Retail Strategy

Look around your community, and you’ll likely spot a discount store like Dollar Tree, Dollar General, or Family Dollar. Once catering primarily to lower-income families, these stores now attract a much broader demographic, including middle-class and even affluent shoppers looking for ways to combat rising prices. As inflation reshapes consumer behavior, dollar stores have become formidable competitors in the retail space.

But while discount chains thrive, the success of the dollar store is no longer guaranteed. Expansion alone isn’t a strategy, and retailers that fail to adapt to changing definitions of value risk being left behind.

Higher Earners Are Trading Down—Retailers Need to Take Notice

Traditionally, the core customer base for dollar stores had a median income of $30,000-$60,000, according to research published in Retail TouchPoints. Today, that demographic is shifting.

Dollar Tree executives reported in a Q1 2024 earnings call that their fastest-growing customer base earns more than $125,000 a year. The reason? Rising interest rates and inflationary pressures have forced consumers across income levels to rethink how and where they shop.

Retailers beyond the discount sector need to take note: price sensitivity is no longer just a low-income concern. This means premium and mid-tier brands must reexamine their value propositions. Are you offering products that feel like a good deal? If not, consumers are increasingly willing to shop elsewhere—even if “elsewhere” is a dollar store.

Dollar General’s Winning Playbook vs. Family Dollar’s Expansion Mistake

Dollar General had ambitious plans to open 800 new stores and remodel 1,500 existing locations in 2024, continuing its aggressive push into rural communities. The company’s success is built on a clear strategy: providing essential goods, adding fresh food options, and maintaining operational efficiency.

In contrast, Family Dollar—purchased by Dollar Tree in 2015—planned to close 600 underperforming locations in 2024 alone, with hundreds more closures planned as leases expire. The reasons? Poor locations, misalignment with the Dollar Tree model, and operational challenges, including a $40 million fine for a rat-infested warehouse in 2022.

The lesson for all retailers: Expansion without differentiation is a losing game. Growth needs to be strategic, customer-focused, and operationally sound. Are you scaling smartly, or are you chasing market share without a sustainable plan?

Shrinkflation: A Dangerous Game That Could Backfire

Dollar stores have become prime examples of shrinkflation—where products remain the same price but contain less product. While this strategy has helped Dollar General and Dollar Tree maintain profit margins of 31.5% in 2023 (significantly higher than Walmart’s and Kroger’s), it comes at a cost: consumer trust.

The question retailers must ask is: Is the short-term boost worth the long-term brand damage? Some retailers have an opportunity to take a stand against shrinkflation by offering clear, transparent pricing and “no-shrink” product lines. Brands that do so could earn lasting consumer loyalty at a time when trust in pricing is eroding.

What Retail Leaders Should Do Next

The evolution of dollar stores isn’t just their story; it’s a signal for the entire retail industry. Here’s what C-suite executives should focus on:

1. Redefine Value Beyond Just Price – Consumers don’t just want cheap; they want affordability plus convenience, accessibility, and perceived savings. How does your brand deliver that?
2. Be Strategic About Growth – Expansion for the sake of expansion leads to failure. Family Dollar proves that. Invest in location strategy, customer insights, and operational efficiency.
3. Decide Where You Stand on Shrinkflation – Will you join the race to shrink products, or will you differentiate by prioritizing consumer trust and transparent pricing?
4. Prepare for Even More Trade-Down Behavior – The next wave of shoppers trading down may not be who you expect. How are you adapting to serve higher-income customers looking for savings?

Adapt or Risk Irrelevance

The rise (and struggles) of dollar stores offers critical lessons for all retailers. Consumers are rewriting the rules of value, and retailers that don’t evolve will be left behind. Whether you operate in discount, mid-tier, or even premium retail, the question remains: Are you meeting the new expectations of value-conscious shoppers, or are you hoping they’ll return to old habits?

The future of retail won’t be defined by who offers the cheapest price—but by who understands and delivers on the new definition of value.

Some of you might remember the infomercial era—those late-night product pitches that caught sleepless viewers at their most vulnerable, selling everything from kitchen gadgets to miracle cures. Fast forward to today, and the concept of shoppable content has taken that idea and given it a digital-age makeover. Instead of drawn-out monologues, you now have instant, interactive shopping at your fingertips on platforms like Instagram, TikTok, and YouTube. With just a click or a swipe, you can buy what catches your eye in a seamless blend of entertainment and commerce. Whether it’s a livestream shopping event or a shoppable video from your favorite influencer, today’s shopping experience is all about engaging audiences in real-time, on their own terms.

For consumers, it’s all about convenience and immediacy; for brands, it’s an opportunity to engage audiences in more personalized and creative ways. Shoppable content is revolutionizing the retail landscape, making shopping more immersive, interactive, and enjoyable than ever before.

Why Shoppable Content?

More than a driver of immediate sales, shoppable content plays a crucial role in fostering long-term brand loyalty for businesses. By making products instantly accessible at the point of inspiration, your customers are more engaged and satisfied. That builds a deeper connection between brands and their audiences.

This strategy fits perfectly within a broader omnichannel approach, where digital transformation and customer experience management are keys to staying competitive. Shoppable content stands out as a pivotal element in creating a cohesive and personalized shopping journey. The goal is to ensure that every interaction with the customer is an opportunity to reinforce brand affinity and drive future sales.

The Competitive Advantage

By integrating shoppable elements into social media posts, videos, and even live streams, brands capture attention and convert engagement into sales in real time.

Beauty brand Sephora has successfully integrated shoppable Instagram posts into its marketing strategy, allowing users to purchase products directly from their feed. It’s an example of mastering social commerce to increase conversion rates and build stronger customer loyalty.

It’s worked. Digital storefronts have allowed Sephora’s 20 million social media followers to browse and buy products directly in the Instagram app. In August 2024, Instagram users in the United States spent an average of 33.1 minutes per day using the app. This half hour offers a prime opportunity for brands like Sephora to catch potential customers, as each minute spent on the app increases the likelihood of turning casual browsing into purchasing decisions.

This strategy was heavily influenced by the success of Sephora China’s partners, who served as a roadmap for enhancing the consumer experience in U.S. stores, according to Carolyn Bojanowski, Sephora’s general manager of e-commerce, in a Quartz news article. China’s social-commerce market exceeds $300 billion in annual sales.

L’Oréal introduced livestream shopping into its marketing strategy and quickly found success. The cosmetics company offers livestream makeup tutorials on YouTube and Instagram. Customers can meet with senior makeup and skincare experts who advise them on how to create popular looks using L’Oréal products.

During the livestream, the company creates excitement with calls to action like “click link for a 20% discount.” L’Oréal has held more than 50 livestream shopping experiences across five countries. At the same time, the company has seen a 150% increase in virtual try-ons through augmented reality (AR) immersion.

AI and Shoppable Content

As the digital shopping landscape evolves, shoppable content continues to grow, with sales through social platforms projected to reach  $82 billion in the United States by 2026.

Artificial intelligence is a major driver of this growth, enhancing the consumer experience through innovations like AI-powered shopping ads, virtual try-ons, and 3D product views. These technologies not only boost engagement and click-through rates but also provide a more personalized and immersive shopping journey, making it easier for consumers to interact with and purchase products directly within content.

Live shopping events are also gaining traction, where brands host live streams featuring product demonstrations, exclusive deals, and direct links to purchase items in real-time. These events are often powered by AI to optimize timing, content, and audience targeting, ensuring that the right products are showcased to the right customers.

AI algorithms also collect and process data from livestreams. This data often includes viewer comments, reactions and even purchasing patterns. Creating a personalized shopping experience then becomes easier and allows businesses to improve their customers’ overall satisfaction.

AI can even provide real-time language translation, allowing businesses to expand their markets, as well as enhance livestream shopping through image recognition capabilities.

Determining the ROI of Shoppable Content

1. Sales Conversion Rates: One of the most direct indicators of ROI is the sales conversion rate, which measures the percentage of users who make a purchase after interacting with shoppable content. By tracking how many clicks on shoppable links result in actual sales, brands can gauge the immediate financial impact of their content.
2. Customer Lifetime Value (CLV): Beyond immediate sales, it’s important to consider the long-term value of customers acquired through shoppable content. CLV helps brands understand how much revenue a customer will generate over their entire relationship with the brand. If shoppable content consistently attracts high-CLV customers, its ROI is likely higher than campaigns that only drive one-time purchases.

3. Engagement Metrics: ROI isn’t just about direct sales. Engagement metrics such as click-through rates (CTR), time spent on content, and social shares can also provide insight into how well shoppable content resonates with the audience. High engagement often leads to stronger brand loyalty, which can translate into long-term financial returns.

4. Attribution Modeling: To get a comprehensive view of shoppable content’s ROI, brands should use attribution modeling. This method tracks how different touchpoints—such as social media posts, email campaigns, or product pages—contribute to a sale. By understanding the role that shoppable content plays in the overall customer journey, brands can more accurately allocate credit and resources.

5. A/B Testing: Conducting A/B tests allows brands to compare different versions of shoppable content to see which performs better. By experimenting with various elements—such as product placement, call-to-action buttons, or content format—brands can identify what drives the highest ROI and refine their strategies accordingly.

By leveraging these metrics and analytical tools, brands can determine a more accurate ROI of their shoppable content, allowing them to make data-driven decisions that enhance their marketing effectiveness and drive sustained growth.

Brands Getting It Right

Away is a travel brand that leverages social media and user generated content to reach consumers and not just sell products but build their brand around a cult of personality that truly engages, entertains, and attracts consumers.

ASOS leverages both shoppable content on Instagram and Snapchat, as well as user-generated content and encourages consumers to post their own photos with the hashtag #AsSeenOnMe.

With nearly 40 million followers on Instagram, H&M has transformed their Instagram page into a shoppable platform by tagging items and providing convenient purchase links.

Net-a-Porter is considered one of the most successful social commerce shopping successes. They give users insight and entertainment through well-written articles that contain links to products, like this interview with Gracie Abrams that includes photos with get-the-look links.

The Shoppable Content Outlook

The future of shoppable content is promising, with projections indicating that social commerce sales could reach $1.2 trillion globally by 2025. As consumers increasingly prefer to discover and purchase products directly through social media, retailers have a significant opportunity to meet their customers where they are, particularly as Gen Z leads this shift. However, success in shoppable content requires careful execution—common mistakes such as poor user experience, broken links, low-quality visuals, and ineffective influencer partnerships can deter potential buyers. To fully capitalize on this trend, retailers must prioritize seamless integration and continuously optimize their content strategies.

Imagine stepping into a vibrant urban oasis where every convenience is at your doorstep and the pulse of the city is right outside your window. This is the promise of North Loop Green in Minneapolis, a visionary mixed use development that is redefining the future of retail and urban living. With its seamless integration of homes, short-term rentals, shops, offices, restaurants, and event and green spaces, North Loop Green transformed blighted city blocks into a dynamic, sustainable community.

Mixed-use developments like North Loop Green offer incredible opportunities for retailers. Not only can these developments bring vibrance to communities and neighborhoods, but public parks, event space, and restaurants mean steady foot traffic and a constant influx of new consumers. These dynamic environments foster community engagement, sustainability, and economic resilience, positioning retailers for long-term success and innovation.

Why Mixed Use Makes Sense For Residents

Skyrocketing housing prices continue to impact renters and homeowners even as the macroeconomic outlook continues to improve. This is driving people to seek alternative living spaces that are more economical—and mixed-use buildings make sense. The World Health Organization reports that 70% of the global population will live in cities by 2050, and as dramatic urbanization continues, mixed-use projects are likely to dominate new real estate construction, according to Northspyre:

Nearly 80% of U.S. adults said they would consider a residence in a live-work-shop-play community that offered entertainment, dining, work, and recreation opportunities—and the number of apartments completed annually in “live-work-play” developments quadrupled between 2012 and 2021, rising from 10,000 to 43,700, according to a study from the International Council of Shopping Centers (ICSC).

Mixed-use retail is only growing, and savvy retailers are betting on it for their own growth. Demand for retail locations in mixed-use developments is substantial, with more than 60% of retailers expressing a preference for these environments, according to CBRE. That’s why mixed-use retail spaces offer higher occupancy rates, often between 90-95%, compared to 80-85% for standalone retail properties.

Retail spaces in mixed-use developments also command premium rents, typically 10-20% higher than traditional shopping centers, as noted by ICSC. This willingness to pay higher rents is justified by the built-in customer base and vibrant atmosphere provided by the diverse mix of residential, office, and commercial components within mixed-use developments. Sure, rent is on the pricey end, but a study by the Urban Land Institute (ULI) determined that consumers are willing to spend up to 15% more in mixed-use developments compared to traditional retail environments due to the convenience and enhanced shopping experience.

Foot traffic in mixed-use developments is 20-30% higher than in traditional retail locations, as reported by JLL. This increased traffic correlates with longer dwell times, which are 30-40% higher, and improved customer retention rates, up to 20% greater, according to the ULI data. These factors contribute to robust sales growth for retailers, with an average annual sales growth of 5-10%, significantly outpacing the 2-5% growth seen in standalone locations.

Developments Embracing the Live-Work-Play Lifestyle

Hudson Yards (NYC) – Hudson Yards is “the largest private real estate development in the history of the United States and the largest development in New York City since Rockefeller Center.” The site will include more than 18 million square feet of commercial and residential space, more than 100 shops, a collection of restaurants, approximately 4,000 residences, The Shed, New York’s first arts center to commission new work across the performing arts, visual arts, and popular culture, 14 acres of public open space, a 750-seat public school and an Equinox Hotel® with more than 200 rooms.

King’s Crossing (London) – King’s Crossing “is the largest mixed-use development to be masterminded in London for over 150-years – an adventurous, dynamic, creatively driven collective in a brand-new postcode, N1C. It’s also the city’s best-connected transport hub, drawing shoppers from across London and all over the UK to visit every day.”

The Center for Potsdamer Platz (Berlin) – The Center for Potsdamer Platz is a 1.2 million square foot mixed-use complex with 67 residential units, almost a million square feet of office space, and over 200,000 square feet of retail. “Additional renewal plans have been made for an immersive entertainment experience, expanded retail, globalized culinary offerings with sustainability programming, and the addition of new fitness and lifestyle amenities. This includes a partnership with Nike, activating part of the public realm.”

A Bright Future for the Mixed-Use Development

Mixed-use developments are not without some controversy. We know that gentrification can stem from urban renewal projects that include mixed-use spaces like these. Developers and communities are learning from the lessons of past developments. In East Austin, Tex., a mixed-use development will include affordable housing units, to ensure the long-term residents won’t be priced out.

Nevertheless, demand for mixed-use developments is expected to surge, driven by a renewed desire to engage locally and support neighborhood businesses. These live-work-play environments attract diverse business tenants and residents by integrating safety, wellness, commerce, and connectivity into their design. With the right retail mix, such developments can see up to a 25% increase in rent and property values, according to Green Street Advisors. This is particularly significant as middle-market retail centers, which have traditionally been less innovative, are now transforming to meet the evolving needs of urban living. It will be interesting to see how retail brands evolve their experience to take advantage of the unique community bubbles mixed-use spaces create.

Dubbed “Test City, USA,” our hometown of Columbus, Ohio is a mecca for start-ups and product testing. The demographics here mirror the larger United States, in a nice mid-sized, Midwestern package.

In the northeast quadrant of the city is Easton Town Center, a pioneer in mall design. Since opening in 1999, it has tested the possibilities for open-air retail that includes high-end retailers, department stores, brick-and-mortar direct-to-consumer stores, restaurants, entertainment venues, and more.

Today it continues to innovate with EastonLABS, a 500-square foot retail space that retailers can rent to test new products. The mall has since added Restau/Lab to give restaurants the same opportunity.

Flagship stores also are transforming into dynamic community spaces—hubs of creativity, collaboration, and community engagement. These “open HQs” allow brands to integrate consumer input directly into the design and development process and foster positive customer experiences at the same time.

Companies like HP, Starbucks, Ikea, Sephora, and even Major League Soccer have all launched innovation labs and Open HQs to explore new business models, enhance customer experiences and stay competitive.

Yet the vast majority of innovation labs – a whopping 90% according to one industry report – fail or eventually close, falling short of the success they hoped to accomplish.

Here is what retailers who want to stay ahead of the curve and meet consumer demand for a better experience should know about exploring innovation models and avoiding potential pitfalls.

Engaging the Customer in Innovation

Consumer demand for personalization has only been growing, with 71% expecting businesses to get to know their individual interests. Furthermore, 80% of customers agree that the customer experience is just as important as products and services. Open HQs and creative hubs allow retailers to integrate consumer feedback directly into their processes, fostering a sense of community, and improving customer insights. Retailers are hoping to create a new breed of consumers who are emotionally invested in the brand. And with a staggering 72% of total U.S. retail sales projected to (still) happen in physical stores by 2028, the open HQ model offers customers a place to connect personally, even one-on-one with the brand.

An Evolving, But Not-New Concept

The Genius Bar, where customers receive tech support directly from experts, epitomizes the brand’s commitment to customer engagement and service.

Apple Senior VP of Retail Angela Ahrendts explained that she wanted Apple stores to be a town square, “where the best of Apple comes together and everyone is welcome.”

Several retailers in the United States have introduced an Open HQ model, including Nike’s House of Innovation in New York City. Nike offers personalized experiences where shoppers can test products, provide feedback, and even see prototypes in development. This interactive environment not only enhances the shopping experience, but also allows Nike to gather valuable consumer insights.

Nordstrom’s Innovation Lab has continually learned from trial and error how to refine the lab process and continues to lean in to new technologies that allow customers to personalize products and experience seamless online-to-store integration. Their commitment to experimentation and customer-centric solutions sets them apart.

Walmart’s Intelligent Retail Lab (IRL) is focused on customer experience and efficiency. Residing in a 50,000-square-foot Neighborhood Market store in Long Island, the lab uses thousands of cameras on the ceiling and sensors embedded in shelves to monitor the store in real-time to improve efficiency, keep costs down, and enhance the shopping experience for customers. The cameras can even detect the ripeness of produce based on color alone and alert workers when restocking is needed.

In London, the Samsung KX space in King’s Cross is a striking example of a tech brand embracing the Open HQ model. The venue features a range of experiences, from product demonstrations to workshops and events. Visitors can interact with Samsung products in a relaxed, communal environment, providing feedback directly to designers and developers.

Challenges in Innovation

While the Open HQ and Innovative model offers numerous benefits, it also presents significant challenges. Although many companies have announced new labs, just as many have announced closures.

Earlier this year, Walmart announced the closure of its Store No. 8 innovation hub to cut costs. The retail giant cited the lack of the need for the hub as the reason behind the closure since many of the interactive technology features it was testing are now integrated into several stores.

Ikea’s Space10 lab also shut down last fall after the cofounders stated they had reached all the objectives they had set for the lab. One of the lab’s developments in the decade that it was open was the creation of an augmented reality app that allowed consumers to use their phones to see what a furniture piece would look like in their living spaces.

The very way Open HQs and innovation labs are designed lends itself to challenges. Because innovation is continually evolving, labs will inevitably date themselves and risk becoming obsolete. Because of the costs associated with running Open HQs and innovation labs, retailers may close them more quickly if they fail to produce immediate and tangible results. Look no further than the rule of products. For every one that succeeds, another 10 or more will fail. Retailers must balance the cost of such initiatives with the potential return on investment.

To overcome these challenges, retailers need to adopt a flexible approach. Partnerships with local businesses and community groups can help offset costs and enhance the value of the space. For example, hosting events or workshops in collaboration with local artists or entrepreneurs can attract a diverse range of visitors and foster a sense of community.

The Road Ahead

As retailers continue to experiment with the Open HQ model, the key to success will be adaptability and a genuine commitment to customer engagement. By actively listening to shopper input and incorporating it into their design and development processes, retailers can create a dynamic and personalized shopping environment. This not only enhances the customer experience but also fosters a sense of loyalty and brand advocacy, as customers feel their voices are heard and valued.

The future of retail lies in creating spaces that are not just about selling products, but about building relationships and fostering creativity. Retailers have the opportunity to transform their stores into vibrant community hubs where ideas can flourish, and feedback is actively sought and appreciated. These spaces can host events, workshops, and collaborative projects that engage customers on a deeper level, making the overall experience more meaningful and interactive.

By prioritizing adaptability, embracing innovation, and valuing customer input, retailers can set new standards for what it means to create a truly engaging and dynamic shopping experience.

Imagine a consumer so enamored with a brand that they want to embody it. Isn’t this every retailer’s dream? Enter the creation of branded residences—the next logical step some luxury brands are taking to create a deeper connection with their brand loyalists.

Take the Fendi Chateau Residences in Miami, for example, which feature 58 “flow-through oceanfront residences” featuring interior design by Fendi, white-glove service offered “on an intimate scale,” a spa with European thermal pool, and ultra-luxury concierge services by Fendi Chateau attaché, among other amenities.

Similar branded residences to suit every preference are popping up, and catering to consumers who live and breathe their brands.

Branded Residences Aren’t New – But They’re Hot Now

Branded residences aren’t exactly new. They date all the way back to the 1920s when the Sherry-Netherland became the first branded hotel development to feature fully serviced apartments. The concept gained traction when Four Seasons opened its Boston luxury residences in 1985.

Branded residences are luxury residential properties tied to a brand. Historically, they were only offered by exclusive hoteliers, providing prospective buyers the opportunity to purchase their own beautifully designed residence, either within the hotel itself or in a hotel-owned standalone development.

While hoteliers investing in branded residences was a logical progression, today’s lifestyle, auto, and fashion brands also are getting in the game, leading to a resurgence in these signature homes. In fact, the branded residence sector is up 160% over the past decade, according to London-based commercial real estate brokerage Savills.

“Fashion, a natural extension of one’s lifestyle, seems like an obvious choice for a branded home, and luxury buyers trust that products from fashion houses will retain high-quality details and a refined level of craftsmanship,” writes Emma Reynolds in the Robb Report.

While many high-end fashion brands including Fendi have carved out a niche in the home décor industry, branded residences offer the opportunity for these brands to immerse brand loyalists through touches like customized fabrics and fixtures. These looks not only appear in residents’ homes but throughout the entire building as well.

The Collaboration Behind Branded Residences

Branded residences typically stem from a partnership between a company and a developer in which the brand grants a license to the developer to market and sell residences incorporating its brand. Owners of branded residences are also typically required to pay annual homeowners’ association fees to help maintain the elevated look of the property.

Bentley Residences is an example of one of the newest non-hotel branded residences. Miami, which is known as the “branded residence capital of the world,” is home to these 216 furnished apartments and a host of amenities that rival those found in a five-star resort.

The Waldorf Astoria in New York City is another example of a branded residence, though a co-located type since the construction of 375 residences will sit on top of the hotel space. The residential section, called The Towers, has separate owner entrances and a concierge closet at the entryway of each residence to ensure secure and discreet package delivery.

Want the branded residence experience without the commitment (and cost)? Book a stay at Armani Hotels in Milan or Dubai, the self-described “pinnacle of luxurious living and fine dining” in “an exceptional world of luxury.” Starting at $2,400 a night for a room in Milan, guests can add on one-of-a-kind experiences and services to make their stay at Armani Hotel Milano “more and more exclusive.”

What’s the Draw?

The simple explanation points to modern society’s need for brand familiarity and speaks to the equity that some brands can boast, particularly in the luxury sector.

“We live in a branded world, and buyers of such products seek association with brands they are loyal to and know they can rely on for a premium product,” says Jonathan Nash, a top-producing luxury realtor with Beverly Hills-based Hilton & Hyland.

The allure of branded residences’ elevated level of luxury living appeals to time-starved, affluent, and brand-conscious would-be owners who are attracted to all these properties have to offer, including the exclusive brand experience. After all, these residences not only offer quality design, but security and the highest levels of service. Amenities like valet parking, spa services, dog walking, and even personal concierge services are table stakes.

For examples of unique amenities, look no further than Porsche Design Tower or Bentley Residences, whose auto-centric luxury perks include over-the-top personal car elevators. Major Food Group’s Villa even features a private restaurant and chef-designed kitchens.

The Future of Luxury Branded Residences

Here’s a revealing insight: commercial real estate brokerage Savills estimates that non-hotel brands will account for 20% of the total supply of branded residences by 2030. That’s an increase of 40% from current levels, showing the incredible ongoing transformation and expansion within the branded residences market.

They also predict the demand for branded residences will remain strong in global cities that are hubs for business and education, cultural attractions, and unique experiences. All of those attract the sort of affluence required to live in a branded residence.

In addition to New York, London, and Miami, another hot global market that is predicted to experience a growth in branded residences is Dubai, with 51 operational schemes in the works, according to Savills.

A few of the brands planning on entering the market before 2030 include Dolce & Gabbana, de Grisogono, and Mama Shelter.

Forget the fountain of youth. It’s time to tap into the silver shoppers tsunami. Older consumers are becoming the majority; even youth-focused brands shouldn’t write them off. This demographic wields significant disposable income, making it ripe for savvy retailers who will provide the products and experiences they desire.

If you have any assumptions about Baby Boomers and the way they spend, it’s time to throw them out. While Millennials are the largest generation by population share, Boomers hold 51% of the wealth in the United States. The International Standard Organization estimates that in the US alone, the Boomer generation outspends others by $400 billion annually—and a significant portion of future global income will be concentrated in their hands.

As the population ages, how can retailers anticipate the needs, desires, and evolving spending habits of older consumers? And what do these “Silver Shoppers” mean for your business?

Shifting Perceptions and Redefining ‘Old’

Would you believe that the women in the Sex and the City spinoff, And Just Like That were supposed to be the same age as the women in The Golden Girls? Or that in All in the Family, Edith was only 44 and Archie was 48? This shift in how age is portrayed in pop culture reflects how the concept of “old” age has changed dramatically in the last few decades.

“More senior citizens are more healthy, adventurous, and actively engaged in society than their counterparts were even 10 years ago. Now, researchers say the way aging is measured should change too,” explains Mehran Movassaghi, M.D. in a blog for Pacific Men’s Health.

Baby Boomers are those who were born between 1946 and 1964. More than 20% of the U.S. population fall into this category.

While retirement is often associated with people in this age group, about 40% of people age 55 and older were working or actively looking for work in 2020, according to the U.S. Bureau of Labor Statistics.

This trend of “unretirement” is just one example of how Baby Boomers are bucking what it means to age. A recent Michigan State study found that people say they feel about 20% younger than their actual age. Beginning at age 50, many say they feel about a decade younger.

But how does this redefining of “old” shape the retail market?

Senior Spending Power

According to BCG, there will be more older people than younger people globally in the next couple of decades.

“Aging will transform the demographic structure of every major market, even those with relatively young populations today. In China, for example, the percentage of the population 50 to 70 years old will grow from 26% in 2020 to 30% in 2050. In India, it will increase from 16% in 2020 to 25% over the same period. The size of this opportunity will continue to grow, too: the population of 50- to 70-year-olds in the 12 nations we examined will approach 1.1 billion in 2050.”

This demographic shift offers a significant opportunity to retailers, as the increasing number of older consumers with higher average net worths represents a substantial and growing market segment.

As the population’s average age goes up, retailers and other industries will need to be flexible in how they reach these consumers. Many in this aging cohort are influential, active, and in control of a significant amount of expendable income.

Capture the Boomer Audience

If age is just a number, how does that reflect in the behavior of aging consumers? As it turns out, older consumers are active consumers. Boomers are doing more shopping and scrolling than ever before.

More than half of the Baby Boomer population shops online. Consumer research also found that while most senior populations still prefer to shop in person, there are certain key aspects of online shopping that can be attractive when emphasized, including fast delivery, simple tracking, and secure packaging.

For retailers who recognize the evolving preferences of aging consumers, there’s a significant opportunity to tailor shopping experiences to better cater to this demographic. Here are some tips to capture this dynamic audience that is redefining what it means to age.

1. Meet them where they are.
As Boomers and Gen X age, health and medical care will become a priority. As we recently explored in our article on Medtail, “With an aging Boomer population, increased healthcare demands and shifting consumer preferences, it’s no surprise that repurposing retail space has become a strategic necessity. It has created a dynamic landscape that continues to evolve as both the health care and retail industries face unique challenges.”Retailers, particularly in the Medtail space, can take a tip from CVS, who opened MinuteClinics in many of their locations.“Convenience, accessibility, familiarity, and trust are all elements that retail health clinics and pharmacies can build on in the decades ahead. It’s essential that we make older people feel welcome in retail health clinics and show them that they are interacting with a provider they can trust,” says Creagh Milford, DO, MPH, Senior Vice President of Retail Health, CVS Health.

2. Give them a grocery experience to remember.
Consumer research shows that shoppers between ages 19 and 24 make more than 34% more grocery trips than shoppers ages 75 and older. Because older consumers tend to go to the grocery store less often, each trip becomes more meaningful.Retailers that make in-store conversions to impact the shopping experiences of senior shoppers in a positive way can benefit. For example, varied basket sizes, clear signage, and personalized assistance can offer a better shopping experience for seniors, who are more likely to return when they feel valued and accommodated.Rethinking product offerings to serve the needs of older adults is another way to attract this demographic. From easy-to-open packaging to products designed for accessibility and convenience, adapting offerings to cater to the unique needs and preferences of older adults can enhance their shopping experience and foster loyalty.

3. Make human interaction a priority.
Older consumers tend to prefer the human touch, too. A fitting example of catering to this desire comes in the form of “slow checkout lanes” that have been rolled out in The Netherlands at Jumbo Supermarkets. The slow checkout concept, for shoppers who prefer to chat to a human than scan their own items have been so popular that the chain has promised to open them in 200 additional locations.

4. Integrate technology with accessibility in mind.
Seniors will gladly spend money online, provided you make it easy for them to do so. Ensure that online platforms are user-friendly and accessible, with larger fonts and easy navigation. It’s important for any e-commerce site to be safe and secure since this is a top concern of shopping online for seniors.Retailers should consider offering online shopping with home delivery options for those who may have difficulty visiting physical stores.

5. Offer in-store events or workshops.
Hosting events or workshops tailored to Boomers’ interests, such as cooking demos, gardening classes, and DIY workshops (like Lowe’s DIY-U workshop) is a great way to engage customers in your brand without selling. Those types of activities provide opportunities for social interaction (that we all need) and experiential shopping experiences.

6. Engage in the community.
Consumers in general, but mostly Gen X and Boomers, appreciate businesses that contribute positively to their neighborhoods and support local causes. Engaging with the community through events, sponsorships, or partnerships is a great way to build meaningful relationships.

Become Senior Savvy

In the end, overlooking the opportunity that Silver Shoppers bring to the table can be a huge mistake for your retail business. Industries like apparel, health supplements, skin care brands, alcohol beverages and investment brands are booming thanks to the mature consumer.

This often-overlooked segment of shoppers represents a significant opportunity to retailers. With a better understanding of this demographic, retailers can woo these consumers into loyal shoppers.