HOW MILLENNIALS ARE TRANSFORMING RETAIL
Perhaps no generation since the baby boomers has been discussed more than millennials. This demographic, which spans people born from 1982 through 2004, came of age at a watershed moment in how we live our daily lives: the rise of the Internet, mobile technology, and the tech revolution they brought with it.
Inevitably, retail is being affected by these changes to cater to millennials’ new shopping habits. Overall, the major difference between millennials and other demographics is that they are more digitally connected than ever to brands. We’ve covered the importance of omni-channel retailing at length, but it’s more important than ever to millennials and the way they shop. Research consulting firm Accenture released a report that backs this up. Shoppers want the option to make purchases immediately, whether it’s online, on a mobile device, or in-store. It’s crucial that retailers cater to millennials, as they are estimated to make up $1.4 trillion in annual purchasing power in the U.S. alone by 2020.
What other changes are they bringing with them?
Open communication between customers and retailers
To keep millennials happy, retailers must be able to engage them at all touchpoints. This social media generation will prove their loyalty by engaging with brands online, and customer service must be ready to answer any questions they may have. In a recent survey of 1,300 millennials, 62 percent of respondents said they would be more loyal to a brand if it engages with them on social networks. This should include a dedicated customer service team that is available to rapidly respond to requests and comments on Twitter, Facebook, Pinterest, Instagram, and the like. More and more shoppers are using their mobile phones to look up information and locate stores, and are accustomed to the immediacy of a quick online search to answer all of their questions.
Brand loyalty isn’t new, but how millennials select their preferred brands is. Discounts and rewards are important and today’s younger shoppers who want more bang for their buck and to feel valued. A recent study showed that 63 percent of millennials have joined a retailer’s loyalty program in the past year, compared to 55 percent of the general population. Kohl’s, in particular, has reaped the benefits of targeting millennials in its loyalty program, with 30 percent of millennials enrolled. The retailer leads the pack compared to its peers Target, Gap, Sears, Macy’s, JCPenney, and Dick’s Sporting Goods.
It also helps to make a quality product. Millennials are more willing to stick with a brand if they are happy with the goods they receive. Top retailers favorited by this demographic include Walmart, Target, Apple, Microsoft, and Amazon.
Creating a retail “event”
When shopping in-store, many millennials don’t just pop in and out. They often shop with friends, and want the shopping experience to be a fun event like their other extracurricular activities. For holiday shopping, an overwhelming majority of millennials enjoy in-store events, music, and other offers more than their counterparts. Kimco has long incorporated events into our shopping centers to attract additional foot traffic, whether it’s through concerts, seasonal events, radio station-sponsored giveaways, or more.
Ensure a seamless transaction
Millennials have grown up in the “immediate generation.” This means that they want products delivered to their door quickly. Local stores have become mini-distribution centers, and can now fulfill orders that are placed online.
As for payment, this customer group goes beyond cash, check, or credit. Apple Pay, Google Wallet, Square, PayPal and other payment plans are gaining popularity amongst retailers. While adoption of this technology is slower than some other trends, it is gaining awareness as more shoppers try out the new tech. BCBGMaxAzria’s BCBGeneration went a step further to cater to millennials: the fashion designer offered holiday shoppers the ability to pay via monthly installments through a virtual credit card. The idea came to the retailer after microloans to its Latin American customers surged in popularity, prompting the retailer to bring a modified concept to the States.
These four trends don’t require retailers to totally overhaul their operations, but instead serve as a reminder to retailers to always innovate and adapt to the newest generation of shoppers, while continuing to serve the rest of the population. 2016 will see the continued evolution of these trends as job creation and spending pick up.