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New York -- The Millennial generation is expected to outspend Baby Boomers by 2017, yet retailers underestimate the size and purchasing power of this consumer, according to a new study by Berglass + Associates and Women’s Wear Daily.
The study, “What Happens When Millennials Get the Wallet,” found that retailers do not fully understand the needs of Millennials and are employing business strategies and tactics that do not apply to this customer.
“Millennials have different motivations, attitudes and behaviors than previous generations, and retailers need to adjust their business strategies accordingly in order to thrive,” said Les Berglass, CEO of Berglass + Associates. “For the first time in several decades, we will see a new member of the C-suite, who will be responsible for driving two-way communication between the Millennial customer and the brand and for developing initiatives that will deliver long-term growth.”
The online survey, which was conducted in September 2013, queried 121 U.S. business leaders in all sectors of retail (including department stores, specialty stores, home shopping and direct-mail catalogs) primarily in the apparel, accessories, footwear and beauty sectors. Key findings unveiled in the survey include:
- Approximately half of respondents are unaware that Millennials are expected to outspend Baby Boomers annually within five years.
- Millennials rely most on their friends to make buying decisions, yet more than a quarter of respondents mistakenly believe that online advertising is the number one influencer of Millennials' purchasing activity.
- Of the executives that were surveyed, more than 30% are CEO’s or presidents, who plan to significantly increase their digital leadership over the next three years.
- Sixty percent of respondents are not conducting any research or analysis of the Millennial customer.
- Only 36% of respondents from companies with both physical stores and e-commerce sites offer a seamless customer experience, yet Millennials expect the channels to be integrated.