How millennials have changed the retail landscape
Retailers targeting millennials have had to rethink everything they know about sales. As a general cohort, this demographic between the ages of 18 and 35 has, overall, significantly less income, much greater student and consumer debt, and far higher demands for a positive experience than previous generations. Home ownership is often out of grasp, many don’t—and don’t even want to—own a car, and far more would prefer to spend that money on life experiences and events rather than products.
“That’s a really important callout for the retail industry,” says Retail Prophet founder, Doug Stephens in his webinar The Five Most Important Decisions Facing Today’s Retail CEOs. “Retail has always been very much product-led, experience second. Experience was sort of a garnish when you were buying a product.”
Then, of course, there’s the mobile experience. For a generation that lives on its phone, they want that mobile experience to be first and foremost.
“The most affluent millennials spend the most time online, hence the importance and critical nature of making sure that your online game, and in particular our mobile game as a retailer, is on point,” Stephens says.
So what’s a retailer to do?
For one, make the experience a part of the purchase. Stephens says the products should then just come along for the ride. He cites how Ikea, historically known for its massive warehouse showrooms in suburban areas, is now creating smaller design studios in urban centers—also in part because more millennials are happier living in cities than previous generations.
Another thing retailers can do is be more transparent about business practices. 66 percent of consumers are willing to pay more for sustainable brands. This is changing the way retailers need to think and approach what they’re doing. Millennials expect companies to be socially and environmentally responsible. From Microsoft’s perspective, that means supply chain retailers really need to start thinking about sustainability within the supply chain and manufacturing processes, which will ensure they are one step ahead of the game.
And millennials will be more likely to choose a company that pays and treats its employees well.
“Now, with the kind of forums we have online and with social media, certainly these issues are coming right to the surface,” Stephens says. “It’s a primary concern on the part of millennial consumers.”
Finally, millennials are willing to trade their privacy and spend their social capital—if they get something in return. That could manifest itself through better customer experience or an exclusive offer, for example. Personalization and retailers who know their customers through various forms of technology also add to brand loyalty, which is ultimately what will drive more revenue for retailers.
To learn more about how you can reimagine your retail experience, watch the on-demand webinar The Five Most Important Decisions Facing Today’s Retail CEOs, which Stephens shares these insights and more on the changing trends in retail.
