If there’s one thing you can say about retail, it’s that it doesn’t stand still. In my lifetime, I’ve seen the shift from small, specialist shops to huge hypermarkets and malls. I’ve witnessed the birth of e-tailing and watched its phenomenal growth. And I’ve seen all sorts of exciting technologies emerge – from augmented reality changing rooms to intelligent in-store apps.
So, what’s next?
The Millennial Attitude The next evolutional milestone is already well underway – and it’s driven by Millennials. That’s a generation whose retail spending is predicted to hit $1.4 trillion per year by 2020, accounting for about 30% of America’s total retail sales. So, it pays to take them seriously.
Millennials don’t play by the rules – they challenge and modify them. They’re individual, independent, social, and fickle. And that makes them extremely hard to win over. They shop where they want, when they want – and are reluctant to commit to brands. So much so that they’re redefining the whole concept of ownership.
The Millennial attitude makes sense. Why purchase an expensive prom dress when you can rent one? Or buy the latest blockbuster when you can borrow it in just a few clicks of your TV remote? Today, you can own almost anything you like instantly – without any commitment. You can stream your favorite chart hits instantly, rent uber-expensive designer handbags you could never afford to buy, be a gym member without a membership, rent wine glasses for a special occasion – you can even borrow a dog for the day.
How Retailers Can Succeed
While this is great for commitment-phobic Millennials, what does it mean for retailers? Especially when they’ve got other, more traditional consumers to still satisfy.
Well, for those retailers up for the challenge, it means change and opportunity. In short, they need to find ways to monetize these new buying experiences.
For example, rather than a pure sales strategy, retailers should look at opportunities to also rent their products. This could then create another opportunity – ex-rental products sold at discounted prices – just like outdoor apparel retailer Patagonia has done. Retailers should also use the Millennials’ desire for independence and individuality to their advantage – and thanks to today’s retail technologies, that’s easy.
With the right technology, retailers can target all of their shoppers with personalized retail messages, delivered through the right channel at the optimal time – and supported by the most appropriate business model. They can build a clearer picture of their consumers’ buying habits and use this to shape the shopping experience – and also to predict it. So, next time the world of retail undergoes a huge change or a demanding new generation comes along, retailers won’t be caught off guard – they’ll have the organizational flexibility to adapt quickly and embrace the new opportunity.
Gain more insight on engaging your commitment-phobic consumers. Read What Kind of Customer Experience Are Millennials (Gen-Y) Looking For?