May 23, 2016
If you read trade journals and newspapers, you start to get the feeling the future of retail may be dramatically shaped by two things: technology and the Millennials. If Walgreens is now located at the corner of Happy and Healthy, then future retail will soon live at the corner of Technology and Millennial. It pretty apparent that technology and Millennials go hand-in-hand.
Okay, I know, yet another blog musing on the affect Millennials may have on the future, but stick with me on this. So far, many of the predictions made about the Millennial’s impact have been surprisingly accurate.
Lately, retailers have been putting in a lot of effort to crack the Millennial code. With 80 million Millennials are starting to wield over $200 million in buying power, it’s probably time well spent.
Over the weekend, at a three-day retail and technology conference in Las Vegas known as ShopTalk, some of the leaders in retail discussed what they think is coming down the road for retail. Although traditional retail sales are shrinking, as brick-and-mortar stores give ground to online shopping, big retailers are working hard to revamp their business models to adjust to current and future market conditions. They understand that retail may change, but that they are capable of working successfully with a new set of rules.
They also recognize that Millennials still want a traditional retail experience, although they know now that it will be heavily influenced by technology. Gerald Storch, the CEO of Hudson’s Bay Company said, “…the future doesn’t belong to Internet-only companies. It belongs to customer-facing brands that meet the needs of the customer, however she wants it, whenever she wants. All companies will be Internet companies or they won’t be companies at all.”
Companies like Macy’s are spending millions of dollars to adjust their stores to reflect the tastes and style of Millennial shoppers. Their $400 million renovation of their flagship store includes a selfie-wall, wearables and other state-of-the-art technology. Macy’s is working to attract shoppers in their 20s and 30s with technology that includes a laser etching machine, 3D printing capabilities to produce jewelry and iPhone cases, a Fossil desk that lets shoppers build their own watch, and a photo booth that lets shoppers have their photos taken and have it printed into figurines that will create a 3-D selfie.
A recent report by Accenture, a technology service company, tries to define what Millennial shoppers want. Their study shows, surprisingly, that Millennials actually prefer to visit the store rather than to shop online. But, they’ll be quick to use their smart phone for comparison-shopping and checking product ratings. More importantly, they won’t hesitate to post ratings and reviews about the retailers they encounter. So creating a retail experience that focuses on value and customer service is absolutely critical.
The report also shows the Millennials, contrary to popular opinion, are loyal customers if they feel they’ve been treated right. Accenture also found that, while Millennials are masters of social media, it’s easy for retailers to misunderstand the relationship of social media and successfully marketing to Millennials. A “like” on Facebook may not carry as much weight to a Millennial shopper as negative buzz.
Attracting Millennials can also require stores to rethink their look and feel. A recent article in Restaurant Hospitality magazine pointed out that the look of a restaurant is as important as what’s being served. To that end, restaurants are revamping their look to be more open, with a high energy feel. They’re using “genuine” materials that include concrete, steel, and stone. Sustainability is important as well, so LED lighting and repurposed or recycled materials are often used. An article on small biz.com, The Surprising Thing Millennials Want From Retail Stores, suggests streamlining the décor, using a limited color palette, creating some resting space (like adding a couch), and appealing to all senses including sound and taste (this includes natural sounds, a breeze, and relaxing scents).
While, for Museum and institutional retail operations, these adjustments to meet the needs of a generation that’s just beginning to discover your store may seem like overkill, but it won’t be long before Millennials start to have more impact on your bottom line. If adjusting your sales operation and décor to attract younger shoppers isn’t in your immediate future, it should certainly be in your long-term plans.
As Accenture’s report points out, don’t forget that Millennials are also starting to transform the shopping behaviors of their parents. So, as the Millennials go, soon may go the Baby Boomers.
Patrick Mulcahy is the Director of Marketing for MSA