Channeling Millennials: How to capture America’s largest spending demographic
We all know that Millennials have been one of 2018’s largest areas of focus. But who are they? How do they shop? What do they buy? As a Millennial myself, I know that we can be complex and almost hypocritical at times with our shopping behavior. We spend our hard-earned money on avocado toast, but we also rent our living space instead of owning it; we shop a high-low strategy, etc.
But as the largest shopper segment, it is critical that retailers adapt their strategies to meet Millennials’ needs, rather than expecting us to change our shopping behavior to meet theirs. In order to adapt, retailers must begin to understand who we are as individuals so they can begin to understand who we are as shoppers.
What retailers need to understand is most Millennials are just not retailer loyal. What we are, however, is brand loyal. Most of us have our favorite almond butter or type of ice cream that we just cannot live without, and we are willing to go to more than one place to ensure that we get what we want. And this doesn’t just hold true for grocery. Beauty is another prime example of a sector of business where Millennials are extremely loyal.
The truth is Millennials are about as complex of shoppers as they get, and if retailers can begin to understand us, then they will have tapped into one of the most powerful spending generations ever!
The Winning Formula
So how exactly do retailers win over this elusive set of shoppers? Is it price? Assortment? Promotions? Well, the answer is: all of the above.
The fact is Millennials want it all. We live in an age where we work outside the hours of 9 to 5, try to have an active lifestyle (which means hitting the gym as often as we can), maintain a jammed packed social life (from brunches to barre class), and have at least a little me time (hello, Netflix!). So when it comes to spending on items for ourselves, we crave an experience, with 72% of Millennials choosing an experience over a material item.
So retailers must transform their stores into the experience Millennials want. Instead of the typical grocery store, we want a place where we can buy fresh produce as well as wine and artisanal cheese. We seek a destination that allows us to make an outing out of an otherwise mundane task. Wandering the store aisles with a wine or beer in hand allows us to sip as we shop, which not only makes us happy, but keeps us in-store longer and will likely inspire a few extra items in our baskets.
Harnessing the Data
Retailers must also have the ability to curate assortments that speak to our needs. Digital-native Millennials, communicate, shop, and do just about everything online, which, in turn, creates a mass amount of data that is incredibly valuable for retailers.
Traditional brick-and-mortar retailers face the threat of digital giants like Amazon and other online pure plays that have endless online aisles for us to shop from the comfort of our couch and promise free two day shipping on almost any item. So to entice Millennials into the store, brick-and-mortar retailers need to optimize their assortments to speak to our needs to maintain store traffic and sales. Luckily, we provide all the breadcrumbs they need with our data. If a retailer can follow this path and have the right selection for the right customer and this is key — at the right time, then they may have a new millennial convert on their hands!
Playing Price is Right
So we know that assortment is critical, but what about price? Well, considering that our generation is the most debt-burdened in history, price does come into play. But not in the same way it may have for our parents.
Millennials are willing to pay for what we want (think $70 anti-aging skincare creams and $20 bottles of wine), but we do not want to pay high prices for the other necessities of life (such as private label toilet paper). If a retailer can grasp this and begin to price their products accordingly, then it can begin to build the Millennial shopper’s baskets.
The best way for a retailer to gather this type of information on how to price? Utilize the data on hand. Determine which products Millennials deem splurge-worthy and those that are simply must-haves. Follow those all-knowing breadcrumbs that we leave behind.
This leads us to the elusive promotions bucket, that proverbial Pandora’s box of issues. Do mass promotions work? What about personalized? Do Millennials even use direct mail? Or are we all digital? How do retailers reach their customers, but, more importantly, us millennial shoppers?
To begin, retailers should look into the numbers. Millennials are much more comfortable sharing data than previous generations. Given this, and our complete obsession with efficiency and saving time, it is imperative that retailers use the data available to them to speak to us in a way that breaks through our daily social media clutter. This does not just mean offers but all content.
Millennials have been trained over the years to expect a barrage of promotional emails, most of which we don’t open and probably send straight to spam. Where retailers can win is in retargeting. Make it easy for us. If I was online perusing my favorite athleisure store, a promoted Instagram post “reminding” me of what I looked at may just be the ticket to have me actually hit the purchase button. This is where retailers and brands will win. Understand your customer — not just their past purchase behavior — but their entire purchasing lifecycle, and react relevantly. Those who do will get very loyal customers in return — just ask my local Bluemercury.
Millennials have already surpassed Baby Boomers as the generation with the most disposable income. We also are delaying traditional “milestones,” such as buying homes and having babies, until later in life and, thus, have different shopping behaviors than previous generations. This shift in shopping and lifestyle has left retailers scratching their heads on how to reach us. The answer is simple: Retailers still need to focus on their core elements: assortment, price, and promotion but must use the data available to them to create Millennial-centric shopping experiences. Those who will win are those who are willing to take a step back and look at what drives us and what motivates us to spend. When done well, retailers will not only gain sales but loyal, avid shoppers, too.
Erika Donigan is North American marketing manager at emnos.
Being a retailer, it is necessary to adapt to the new strategies frequently. Need to do a detailed case study about what millennial's are looking for, what should the reasonable price you're offering, and many more. Later, executing the things properly will lead to more conversions.