Baby Boomers and Millennial/Gen Zers are quite different when it comes to cross border shopping. Tommy Kelly, CEO of eShopWorld(ESW) discusses the differences for companies planning global initiatives.
International online or cross border shopping sales transacted through ESW rose by 82% year-on-year (YOY) across 2020. Already accelerating fast before the pandemic, ESW data shows an even more rapid uptick of 100% from April onwards, peaking at 141% in July.
Taking full advantage of this rise in demand, which shows no signs of slowing even as stores start to reopen, depends on being able to serve each demographic in the right way.
ESW’s own research in Global Voices 2021: Cross-Border Insights covered 22,000 consumers in 11 countries and found that 68% of shoppers made ecommerce purchases outside of their home country in 2020.
We also looked at consumers’ cross-border buying habits and expectations across demographics and generational makeup.
So-called digital natives, who are most comfortable shopping outside their home countries, are largely consumers 25-34 years-old, spanning two generations: younger Millennials and older Gen Zers.
They are attractive because they are digitally savvy and they have spending power. For instance, these shoppers were the most likely to have made 11 or more cross-border commerce purchases in the past year (33%), compared to those aged 35-44 (32%) and 18-24 (29%).
Of those purchases, categories including clothing (30%), toys (19%), and health & beauty (19%) were the most popular. Collectively, Gen Zers and Millennials bought cross-border in all categories, including cosmetics, fragrance, luxury, and skincare, at a rate three times that of Boomers.
Among the digital natives, the US ranked as one of the most-shopped countries overall, with 55% of respondents saying they made cross-border purchases from US-based brands and sites.
Millennials make up most of the cross-border market overall and have the distinction of being the highest spenders, with 47% having spent more than $500 on cross-border ecommerce purchases in the past year, followed by 27% of Gen Xers and 15% of Gen Zers.
Gen Z should not be ignored though. They are comfortable spending money and already possess spending power of $44 billion per year in the US alone. Our study found they are most likely to buy directly from brands instead of marketplaces or a combination of the two. Nearly 30% of Gen Zers who shopped cross-border shopped directly from brands, versus 23% of Millennials and 23% of Gen Xers.
This presents a significant opportunity for brands looking to capitalise on the growing Gen Z consumer base, which already makes up about 25% of the cross-border market in Chile, Mexico, and Turkey.
It's not just what they buy, but how that distinguishes younger shoppers. While Boomers and Gen Xers are most comfortable with credit card and PayPal payments, younger shoppers are increasingly gravitating toward global payment systems and Buy Now, Pay Later options. This signals the emerging importance for retailers to offer a range of payment options. That said, concerns around shipping costs and times are cited as the most significant barriers to purchase across all age groups.
Baby Boomers (aged 57-75) are buying more than ever cross border and still have the highest spending power in the US at $548.1bn a year. However, they display quite different behaviours in several key areas.
Boomers seek a more traditional cross-border online shopping experience and prefer fundamental best practices like the use of local language and currency and clear refund policies.
43% said they prefer websites to present information in their local language (versus 31% of shoppers 40 and under), 39% expect prices in their local currency, and 29% prefer a clearly stated refund policy when shopping cross-border. They are also most comfortable paying by credit or debit card, with 65% using credit cards, compared to only 3% who have used Buy Now, Pay Later options.
When it comes to motivators and closing a sale, Boomers prioritise lower costs over their satisfaction with a previous online experience. 42% cited cost as a primary factor compared to just 32% of those in the younger cohorts. They seek out sites with more variety but are half as likely as younger shoppers to be swayed by referrals or positive reviews (9% versus 18%).
Like other cohorts, clothing is the most popular category, with 72% purchasing clothes from an international site in the previous six months. More than half the Boomers also made health & beauty and skincare product purchases internationally but lagged younger consumers in other categories, preferring to make those purchases in their home country.
In conclusion, it is important to remember that Millennials and Gen Z represent the highest value segments for most retailers and brands when it comes to cross-border ecommerce. Smart brands will prioritise Millennials' engagement and keep a close watch on Gen Z as they establish more buying power and influence in the global market.