Where Millennials shop, 2016 trends

Where the Millennials Shop

The Millennial generation is empowered, savvy and digitally stimulated. Millennials are always connected and use their mobile devices to their shopping advantage, yet most Millennials still prefer to visit a physical store. According to a recent study by Cushman & Wakefield “75% of Millennial purchases are made at brick-and-mortar stores.”

Why?

For Millennials, shopping is an experience rather than a way to acquire things. They prefer to see, touch, and interact with the merchandise and the brand; something they can’t get online.

Although this is a huge opportunity for brick and mortar, it’s also a frustrating challenge. Since Millennials have easy and immediate access to a wealth of information, they are selective and demanding. Therefore, how a store makes Millennials feel is crucial to their customer satisfaction.

In order to entice, and more importantly, retain Millennials as customers, retailers must understand, embrace and respond to the four top behaviors of Millennial shoppers:

Millennials are connected 24/7.

They leave their phones on, even while they sleep. Millennials have constant access to a wealth of information about brands, products, trends, and sales. This puts pressure on retailers to keep up, adapt, and move ahead of their competition.

Millennial Shoppers, Mobile and Brick and Mortar
Millennials may be connected by mobile, but they look for individualization in the physical store.

They want a unique, memorable experience.

Millennials expect a compelling, personalized in-store experience every time. Retailers get one chance to get it right. If Millennials aren’t engaged when they enter the store, they walk out without purchasing and head straight through a competitor’s doors.

Millennials share everything.

How a piece of clothing looks, how much a product costs, a display that makes them laugh, or how they were treated by an employee – it all gets shared to their huge social networks. Whether it’s a good or bad experience, Millennials let their peers know. The message is clear, and it can influence others’ opinions and make or break a retailer’s reputation.

They want shopping to be seamless.

They want the products, information and prices in store to match what they found online, and they expect digital transactions to be easy. This means all retail channels should be unified, and stores must be able to scan coupons and accept payments on consumers’ smartphones without hassle or hesitation.

In summary, retailers need to evolve to please smart Millennial shoppers. By accepting change and adopting new technologies, retailers can consolidate merchandising information and open up communication between stores and corporate headquarters, allowing for consistency between all channels. Retailers can also look at each store’s attributes, customize their stores to Millennial shoppers’ preferences, and track execution and performance results to figure out what is or isn’t working. As a result, retailers can design an authentic, exciting, on-brand experience that keep Millennials interested, engaged and ultimately coming back.

shopper marketing, the future of retail

The future of the retail model

In a recent article published by Transworld Business, Jeff Harbaugh a consultant who has been analyzing “omnichannel” strategy gives his opinion on the evolution of marketing and the future of the retail model. Harbaugh states, brands today almost need to run two companies in order to sell to both millennials (born 1982-2000) and baby boomers (born 1946-1964). Though obviously there is some overlap, today you probably can’t sell the same product lines to both groups. The two generations shop, get their information, are influenced and have different expectations with brands. This difference affects all parts of the supply chain and today retailers are struggling to cope.

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Read below on what Jeff Harbaugh thinks is going to happen within retail:

• Retail space is going to contract.

• Malls (with the exception of the high end ones I’m told) will be in trouble. Fewer people are visiting them. They will spend less. This is a slippery slope. Lower traffic means fewer sales which mean some stores close, which means lower traffic which means more stores close.

• Advances in robotics and technologies like 3D printing means that more product can be customized in a short time scale.

• Online/mobile generated sales will continue to grow (duh) energized by our logistics capabilities that get product to (and from) consumers quicker.

• Inventory requirements for retailers will decline as will the square feet needed for physical stores.

• Real product differentiation will continue to be hard to achieve. Making a product at least occasionally hard to find will matter.

millennials-shopping-macys

Macy’s looks to hook Millennials early and keep them for life

Macy’s is aiming to be there for Millennials, every step of the way from college to marriage, and everything in between.

According to Stores, the retail chain is hoping to reel in the much sought after demographic early in their lives, perhaps during college, so that they come to Macy’s for everything from a suit for their first interview to their wedding registry.

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From the article:

Ivan Feinseth, chief investment officer for Tigress Financial Partners, sees nothing but the upside for reaching this demographic now. “The strategy to target that group as they start to become independent shoppers means hopefully they stay loyal shoppers,” he says. “It is a nice tie-in with Macy’s overall strategy.”

It’s given Macy’s a slight edge in the department store category, believes Jeff Fromm, executive vice president at ad agency Barkley and co-author of the book Marketing to Millennials: Reach the Largest and Most Influential Generation of Consumers Ever. Macy’s is “probably ahead of their peer group,” he says. “But they’re not limited to competing with just retail brands. They’ll have to go against the best in class. Not just best in class in retail, but better than Chipotle in the restaurant space, better than the Dollar Shave Club.

“The benchmark that they should strive to set is best in class, period,” he says. “I see a lot of positive things they’re doing. But it’s particularly hard to be a disrupter when you’re an iconic brand.”

Millennials “are the fastest-growing demographic in the States today,” Reardon says. “They have the largest buying power and they are the future. We’ve always been extremely interested in that younger consumer. Now because it’s such an important demographic, we’re making a stronger play for them.”

Millennials — those born between the early 1980s and early 2000s — number about 80 million, a slightly larger group than Baby Boomers. Macy’s has a solid head start on winning their dollars, Fromm says. The retailer is in the process of introducing 13 new fashion brands and repositioning 11 others, with plans to do the same in housewares and furnishings.

“It’s a brilliant strategy,” he says. “Millennials do like name brands, but private brands can be successful too, if they are well positioned. For the Millennial segment, it’s much easier to launch a new brand than to reposition an existing one.”

millennials-shopping-retail-trends

Strapped for Cash Millennials Still Spend on Certain Items

Despite the fact that almost a third of Millennials still live with their parents, and a large majority are unemployed, they still manage to spend $1 trillion annually, according to Forbes.

millennials-shopping-retail-trends

While they do not spend their money across the board, they do dig deep enough into the couch cushions to spend in three specific areas: technology, apparel, and food.

From the article:

In a recent MasterCard MA -0.85% survey, 53% of millennials ranked technology as their top passion. Computer and electronic stores were ranked among their top five spending categories.

Jason Dorsey, chief strategy officer at the Center for Generational Kinetics, said mobile phones reflect the level of status for millennials — those between ages 18 to 35. He calls mobile technology — like the smartphones and tablets offered by the likes of Apple, Samsung and others — the new “gateway purchase” that lets young people show they have money to spend.

It’s no secret that millennials are tech-savvy. But they especially love technology that meets their emotional needs, said Jeff Fromm, executive vice president of advertising agency Barkley and co-author of Marketing to Millennials: “Useful is the new cool,” he said. Brands incorporating technology to user experience, like Intel INTC -1.14%, Sprint Nextel S -0.47% and Sony SNE -1.18%, have been popular among the demographic.

Broadly, Generation Y looks for ways to get the most bang for their buck, said Kit Yarrow, a professor at Golden Gate University. And they spend more on technology because millennials feel they get more for their money when investing in these products.

Hipster millennials shopping, shopper marketing

What every Retailer must know about Gen Y, part 1

Many retailers would rather hire a 50-year-old who they think has more of a work ethic than hire a 20-something Millennial.

Hipster millennials shopping, shopper marketing

The Millennial Generation (those generally born 1981 through the mid-1990’s) were raised by Boomer parents who came down to school and fought their battles for them thus shielding them from the reality of consequences.

They never lost anything because parents hovered and swooped in like helicopters to make sure everything stayed in order.

Like it or not, accounting for 25 percent of the US population, the Millennial Generation is the largest consumer group.

As one author put it, “When Gen Y [Millennials] speaks, boomers must listen.”

I don’t presume to be “the” expert like those who have written volumes on the Millennial Generation but during my research I met some great resources that validated and expanded my understanding on the topic.

I think the insights presented here will help you as a retailer understand some of the major trends Millennials are driving and that you can’t ignore.

Who they are

The Millennial Generation desires to change the world. They are generous with their time and donations. According to the Millennial Impact report, More than 70 percent of Millennials surveyed said they have raised money on behalf of nonprofits.

Clearly, this generation believes in giving back as part of a broader social compact of helping others. While they do want the world to entertain them, they have more of a sense of We than any other generation.

As put in the New York Times, they have “No anger, no edge, no ego.”

Millennials live two lives: one in real time and the other in an edited virtual world. This is a generation that experiences life through their smartphone held on outstretched hands, taking videos to capture and share their moments on Facebook or Instagram. For them, it’s not about being in the moment — it’s about capturing a moment and sharing it.

They’re very much keeping up with the Joneses, but not by collecting things and products like their Boomer parents but by collecting photos, friends and experiences.

Most would like to own their own business at some point. If Zuckerberg can do it, why not them?

What juices their lives? Creating and experiencing.

They’re not like boomers

Let’s be honest, when Boomers hit 18, they had to get out of the house so they could have their own place to have sex. That meant they had to learn about not only getting the apartment, but paying for it on their own.

The Millennial Generation is not leaving the house; not because they don’t have a job, but because quite simply, why should they? When the house comes with room service and a clothes washer stocked with detergent, there’s no motivation for them to leave.

Rebellious? Hardly. Unlike Boomers, the Millennial Generation tends to listen to the same music, watch the same movies and use the same products as their parents.

Baby Boomers had definite times they lost friends: moving from elementary school to middle school, to high school and between different jobs. This forced them to have to make new friends along the way.

Millennials can keep track of every friend they’ve met via social networks. That means when they’ve moved, they have that security and never feel isolated from their friends. They always have a tribe of people to tell them things will be fine.

Boomers used to be much more isolated and alone and had to be encouraged to “Reach out and touch” by AT&T. Millennials never have to feel alone because they can constantly share pictures and texts.

[via Retail Customer Experience]

Seven tips for attracting Millennials

Expert advice on how restaurants can tap into the spending power of the country’s largest demographic group

Millennials, the country’s heaviest restaurant users, are cutting back restaurant spending, according to consumer research firm NPD.

Although NPD estimates that Millennials made more than 12 billion visits to restaurants in 2011 and spent $73 billion during those visits, the firm also reports that the number of visits by that demographic has been falling since the start of the Great Recession in 2008. That makes it even harder to win over this young crowd that not only has strong opinions, but also likes to share them through social media.

Millennials represent “the biggest gap between cultures in our history,” said Craig LaRosa, a principal in the Newton, Mass.-based consulting firm Continuum, which designs and develops products, services and business models.

Also known as Generation Y, Millennials make up the country’s largest demographic group at about 76 million people — even outnumbering Baby Boomers, according to the U.S. Census Bureau, which defines them as people born between 1977 and 1995.

In order to understand this age group better, LaRosa and his colleagues have been doing ethnographic research with Millennials, spending time in their homes, talking with them and eating with them. Below are some tips on how restaurants can cater to Millennials’ social needs and habits, based on information LaRosa shared from this research.

Tip 1: Encourage sharing and interaction. 
For Millennials, food is secondary to interactions with people. So they like smaller portions that allow them to share multiple dishes instead of ordering traditional plates just for themselves. They also are not interested in the standard service in which the food for each course is brought out all at once. Instead, they like plates to be delivered as soon as they’re ready.

Tip 2: Remember that less is more. 
Millennials are not only fond of small portion sizes, but they also like fewer ingredients.

“When they shop, the less ingredients, the better,” LaRosa said, adding that members of Generation Y like “clean” labels that list ingredients that they can identify.

Tip 3: Put food and preparation on display. 
Just as Millennials like transparency on their labels, or knowing the origin of the cattle they’re eating, they like open kitchens for the same reason: They like to know where their food is coming from.

LaRosa said some members of Gen Y have even bought cows, named them, had them slaughtered and then shared the beef.

Tip 4: Make dishes familiar but not boring. 
“Family foods done interesting,” like the Korean taco, are a gastronomic goal of Generation Y, LaRosa said. “Exotic flavor is being brought to very traditional foods,” he noted, adding that Thai, Vietnamese and Indonesian flavors appeal to Millennials.
[via NRN]