Why This Retailer Is Bypassing Millennials And Gen Zers For Gen X Customers

NY
CNN
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Most retailers strive to stay relevant by courting younger Gen Y and Gen Z shoppers. No Lands’ End.

As it seeks to increase its customer base, Lands’ End bucks the trend by deliberately embracing the “forgotten generation”, Generation X.

They are the generation of consumers sandwiched between the Baby Boomers, born in the years after World War II, and their children, the Millennials, with the first born in the 1980s.

“There was a strategy at a time where we were going to appeal to Millennials,” Jerome Griffith, CEO of Lands’ End, who will retire at the end of January, said at the ICR conference last week. “He did not fly with our clients.”

In a hurry to capture the attention of younger consumers, the retailer stumbled and missteps in fashion. Sales tumbled as its top older buyers were put off by the fancy dresses and high-heeled party shoes that appeared alongside the comfortable clothing embraced by moms and dads.

“So we said, you know what, we have this fancy generation of customers right behind the baby boomers, the Gen Xers. Just as we go out looking for new consumers, we go after them,” she said.

Given that the number of Gen Z and Millennial consumers should grow to 70% of the population by 2028 vs. 60% in 2021, and have considerable buying power, it’s no surprise that retailers are going after that batch of shoppers.

“While the Gen Z and Millennial cohorts are lucrative and interesting, there is a certain obsession with them in retail and fashion that often works to the detriment of older generations,” said Neil Saunders, retail industry analyst and director GlobalData overview.

“The truth is that the more mature cohorts account for a lot of retail spend and there is a significant opportunity that is not always adequately addressed,” he said.

Lands’ End, a 60-year-old brand based in Dodgeville, Wisconsin, is best known for its durable, classic casualwear—fleece jackets, coats, sweaters, T-shirts, chinos, and pajamas—that’s designed more for comfort than for be in trend It sells its products through mail order, online, in-store, and through third-party marketplaces like Amazon.

(AMZN) and Kohl’s

(KSS).

But the company says it knows who its main customers are.

“She is a baby boomer, mid-50s, lives in the suburbs, works, is frugal, has a household income of over $100,000 a year, and has or had children at home,” Griffith said.

About six years ago, the database of its primary buyers, who typically stayed with the brand for 18 years, was shrinking. “We were losing customers,” he said.

“It’s pretty rare in retail for a customer to stick with your brand for that long,” said Andrew McLean, the company’s incoming CEO.

Griffith said the company tried to skew younger people. “What you want to do as a retailer is keep your customer base the same age or attract younger people,” he said. Skewing younger didn’t work, she said.

But going the other way in the age demographic did.

“When we look for new customers, we really look at their buying habits and where they shop,” Griffith said. “That’s why we’ve expanded into Amazon, Kohl’s and Target. These new customers come through these markets,”

He said 75% of new customers who found the brand in third-party marketplaces “have never shopped at Lands’ End or are inactive customers and haven’t shopped at Lands’ End in five years.”

“So we’re bringing in a new client who is actually the same client, but 10 years younger. They are members of Generation X,” he said, adding that Gen X shoppers showed the same long-term brand loyalty as Baby Boomers.

Saunders said Gen X is a good match for Lands’ End “because their brand is much more in tune with that generation… It’s not the most modern, but it’s not the latest either. And there are many practical, yet stylish pieces that are suitable for the lifestyles that many members of Generation X now lead.”

“I would be more concerned if Land’s End said it was going to reinvent itself as a younger brand than if it said it was focusing on what should be its core market,” Saunders said.