If you are a retailer and are not already thinking about the effect that Millennials and Generation Z (or iGen) will have on your business, it is time to start. Right now.
We’ve all seen the recent headlines of the importance of reinventing the store, giving brick and mortar retail venues much needed makeovers by melding the offline and online worlds and providing unique in-store experiences (aka experiential retailing) to store shoppers.
Two groups, however, that retailers should be paying extra special attention to are those youngsters from the Millennial and iGen generations. These digital natives are obsessed with their phones and social media and prefer to spend their money (or their parents’ money) on experiences and technology rather than “stuff,” according to Jason Dorsey, a teen and millennial expert with the Center for Generational Kinetics. The power of these generations has quite clearly captured the attention of mainstream retailers and brands, as evidenced by a recent announcement from one of retail’s largest organizations.
Target recently launched a detailed initiative to keep the attention (and loyalty) of the Millennial generation - an increasingly influential shopper segment - to its grocery department. Target CEO Brian Cornell has stated that he is, “pushing to offer shoppers more organic, natural and gluten-free items and less packaged and processed foods.” As reported in a recent Retail Touchpoints article, according to the
Wall Street Journal, Cornell has been touring grocery stores such as Trader Joe’s and Wegmans Food Market to get ideas on how to upgrade Target’s grocery business. In addition to their new focus on grocery, Target has also announced other Millennial-focused strategies in its home, beauty and apparel departments. For example, Target will be expanding its well-known designer collaborations with younger-skewing brands including popular online fashion magazine Who What Wear, fitness empire Soulcycle and Finnish design company Marimekko.
Because of Millennials’ and iGen’s heavy focus on and preference for digital engagements from their favorite retailers and brands, organizations will need to make swift changes to their physical stores by 2025. According to a new study from ABI Research, Millennials, to no one’s surprise, are driving a revolution in how stores use technology to provide a complete shopping experience. Patrick Connolly, principal analyst at ABI Research says, "Millennials play a large role in the in-store shopping revolution, as their smartphones are basically an evolutionary extension that the retail industry has yet to catch up with. The conceptual battle between brick and mortar versus online is dead. All retailers must become omnichannel and harness the power of the smartphone by developing next-generation, personalized experiences." In addition to installing in-store technologies such as beacons (more on that below), ABI Research also advises that brick-and-mortar retailers upgrade and aggregate data across all physical, online and mobile outlets. This allows a holistic understanding of the customer, which in turn enables personalized offerings, streamlined processes and new customer services.
For Millennial and iGen shoppers, in-store experiences by 2025 will likely begin and end with their mobile phones, which increases the importance of beacons to the physical store. According to Business Insider, beacons are among the most important new mobile technologies helping real-world merchants win back sales now and are sure to win the hearts and wallets of younger millennials and iGen shoppers in the future. These low-cost devices can communicate with smartphone apps indoors through a Bluetooth signal. Savvy retail chains are currently using them to communicate with mainstream consumers in-store, serving as loyalty offerings to generate instant rewards, experiences or location-based offers. If you ask us, it is a perfect match for the retailers and Millennial/iGen shoppers. Furthermore, by making consumer generated content available at the very point of decision via the smartphone for these young but very powerful shoppers through the use of digital displays and BLE-enabled ESLs, retailers can ultimately provide them with unique and engaging in-store experiences - winning their trust and their business.
Note: Much has been written in recent years on the trends and shopping personalities of the Millennial Generation, for a great read on the iGen Generation (the group to follow the Millennials,) check out this Business2Community article by Chris Horton. Retailers take note – this group of young shoppers will, by 2020, will account for 40% of all consumers!
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