringe, price and transitional shoppers. The proportion of the ageing shoppers (45 þ) was highest among inactive shoppers and price shoppers. Similar to Stone’s apathetic shoppers, inactive shoppers did not express interest in shopping and they were particularly interested neither in price, service nor selection provided. Myers and Lumbers (2008) studied the views of older (55 þ) consumers on preferred shopping places, use of facilities and access to and within shopping centers. They identified four shopper types: targeted shoppers, shopaholics, occasional leisure shoppers and reluctant shoppers. Since 1990, several studies based on choice orientation have been conducted in the Turku area in Finland. In these studies, choice orientation has been defined as consumers’ tendency to select a place to shop which corresponds to their evaluation of the importance of various retail outlet characteristics. In the first study, Boedeker and Marjanen (1993) extracted six shopper types from a sample of 1104 households. Ten years later Marjanen et al. (2005) were able to extract from a sample of 1370 households again six shopper types which were, however, slightly different to those found in 1993: convenience seekers without cars, new type shoppers, traditional shoppers, product shoppers, individualistic quality seekers and inactive shoppers. In the later study, more versatile set of choice orientation statements was used. Age has been used in these studies as a background variable to describe shopper profiles produced.
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4. Aim, data and methods The aim of the study is to segment the ageing (55–75 year old) consumers according to their shopping orientations in the specialty retailing context. The study revolves around the effect of the chronological age on the shopping behavior of ageing consumers and whether their behavior is different to that of younger (18–54 year old) consumer cohorts. The study is based on the household survey conducted in 2009 in the Helsinki metropolitan area (Helsinki, Espoo, Kauniainen and Vantaa). The questionnaires were sent by post to randomly selected respondents but there was also an option to fill them in via Internet. Only five percent of 55 þ consumers chose this option compared to 13% of the younger respondents. The questionnaire was addressed to the eldest female, but the person who did most of the grocery shopping in the household was asked to fill it in. The questionnaires were based on those that Boedeker and Marjanen (1993) and Marjanen et al. (2005) used in their respective studies although the study area was not the same. The total number of the respondents was 4582 (response rate 25.5%) from which 1956 were 55 years old or older. Both the 55 þ, and higher educated consumers were over-represented in the data; almost 30% of the ageing respondents had polytechnic or university level education. Choice orientation was selected as a segmentation variable because previous research indicates that knowing what was important to different individuals when they shop would provide insight into the motivation underlying their shopping behavior (Westbrook and Black, 1985; Boedeker and Marjanen, 1993; Jarrat, 1996). Choice orientations were measured by analyzing the importance ratings of 28 store-choice criteria when choosing a destination for a non-food shopping trip. They were measured
167
on a 5-point Likert-type scale, with 1¼no impact and 5¼very high impact. Shopping orientation segments were developed using a two-step process. First, the shopping orientation statements were factor-analyzed (principal components, varimax rotation) in order to extract the choice orientation dimensions. In the second phase, cluster analysis was used to create the shopper types based on factor scores.
5. Choice orientation factor dimensions of the ageing consumers From the data set of 1956 responses, 324 had to be rejected because of the missing data. The analysis revealed seven shopping orientation factors (KMO¼0.865; eigenvalues41) which explained 65.5% of the variance (Table 1). One criterion was excluded from the analysis (home delivery service) because of the low communality (.271). The factors were named according to the variables with the highest loadings on each factor. The first factor was called recreation while recreational elements such as wellness, entertainment and restaurant services had the highest loadings there. The second factor was called quality and selection because variables related to wide selection and high quality of products had their highest loadings there. The third factor was called car-based convenience because of the high loadings of parking-related criteria whereas convenient access by public transportation had a very high negative loading. The fourth factor was called price consciousness because of the high loadings of criteria ‘‘competitive special offers’’ and ‘‘low price level’’. The fifth factor was named as location-based convenience because ‘‘good location’’ and ‘‘access by public transportation’’ had their highest (although not very high) loadings there. Also the criterion
Table 1 Seven choice orientation factors extracted from 27 store-choice criteria for the 55þ sample. In addition to factor loadings and percent of variance explained by each factor, also the absolute rankings for each item are presented in the table. Factors
Variables
Ranking (mean)
Factor loading
Percent of variance
Factor 1 recreation
Wellness services (e.g. dayspa, hair salon) Entertainment services (e.g. cinema) Good cafe and restaurant facilities Reasonably priced restaurant services Other customers Convenient for shopping with the family Popular place to shop
1.6 1.5 2.6 2.4 1.9 2.7 2.5
0.79 0.78 0.73 0.68 0.56 0.48 0.47
13.9
Factor 2 quality and selection
Many good special stores Wide selection Choice of products unavailable elsewhere High class products
3.8 4.1 3.8 4.1
0.84 0.78 0.76 0.68
10.6
Factor 3 car-based convenience
Good parking facilities Free parking Convenient shopping hours (convenient access by public transportation
3.7 3.6 3.9 3.3
0.90 0.87 0.52 0.51)
9.8
Factor 4 price consciousness
Competitive special offers Low price level Possibility to use loyalty card I can get all I need at the same place
3.6 3.7 3.7 3.5
0.87 0.85 0.47 0.41
8.9
Factor 5 location-based convenience
Good location Convenient access by public transportation Public services (e.g. library, tax office) Easy to move around in the area
4.1 3.3 2.5 3.8
0.69 0.57 0.54 0.48
7.7
Factor 6 shopping atmosphere
Pleasant shopping surroundings Interesting place to shop
3.6 3.5
0.76 0.74
7.3
Factor 7 customer service
Skilled personnel Good customer service I can pay with preferred credit card
4.0 4.1 3.2
0.73 0.70 0.56 Total:
7.3
65.5
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‘‘public services’’ had its highest loading (0.54) here. Variables related to shopping atmosphere had high loadings on the sixth factor. The seventh factor which included both ‘‘skilled personnel’’ and ‘‘good customer service’’ was called customer service. Very similar factors have been extracted in earlier studies (see e.g. Marjanen et al., 2005). Although some of the loadings are rather low (below 0.50), the seven-factor solution provided here is well in accordance with the existing theory and exceptionally easy to interpret. Therefore, it offers a sound phase for the subsequent cluster analysis.
6. Choice orientation based ageing consumer segments Cluster analysis was carried out in order to segment the ageing consumers based on their choice orientation. For this purpose, the factor scores from the factor analysis were used. After testing the different number of clusters (2–8), six shopper segments were derived by non-hierarchical k-means cluster analysis. One respondent was removed from the analysis because she formed her own cluster irrespective of the number of clusters used. Demographic measures were used to deepen the picture of the shopper types. Demographic variables included sex and age of the respondent, whether the respondent was retired, household size, income, education, number of cars in the household and the use of car for shopping (Table 2). The first consumer segment was named as convenience oriented service seekers (Fig. 1). This was the oldest and smallest group, 12% of the respondents belonged to this segment and 55% of them were retired. The income level was rather low. They valued customer service higher than average respondents, but quality and selection was less important to them. Recreational aspects of shopping were of least importance to this group but they did appreciate pleasant and interesting shopping environments. Good parking facilities (including free parking) were also important although these shoppers were not especially price conscious. A rather similar but less mobile group - often called ‘‘service shoppers’’ - have been found in several earlier studies (see e.g. Lesser and Hughes, 1986; Boedeker and Marjanen, 1993). The second segment was called atmosphere oriented quality seekers. Almost 17% of the ageing respondents belonged to this group. They preferred quality and selection over low prices and convenience. Customer service and pleasant shopping
atmosphere were also important. In this group both income and education level were clearly the highest. Also the number of cars per household was very high (1.4) and the car was used for shopping more often than in other groups. A very similar group called ‘‘individualistic quality seekers’’ was for the first time found by Marjanen et al. in 2005. The third and largest segment (19.8%) was called traditional shoppers because they appreciated all ‘‘conventional’’ aspects of purpose oriented shopping - quality, selection, price and customer service-whereas the recreational aspects of the shopping were less important. The average age of this group was rather young (63.2 years) and a majority (63%) of the respondents belonging to this group was still working outside home. Respectively, the income level was the second highest. A very similar group has been found in earlier studies (see e.g. Lesser and Hughes, 1986; Boedeker and Marjanen, 1993). However, Marjanen et al. (2005) found this segment had become older in 10 years. The fourth shopper type was called convenience seekers. Over 17% of the respondents belonged to this group. Their demographic profile was rather similar to that of traditional shoppers but the choice orientation profiles were not, the most striking difference being that traditional shoppers appreciated customer service much more than the shopping atmosphere, while convenience seekers behaved just in the opposite way. Convenience seekers were also less interested in prices than traditional shoppers. The fifth segment was called price conscious public transport users. Approximately 16% of the respondents belonged to this group. This was the most price conscious group with the lowest average income level despite the high education level. The group mainly consisted of female respondents in smaller than average households. Only 26% of the households had a car, and, consequently, the car was used hardly ever for shopping. Price, convenience and public services were important for this group. A rather similar segment was found by Lesser and Hughes (1986); in their study the price oriented shopper segment included relatively many older consumers. The sixth and the second largest group in this study (18% of the respondents) was called recreational shoppers. A similar group has been found in many earlier studies - sometimes called ‘‘the new type shoppers’’ or ‘‘experimental shoppers’’ (Westbrook and Black, 1985; Jarrat, 1996; Marjanen et al., 2005) - where it has often been characterized by a high amount of families with children. The recreational aspects of shopping were clearly most important for this group of shoppers; it was the only segment where the factor
Table 2 Demographic profiles of shopper segments. Convenience oriented service seekers (12%) n 196 Sex (female) % 59 Age (mean) years 64.5 Retired % 55 Household size (mean) 1.9 Income quartile 2 900 h per month 24 4 400 h 32 6 500 h 20 Over 6 500 h 24 a Education (mean/mode) 4.1/6 Cars in household (mean) 1.2 b Use of car for shopping (mean/mode) On weekdays 2.3/1 At weekends 2.3/1 a b
Atmosphere oriented quality seekers (16.6%)
Traditional shoppers (19.8%)
Convenience seekers (17.2%)
Price conscious public transport users (16.4%)
Recreational shoppers (18.1%)
270 61 63.1 41 1.9
322 62 63.2 37 2
280 63 62.7 38 2
268 75 63.7 46 1.6
295 60 64.1 47 1.9
11 23 33 33 4.6/6 1.4
19 21 29 31 4.3/6 1.3
23 23 28 26 4.1/6 1.2
47 23 19 11 4.6/6 0.8
27 30 26 17 3.6/3 1.3
1.9/1 1.8/1
2.1/1 1.9/1
2.1/1 1.9/1
4.4/5 4.1/5
2.3/1 2.2/1
Education: primary school ¼ 1; secondary school ¼2; vocational school ¼3; high school ¼ 4; college ¼5; university level ¼6. Use of car for shopping: always ¼ 1; often¼ 2, sometimes¼ 3; seldom¼ 4; hardly ever ¼ 5.
A.-M. Kohijoki, H. Marjanen / Journal of Retailing and Consumer Services 20 (2013) 165–172
traditional shoppers
atmosphere oriented quality seekers
convenience oriented service seekers
convenience seekers
1.5
1.5
1.5
1.5
1
1
1
1
0.5
0.5
0.5
0.5
0
0
0
0
-0.5
-0.5
-0.5
-0.5
-1
-1
-1
-1
-1.5
-1.5
-1.5
-1.5
-2 F1 F2 F3 F4 F5 F6 F7
-2 F1 F2 F3 F4 F5 F6 F7
169
-2 F1 F2 F3 F4 F5 F6 F7
-2 F1 F2 F3 F4 F5 F6 F7
recreational shoppers
price conscious public transport users 1.5
1.5
F1 recreation 1
1
0.5
0.5
0
0
-0.5
-0.5
-1
-1
-1.5
-1.5
F2 quality and selection F3 car-based convenience F4 price consciousness F5 location-based convenience F6 shopping atmosphere F7 customer service
-2 F1 F2 F3 F4 F5 F6 F7
-2 F1 F2 F3 F4 F5 F6 F7
55+
18-54
Fig. 1. Choice orientation profiles of shopper types; 55þ and 18–54 years old respondents.
recreation had higher than average value. However, all the other factors had higher than average values too, indicating that these shoppers are rather demanding regarding every aspect of the shopping experience. This was the second oldest group, 47% of the respondents being retired. In line with earlier studies, they had rather low income and the lowest education level.
Convenience seekers were less interested in personal service whereas price was more important to them. They were least interested in organic and locally produced food. They were also most keen on their old habits. Price conscious public transport users were least mobile and least consumption oriented. Convenience oriented service seekers preferred quality over price but they were not willing to travel a lot because of shopping and they found the shopping centers slightly less attractive than the other groups.
7. Psychographic characteristics of the ageing consumer segments 8. Ageing vs. young and middle-aged shoppers The psychographic characteristics were measured by statements describing the respondents’ shopping and consumption related lifestyle aspects (Fig. 2). Psychographic profiles of the ageing shopper types were well in line with the dominating characteristics of their respective choice orientation types. Recreational shoppers found product demonstrations more interesting than the others and they were also most interested in advertisements and commercials. Atmosphere oriented quality seekers preferred quality and selection over price and convenient location. They also preferred organic and locally produced products and they did not mind traveling a bit further if the store was worth it. Traditional shoppers were rather ‘‘average’’ according to their statements except that they appreciated personal service and the country of the products they bought very high.
In order to find out whether the shopping orientations of ageing consumers were different to those of younger, choice orientation factors and choice orientation segments were also created using the under 55 year old sample. The analyses yielded almost identical factor dimensions (Appendix 1) and shopper segments (Fig. 1). Although some minor differences did emerge, the overall interpretation of the factors remained the same irrespective of whether criteria were added to or removed from them. The same factor names could be used because all the criteria which loaded on different factors in each sample had rather low meanings in both age groups (from 0.33 to 0.62). The only exception was the criterion ‘‘convenient shopping hours’’ which loaded highest
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1
2
3
5
4
I always stop to watch product demonstrations I quite often buy things on impulse I try to avoid noisy and busy places I keep up with the times and dress accordingly I appreciate personal service E-retailing is a competitive choice for me I wouldn't go to stores at all if I didn't have to Special stores should be open on Sundays I compare prices before I buy anything I prefer quality over price Well known brands guarantee high quality I prefer low prices over service I prefer convenient location to wide selection I prefer convenient location to low prices I prefer selection over price I don't mind to travel if the store is worth it Ads and commercials affect on my choices I prefer shopping centres over free standing stores I prefer environmentally friendly products The country of origin is not important to me I prefer organic products even if more expensive I’m a do it yourself type of person I usually prefer local produced food I rather stick to my old habits People buy too many unnecessary things nowadays My daily schedule is usually rather leisured I always seek new ideas and experiences convenience oriented service seekers
convenience seekers
atmosphere oriented quality seekers
price conscious public transport users
traditional shoppers
recreational shoppers
Fig. 2. Statements concerning shopping and consumption related lifestyle aspects. (1¼ totally disagree, 2¼ quite a lot disagree, 3 ¼partially disagree, 4¼ quite a lot agree, 5¼ totally agree).
(0.52) on the factor car-based convenience in the ageing sample, but on the factor location-based convenience (0.70) in the younger sample. Both factors, however, dealt with convenience. In absolute terms the ratings of the younger sample were higher for wide and versatile selection while the ageing sample put more weight on high quality products, skilled personnel and personal service. Good location, parking facilities and free parking were more important for the ageing sample while the younger ones were more interested in cafes and restaurants together with entertainment services. The older sample was also more priceconscious and willing to use their loyalty cards. Cluster analysis conducted using the under 55 year-old sample yielded six shopper segments which were rather similar to those found using the ageing sample (Fig. 1). Two of the groups—atmosphere oriented quality seekers and recreational shoppers–were almost identical in both samples. Also the shape of the profiles of the price conscious public transport users in both samples was rather similar. Although the profile of the convenience seekers in the younger sample was somewhat different to that of the ageing sample, the name of the group remained to be very illustrative. The interpretation of the findings was more complicated concerning segments convenience oriented service seekers and traditional shoppers, the more illustrative name for the first group in the younger sample maybe being inactive shoppers and quality oriented service seekers in the latter. In the seven-cluster solution inactive shoppers were found also in the older sample but this solution resulted in two pairs of very similar groups and was therefore rejected.
65-75
convenience oriented service seekers atmosphere oriented quality seekers
55-64
traditional shoppers
45-54
convenience seekers
35-44
price conscious public transport users recreational shoppers
18-34 0%
20 % 40 % 60 % 80 % 100 % Fig. 3. Shopper segments by age cohorts.
The consumer segments were analyzed also using age cohorts of 18–34, 35–44, 45–54, 55–64 and 65–75 years old (Fig. 3). Although the shopper types were rather evenly represented in all age cohorts, some differences did occur. Interestingly, the age cohort of 45–54 formed a mirror image between the two oldest and the two youngest cohorts. For example, the amount of convenience seekers was the highest among age cohort of 45–54, presumably indicating that this was the most time-pressured group. The share of convenience seekers decreased rather identically when age cohorts got older and younger. Vice versa, the number of convenience oriented service seekers and price conscious public transport users was the lowest in the age cohort of 45–54 but the number increased the older/ the younger the age
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cohorts were. The amount of atmosphere oriented quality seekers and traditional shoppers were rather similar in all age cohorts. However, in the age cohort 55–64 the share of these shoppers were slightly higher whereas the number of recreational shoppers was the smallest.
9. Conclusions In the Western societies ageing consumers will be the dominant consumer segment and a new and challenging business opportunity for retailers in the near future. However, in retailing the stereotypical image of older consumers still prevails although in order to target older consumers, the retailers should be more aware of the needs, wants and capabilities of their ageing clientele. The analyses conducted in the current study clearly indicate that the ageing consumers are not a homogeneous consumer group according to their shopping orientations although the psychographic profiles of different choice orientation types are rather similar. Six different and reasonable sized choice orientation types were found: convenience oriented service seekers (12%), atmosphere oriented quality seekers (17%), traditional shoppers (20%), convenience seekers (17%), price conscious public transport users (16%), and recreational shoppers (18%). Almost similar shopper types were found when respective analyses were conducted using the under 55 years old sample. No such group as ‘‘apathetic’’ or ‘‘inactive’’ shoppers was found among the ageing shoppers although it has emerged in most previous studies, including those conducted in Turku area. However, when using the under 55 years sample, such group did emerge (here named convenience oriented service seekers on the bases of the factor scores in the 55þ sample). The absence of the apathetic/inactive shoppers may be at least partly due to the low response rate (compared to our earlier studies), probably indicating that those who had a more positive attitude towards shopping were also more prone to respond. Also the high education level of especially the ageing respondents
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may have had an effect because apathetic/inactive shoppers have been found to have a rather low education level. Rather interesting findings came out when the shopper types were separated into five age cohorts (18–34, 35–44, 45–54, 55–64 and 65–75). According to the choice orientation, the oldest age cohorts were rather similar to the youngest cohorts. This means that both young and aged consumers appreciated similar store attributes when choosing the destination for non-food shopping. However, it does not mean that they do their shopping at the same stores or buy similar products. This phenomenon needs further analysis but according to the current study, there are socio-economic factors behind the similarities such as relatively low income level and the low number of cars in the households. For example, the number of price conscious public transport users was the highest among the youngest and the oldest age group. The study confirms the predictions that the baby-boomer generation will continue to balance work, family and play even when ageing, seek quality and personal service, increasingly seek comfort and convenience and show a growing interest in buying experiences (see e.g. Dychtwald and Gable, 1990), all this implying that they are more demanding consumers than previous generations. From the retailers’ point of view the main concern is to separate consumers according to their preferences of store characteristics and then profile the store to the targeted groups. The study indicates, however, that although the chronological age and consumer’s stage at the family life cycle do have an impact on certain needs and habits, they are not alone neither sufficient nor adequate criteria for efficient market segmentation in retailing.
Appendix A1 See Appendix Table A1.
Table A1 Choice orientation factors extracted from 27 store-choice variables for the 18–54 years old respondents. In addition to factor loadings and per cent of variance explained by each factor, also the absolute rankings for each item are presented in the table. Numbers of the factors 2 and 3 have been changed to match the factor numbers that emerged in the ageing sample. Factors
Variables
Ranking (mean)
Factor loading
Percent of variance
Factor 1 recreation
Entertainment services (e.g. cinema) Wellness services (e.g. dayspa, hair salon) Public services (e.g. library, tax office) Good cafe and restaurant facilities Reasonably priced restaurant services I can pay with preferred credit card Good parking facilities Free parking Convenient for shopping with the family (convenient access by public transportation Many good special stores Choice of products unavailable elsewhere Wide selection High class products Low price level Competitive special offers Possibility to use loyalty card Easy to move around in the area Good location Convenient shopping hours I can get all I need at the same place Interesting place to shop Pleasant shopping surroundings Other customers Popular place to shop Skilled personnel Good customer service
1.8 1.6 2.1 2.9 2.7 3.0 3.3 3.2 2.8 3.2 3.9 3.9 4.2 4.0 3.5 3.4 3.2 3.8 4.0 4.0 3.4 3.4 3.5 2.1 2.1 3.6 3.7
0.82 0.79 0.62 0.60 0.56 0.33 0.85 0.85 0.37 0.76) 0.83 0.78 0.74 0.63 0.90 0.89 0.47 0.74 0.72 0.70 0.57 0.80 0.76 0.58 0.57 0.83 0.83 Total:
11.5
Factor 2 car-based convenience
Factor 3 quality and selection
Factor 4 price consciousness
Factor 5 location-based convenience
Factor 6 shopping atmosphere
Factor 7 customer service
9.4
9.3
9.3
9.2
9.1
7.6 65.4
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