Appealing to Gen Y Shoppers
Increasingly, people are endlessly fascinated by the traits, values, work habits and shopping patterns of millennials, also called Generation Y. Why is all this attention being paid to people born between the early 1980s and 2000s? It’s quite simple: They are a generation of influence, in numbers similar to that of baby boomers, but with an outlook unlike one we have ever seen.
According to Javelin Strategy & Research, by 2015, Gen Y income is projected to exceed that of boomers. Making a Gen Y’er your customer — and just as importantly, keeping them engaged in your brand — calls for a completely fresh approach.
To better understand the millennial, you need to think about the technology-rich world in which they grew up. Research from Junco and Mastrodicasa notes that, of college students born between 1983 and 1992, a whopping 97% own a computer; 94% have their own cell phone; and 76% “IM,” or instant message, each other. And, 92% of those messaging do so while multitasking.
So, what do Gen Y shoppers crave when it’s time to put their purchase power to use? The exact opposite of what has become part of their typical day-to-day: a “live experience.” By that I mean a memorable experience filled with sight, touch, sound and sense, allowing them to interact with much more than a finger on glass.
A millennial seeks out animation and connection, not the static input of looking through a window at a display or staring at a screen. (They do enough of that already.) They can shop online and browse with the click of a mouse, which is all the more reason why they enjoy visiting a store, as long as the retailer makes it a sensory experience that speaks to, not at, them.
Gen Y shoppers have already dramatically changed the retail landscape. Many retailers are finding that 300 to 400 stores are not needed. Instead, the focus is on key locations that build awareness of, and an experience around, their brand. The strategy is one of quality rather than quantity.
How do you know, from a design perspective, that you’ve accomplished this goal? Here is a great example: A shopper walks into H&M on 5th Avenue in Manhattan and is immediately immersed in a happening lifestyle. Vignettes of lounge-like installations beckon shoppers to gather and socialize. These public spaces create a sense of place and give off an infectious vibe and energy that targets the Gen Y shopper. With its bright lights and upbeat music, H&M has created fast-moving “fast fashion” at its finest.
Space Ninety 8
Urban Outfitters’ Space Ninety 8 store in Williamsburg, Brooklyn, speaks eloquently to Gen Y’ers. Urban Outfitters has gone beyond the usual mix of apparel and keyed into the people who live in the surrounding neighborhood and their specific interests.
The first floor is a flexible retail gallery, continually changing and carefully curated. On my first visit, the space featured a bike shop with cutting-edge rides, hip accessories and even repair kits. Nearby was a collection of locally made items from Brooklyn craftsmen and old vinyl records. On my second visit, not even a month later, the space had totally changed.
In other touches that show Urban Outfitters gets its audience, Space Ninety 8 has areas to charge cell phones, a bar and restaurant to keep the shopper immersed in the experience. It’s not just real estate; it’s a place to come together and hang out with friends. You may never want to leave, and that’s the whole point.
While an entirely different feel, Anthropologie (another Urban Outfitters brand) has also keyed in to Gen Y’s needs. The store’s visual merchandisers often have art degrees or are in school studying fine arts. Items are not displayed on the wall. They are artfully arranged, creating their version of a modern bazaar.
Rich materials, forms and colors set a tone, complementing the handmade pieces, apparel and housewares, and tying together the brand’s story. While there is an overarching vision, each location is local to the neighborhood and unique in its own right. This tactile experience is the antithesis of the digital world and draws the millennial back to a time of simplicity and discovery.
Though the aesthetics or brand vision of each of these examples may vary, they all have one very important thing in common: They tap into Gen Y’s under-met need for live, sensory input. With a little extra thought and design consideration, today’s retailer can meet this group’s needs well — both now and in the near future.
David Ashen is a principal and the founder of dash design, a New York City-based interior design and branding firm specializing in retail and hospitality projects.
The Touch, the Feel of Cotton On
Aussie apparel brand Cotton On is as much about fun-fashion as it is about fast-fashion. The Geelong, Victoria-based brand operates more stores in the United States (124) than Zara and Uniqlo combined, and is an international behemoth with more than 1,300 stores operating globally under 10 different banners, including the 522-unit Cotton On, Cotton Body, Cotton On Kids, FREE by Cotton On and Rubi Shoes.
Growth has been fast and strategic, but peppered with humor, optimism and the occasional dose of controversy. Overseas, Cotton On makes headlines for suggestive or controversial slogans, garners press for unorthodox expansion strategies and pushes its message through strong social media tactics. While the brand may be a little quieter here in the United States, the Aussie optimism and sense of fun are still in full view.
Chain Store Age senior editor Katherine Boccaccio talked with Cotton On general manager Felicity McGahan about the company’s unique approach to expansion — focusing on opening stores in smaller cities or outside major shopping districts as opposed to establishing large flagships in big markets — and how it plans to play to the American consumer.
In short, what is the Cotton On story?
Cotton On was founded in 1991 by Nigel Austin, a young 20-something guy from Geelong, who got his start by selling denim jackets out of his car at the local markets. Now, Cotton On is in 17 countries around the world. Nigel still owns the business and is very actively involved in the day-to-day of all aspects of the business.
We like to think that we are exporting the quintessential Australian optimism and positivity around the world, wherever our Cotton On stores are. We offer effortlessly cool and quality on-trend fashion — what everyone wants to wear now — at the best price. We’re a very relaxed and laid-back brand, which is reflective of the Australian lifestyle. We are committed to creating a healthy and balanced workplace; in our Geelong headquarters, we have a “bring your dog to work” policy, a gym with personal trainers and a cafe with a focus on healthy food on-site.
Our customers want the must-have fashion and they want it at a great price, and that’s what we deliver. With monthly seasonal in-store drops, our product is always new and fresh, and we can keep up with the latest trend and what’s hot now and make it accessible for our customer.
How does your real estate strategy differ from others in the fast-fashion space?
We already have more than 100 stores in the United States, and we plan to grow organically as the brand gains recognition. Our strategy is significantly different than others in the same space. We haven’t been the brand to open a flagship in the main shopping districts and put a multimillion dollar marketing push behind it. We’ve entered markets that make sense for our customer. Many of our shoppers are exposed to the brand via social rather than traditional marketing and advertising channels.
How does Cotton On differentiate itself from competitors?
Cotton On is proudly an Australian brand, and our products reflect the Australian lifestyle. We offer the latest on-trend styles that everyone wants, at an accessible price point. We like to think that we’re taking our Australian effortlessly cool style to our customers all around the globe.
How would you describe the company culture?
We pride ourselves on being positive and optimistic, yet in true Aussie style, we’re also hard working, and we’re not afraid to roll up our sleeves and work hard on any project. The company culture still feels very much like a family business.
What is your typical store footprint?
It is hard to define a typical store footprint, as our stores can vary from 150 square meters (1,614 sq. ft.) to up to 2,000 square meters (21,528 sq. ft.) for our multi-branded mega concept stores (which showcase a mix of our Cotton On Group brands).
In the United States, our typical store footprint is about 2,100 sq. ft. to 2,600 sq. ft. However, our average typical footprint is growing as we start shifting from small stand-alone stores to large-format stores.
What key design elements underscore the Cotton On brand?
We always ensure our stores are open with bright shopfronts, to reflect the brand’s optimism and make them feel more inviting. We start with a clean base with a mix of brick, wood and concrete finishes, which allows our visual-merchandising set-ups to be dominant, bold, confident and colorful. We also always try to maintain a balance in our store environment between the Aussie relaxed style, with modern on-trend updates.
How important is technology to Cotton On’s success?
Technology is a very important tool for us to ensure we can remain successful in the retail world. We’re always looking for new technology, which will allow us to engage with our customers in different ways. We always want to remain customer-focused, and technology allows our customer to dictate when and how they want to interact with us — so we must always be implementing fun and engaging initiatives (such as our app and our recently launched Augmented Reality window campaign) to make sure we achieve this.
Digital and social also play a huge role in the way we share content, reach our customers and engage on new levels. We have established some brilliant relationships with key fashion bloggers from around the world who can connect with our customers and help share our brand story.
Technology also provides us new ways to engage with our customers in-store too, with the introduction of digital screens in some locations.
The opportunities that technology brings are limitless, and we’re very excited and committed to staying on top of these advances to ensure we’re always engaging with our customers in new ways.
How would you describe your leadership style, and who has most influenced how you lead?
Our leadership style is modeled on six pillars: resilience, integrity, results-driven, resourceful, inspiring and visionary, and I would like to think I lead in a way that reflects these characteristics. I am extremely fortunate to be mentored and inspired by our founder and owner Nigel Austin. He is an extraordinary leader, and every day I learn something new from him. He constantly inspires and challenges me (and many others in our business), and he has certainly influenced the way I lead my team.
The Sleepless CFO
Broadening responsibilities at a business brings with it an exponential increase in worries. And retail is no exception. As CFOs have become more forward-looking and strategic, their concerns have grown beyond retail basics to also encompass such issues as growing competition, data security, regulatory affairs, global economic health and globalization.
“From an external standpoint, CFOs have resurgent economic worries about weak growth rates, slow job growth and the ripple effect on consumer demand, and regulations from both federal and state governments,” said Alison Paul, vice chairman and U.S. retail and distribution leader, Deloitte LLP. “From an internal standpoint, CFOs are concerned about brand strength in light of increasing competition as well as cyber crime and data breaches.”
The growing number of channels available to shoppers to obtain goods, and how best to utilize or defend against them, is another big worry. “The Internet has to be the first and foremost concern,” said Al Ferrara, a partner and leader of BDO’s Retail and Consumer Products Practice, Melville, N.Y.
While some believe that globalization is not much of a factor right now, that may change.
“With a growing middle class, we’re seeing tremendous opportunities globally, in some cases more than in North America,” says Bob Comeau, a principal with Deloitte Consulting LLP, McLean, Virginia. Capital investment and repatriation will also be on the CFO’s plate, he noted.
Increasingly, data security is becoming an ongoing concern — and in some cases, a nightmare — that causes many a CFO to toss and turn at night. Even if IT doesn’t report to the CFO, losses suffered from a breach will be the CFO’s next worry.
And of course, all CFOs must worry about the future.
“Am I contemporary enough? Have I learned something new? A good CFO asks those questions,” said Les Berglass, chairman and CEO of executive search firm Berglass+Associates, New York City.