Retailers need to recalibrate their approach to reach millennials
Retailers should re-assess their business strategy and technological prowess by benchmarking their store layouts, systems and processes against shopping preferences of millennials and post-millennials, who are going to redefine the future of retail, argues GlobalData.
Pressed for time, millennial consumers look for convenience and flexibility. They expect a seamless omnichannel experience and look to combine online shopping, mobile apps and visits to physical stores.
*Millennials (also known as Generation Y) are the generational demographic cohort following Generation X. There are no precise dates for when this cohort starts or ends; demographers and researchers typically use the early 1980s as starting birth years and the mid-1990s to early 2000s as ending birth years. Millennials are sometimes referred to as "echo boomers" due to a major surge in birth rates in the 1980s and 1990s, and because millennials are often the children of the baby boomers.
While millennials* use eCommerce platforms and apps than previous generations, more than half of their purchases still take place in bricks-and-mortar stores, reveals www.globaldata.com.
Incentive to visit stores
Millennials, however, need an incentive to visit stores, such as an entertaining environment, strong brands that they can identify themselves with, and recreational facilities like in-store cafes or experiences in form of memorable product demonstrations and trials.
As millennials have not completely ditched visiting bricks-and-mortar stores, retailers need to deploy analytics to align their store layouts, systems and operational processes in line with millennials’ digital maturity and preferences.
Andreas Olah, Digital Retail Analyst at GlobalData, says: “Retailers also need to work on their social media strategies and integrate these with loyalty programs, customer service functions, and various mobile apps, from style advisors and games to third-party apps that provide voucher schemes. They look to cooperate with strong brands that are popular with millennials.”
Mobile devices are the key driver
Millennials and post-millennials primarily use mobile devices including smartphones and tablets, besides wearables such as smart watches and augmented reality devices to interact with retailers and purchase products. Since they use these devices at home, work, on the bus and when visiting physical stores, retailers need to detect their location and provide store or aisle-specific content and notifications to encourage interaction and purchases, says GlobalData.
Retailers can also use various geo-fencing and tracking tools such as Light Fidelity (Li-Fi), which detects shoppers’ location by sending light signals to their smartphones’ camera, in addition to more traditional ways like relying on Wi-Fi hotspots and mobile phone providers’ data.
“While some millennials may object to being tracked and value data protection, the majority are happy to share at least some data if they get something valuable in return, such as greater personalization, more convenient wayfinding, special offers, and the ability to complete multi-channel purchasing journeys in stores,” adds Olah.