One Segment – Different Millennials
Vast majority of the articles we come across tend to focus on the similarities the millennial segment exhibits… such as mobile-centric, omniscient grasp of prices & promotions, expectation of x-channel shopping experience, social influence, buying less cars, proponents of shared economy, environment friendly, higher degree of social responsibility, et al.
In reality this ultra-broad segment too exhibits ‘traditional traits’ of socio-economic dissimilarities
Accordingly, Retailers may find their greatest challenge in not just addressing millennials but a diversifying ‘no one size fits all’ strategy for the segment
Millennial segment comprises of a very broad age group (18-34 yr olds) falling under many different sub-types (explored in detail in another post)
There are the affluent types, student types, young family types, single types, urban types, suburbia types, budget-minded types, old-school types, online-only types, cash only-transaction types, cashless-transaction types, mega city types, small town types, conservative types…and the list goes on
Whilst majority of the Millennial segment may display some form of similar traits such as show-rooming & omniscient price comparisons; their actual buying behavior itself could vastly differ (purchasing power, frequency, etc.)
Millennials will grow up too…
There is no doubt that the millennial segment has ushered in plenty of lifestyle changes that retailers & service providers have to cater to, some temporary whilst others permanent
As an example, some of the lifestyle changes may have surfaced due to the relatively weak economic conditions, rising debts & unsteady job prospects over the last decade or so
But economic conditions for these individuals could stabilize…
Just because ride-sharing & recycled clothing is big amongst Millennials today doesn’t mean they wouldn’t buy cars or new clothes ever… although the way they purchase may evolve
Retailers would need to keep up with not only the ultra-broad millennial segment (& it’s broad sub-types) today but also plan for tomorrow especially keeping in tune with the localized socio-economic movements
Perhaps this may not be a challenge for niche uber-upmarket retailers who know their clientele & margins for years to come, but apply to most retailers serving a broad range of consumers
It is very easy to get lost into millennial-related articles, often accompanied by their broadly defined traits and actions today
There is also no doubt that many Retailers are intricately examining this segment very seriously, scrutinizing every piece of data & insights available to constantly tailor their products & services
In fact, one could argue the rise in demand for Data Scientists is loosely related to deeply understanding the buying patterns of this segment in times to come
3 Millennial specific Trends
1. Mobile is the Gateway
A recent Thanksgiving consumer trends survey from dunnhumby suggests that 21% of the surveyed millennials plan to purchase their groceries for their holiday meal using food delivery Apps such as Instacart, Google Express.
Of the surveyed, 16% said they’ll be using an online grocery delivery service such as Peapod, Amazon Fresh, BlueApron, etc. and thats just for the actual buying process (the rest presumably still prefer traditional shopping methods)
Apps such as Instagram, Snapchat & Pinterest are playing an increasing role in their pre-purchase decisions as well
So should retailers (grocers) be rushing to shift their entire shopper strategy to App based commerce & logistics and shut down their stores?
No! Instead retailers could turn to App-based commerce as a pure gateway into the loads of experience within it’s ‘brick & mortar’ footprint augmented with coupons, discounts and loyalty… all aided by modern connected technologies
2. We have a Basement
Retailers; particularly traditional mid-tier department stores could explore a hybrid model whereby they not only cater to their traditional clientele but also the millennials sub-types who are contributing to the rise in ‘recycled / used’ wares
These categories could include vintage fashion, wedding dresses, silverware, etc.
They could designate an area within the department store (basement perhaps) separate to their main floors in selected urban locations
The experience would most likely be tailored to this segment complete with a DJ, fast food spot, cafe or even a library
Retailers could look into hosting swap meets at this location where they get a cut from the sales, but at the same time promote the ‘recycled shared’ economy
Category could also be extended to handcrafted and local products that promote a community feel
As with natural life progression, it could be expected that Millennials shopping habits would change, but at least they could do so under the ‘same retailer’s roof’
3. We are social too…
Yes! millennials use social media a lot; but herein lies the complexities... some millennials choose to refrain from social media altogether, some constantly change their social media platform, some are agnostic whilst some others would readily jump on to every new platform introduced
Facebook may be popular yesterday, Snapchat today, and ‘insert platform’ tomorrow.
Then there is an understanding the way Millennials interact with Social Media
According to a global market research conducted by Accenture; contrary to the popular belief, millennials may actually be using social media purely to get deals & discounts rather than displaying their ‘loyalty’ towards the retailer
The same report also suggests 82% of millennials surveyed prefer to shop in ‘Brick & Mortar’, further strengthening the case for Social Media as one of the many ‘gateways’ to drive ‘local’ in-store transactions
It so happens that Social Media is one of the most effective bi-directional tool for retailers to leverage today
The myriad of social platforms can be used to keep an ‘open ear’ on the conversation, update in-store only specials, reciprocate to trends, requests and feedback… the question is… which one(s) provides the retailer with the best bang for buck?