The Secret Door to Brick-and-Mortar: Succeeding With Millennials

By Nate Dwyer, Red Peak Branding

In the face of an e-commerce take-­over, brick-and-mortar retailers are flailing to attract Millennials into stores and industry experts are issuing the same old humdrum advice. Marketing gurus instruct retailers to make retail experiences for Millennials feel “personal” and “convenient.” These are surface level tactical recommendations rooted in common sense — people like to feel attended to and enjoy a hassle-free shopping experience.

But industry experts have overlooked a much more compelling (if not also obvious) emotional insight that may reveal how to turn a now skeptical, pragmatic, yet values-oriented shopper, into a loyal follower.

While some peg Millennials as self-centered actors, it is clear also that the idea of togetherness, teamwork and support are important to this group. Looking back to the ’90s, it’s easy to see where these values (and the millions of hours on Facebook) derived: This was the first generation told they could change the world with collective action. Think of the first recycling programs, Sesame Street, and the drive for equality and diversity expressed through crayon-scribed graphics of communities linked hand-in-hand. Quite simply for Millennials, “teamwork makes the dream work.”

David Burstein, author of “Fast Future, How the Millennial Generation is Shaping Our World” writes, “They see the world from a values perspective — reaching Millennials requires a real investment [from brands and organizations] in social responsibility.”

If that is true, one can surmise that authenticity is critical across all brand efforts and initiatives. This is a savvy consumer, and to show a genuine interest in supporting their passions, validating their interests, and helping them come together — the investment must look sizable to feel real.

There is no better touchpoint for Millennial-focused brands than real retail space.

Lululemon is a great example of how a retail brand has found success in using physical space to validate and support customers and give that culture a home. Now the third most profitable retailer (behind only Apple and Tiffany & Co), bringing in a tremendous $1,936 of sales per square foot in 2012, Lululemon stores offer not only great products but are also temples of yoga. At each location, Lululemon moves products aside, unrolls yoga mats thus transforming their retail space into instant yoga studios. Classes are complimentary to everyone in the community. During store hours you’ll find bright, energetic yoga fans behind the counter (and sometimes even doing yoga in the window). These are much more than sales people, they are brand ambassadors and highly knowledgeable about both the exercise and Lululemon products.

These investments have not only resulted in a loyal following of shoppers, but have allowed the brand to expand their offering into running, and Lululemon now owns the broader “sweat culture.” As of February, Lululemon has opened or acquired over 210 stores in North America and Australia and in 2012, launched 27 stores.

A similar strategy is working for a much less sexy retailer, Duane Reade. In 2009, Duane Reade was just another drug store struggling to compete in a crowded marketplace, giving their customers no reason to choose them over CVS or Rite Aid or other local drug stores.

But the brand realized its most unique offering against the big national chains was its New York heritage. Unveiling the tagline “New York Living Made Easy,” Duane Reade redesigned stores with a focus on New York residents. Each major location was overhauled with bright new shelving, more organized departments and a cleaner look and feel. Flagship stores also offer unique, neighborhood-specific services.

In the Financial District, beauty consultants cater to the droves of young female professionals who work in the area. On Bedford Avenue in Williamsburg, you’ll find a walk-in beer fridge complete with growler tap. This investment in localized offerings echo just what Millennials are looking for: a reflection of their specific interests, and recognition of their needs.

The location-specific design reflects a brand that understands the challenges of living in New York better than the competition. Sales of private label products have doubled and Duane Reade continues to be the preferred drugstore destination of New Yorkers.

We’re now seeing smaller brands build culture into their retail offering, or build retail to expand their cultural impact. Chobani has invested in their very own boutique retail space in New York. The new Chobani Store in SoHo offers yogurt-lovers unique yogurt creations in elegant glass containers, and perhaps more importantly, they’ve given yogurt lovers a place to flock.

Given the company is the leading seller of Greek yogurt in the U.S., one might ask why a retail space was necessary. But for Chobani (who are losing ground to the marketing powerhouse of Dannon and its Oikos Greek yogurt brand) this was more a brand-driven decision that will help them own the Greek yogurt space.

If Chobani can support and validate yogurt culture (no pun intended), any brand can do the same around their offering.

In a quest to build deeper relationships with consumers, retailers must think beyond tactical, clichéd ideas of ‘convenience’ and ‘personalization.’ These efforts may capture minds, but will not capture hearts. It is through supporting and validating customers’ identities that brands can make their product sacred, their store a cathedral, and transform fickle Millennial consumers into retail evangelists.

Nate Dwyer is senior strategist at strategy-and-design brand consultancy Red Peak Branding, a unit of Red Peak Group.

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