Millenials represent a huge audience that is getting bigger and bigger in terms of their retail spending impact. Accenture, in a recent report, estimates millenials represent $600 billion of retail spend, and they expect that amount to grow considerably over the next 5 to 10 years, ultimately reaching $1.4 trillion in spend.
Millenials are the first digital generation, but that doesn’t mean they are online only or completely influenced by what they see on social media. Here are a few of the key takeaways from Accenture’s comprehensive millenial survey:
- They demand a customer-centric shopping experience. In describing the ideal shopping experience, a millennial said, “There is [something] about the product and its cost, but there’s also a big part about being treated like a valued customer.”
- On social media, “likes” don’t really mean much. millenials said they don’t look to engage with retailers on social media except when brands are part of a story that they find funny, heartwarming, or otherwise positive.
- Millenials are not only transforming their own shopping habits, they are influencing their parents’ generation and causing them to change how they shop. This magnifies how big of a retail impact their approach to shopping is having.
As a result of these and other key behaviors, Accenture predicts retail will change more in the next 5 to 10 years than it has over the past 50.
How can retailers respond to these demands? We agree with many of Accenture’s conclusions. Retailers need to become more customer centric and personalized, and also provide a “memorable experience.” Kissmetrics has added its voice to this question in a recent article which makes 5 suggestions. Some are similar to Accenture’s conclusions, but a couple veer off of the insights Accenture has derived. The basics: 1) Have E-commerce; 2) Be optimized for mobile and tablet; 3) Make social sharing easy; and 4) Create content that is targeted at this group of people.
The last suggestion is around coupons and discounting. Kiss thinks its critical for millenials. Accenture’s research seems to suggest that millenials, like anyone, like a deal, but they are not as “deal oriented” maybe as older generations. They care more about stories.
In many ways, what millenials are asking for is a reaction to the Walmartization of retail over the past 30 years. They want the treatment their grandparents’ generation got from small retailers 50 years ago. They want personal experiences, great service, and to have “a single conversation” with the brand.
The difference, of course, is that the number of communication and sales platforms is now 20x what it was 50 years ago. A single conversation back then happened in a single retail location. Now, retailers have customer engagements in many different online and offline places. Millenials and other shoppers are demanding retailers know about all of those interactions and act accordingly.
What we think Accenture misses in its conclusions is that retailers need to engage with customers in a more human way, as well. If you are only sending an offer or a deal, even if it’s a personalized one, then millenials won’t feel they’ve received the “memorable” treatment they crave.
The rise of smaller brands, Etsy shops, and the like, is driven by millenials and like-minded shoppers seeking a more intimate relationship with brands and retailers. They expect these brands to have a human conversation with them – not a data-optimized one.
As these retailers get bigger, they don’t want to lose that 1-to-1 conversation ability. They too can use simplified technology to help manage this data, organize it, and keep a conversation going with millenials when they come knocking. That’s been our mission at Lumiary from the beginning: to help small and midsize brands have better customer relationships by leveraging simple technology as they grow.