Who are millennials and why is everyone complaining about how they are ruining the retail industry? Millennials are people born between 1982 and 1996. This group, also known as Generation Y, has been forged in the fire of the internet. With 80 million of them in the United States alone, this group of 21 to 35-year-olds makes up the largest generation in U.S. history- and the most negatively stereotyped compared to others.
As they reach their prime working (and spending) years, millennials have gained a bad rap for being lazy and entitled individuals. While growing up in The Great Recession, millennials are stuck with student loan debt and are said to make about $2,000 less per year than college grads in 1980. They are classified as frugal, smartphone-obsessed individuals who will do whatever it takes for an Instagram like, but can’t afford to pay off their credit card bills or keep up with rent. With that said, this “ignorant” age group is still spending money (A LOT of it) and completely changing the game when it comes to your grandmother’s brick and mortar retail.
It’s all about an “experience”
Millennials are the most sophisticated cohort of consumers and have therefore changed the rules for brand marketing and creating unique retail experiences. Some would argue that e-commerce is to blame for completely turning the brick and mortar world upside down, however, most millennials make their purchases offline. A new report from behavioral marketing firm, SmarterHQ, suggests that 50% of millennials prefer shopping in brick and mortar stores over shopping online. In order to appeal to this generation, retailers are needing to get creative and offer today’s consumer an experience they won’t find on the internet.
By forcing retailers to attract consumers in these innovative and more experiential ways, tried and true stores such as the GAP and The Limited have closed over 80 locations in 2018, while retailers such as Sephora and lululemon have increased sales. Sephora, a retailer with a huge online presence, offers such a unique in-store experience that they are thriving amongst this retail “crisis.” In fact, in 2015, Sephora opened their first “Innovation Lab” in a converted warehouse in San Francisco. The goal of this store was to experiment with ways to combine mobile apps and in-store shopping into a cohesive and fun shopping experience. These efforts have resulted in stores like the one at Herald Square in New York City, which allow customers to have as little or as much interaction with staff as they please.
In addition, marketing campaigns and brand driven events attract millennials seeking a social shopping experience. For example, lululemon, a Canadian athletic apparel company with over 500 locations in the U.S., prides itself on its promotion of a healthy lifestyle by offering classes and events in the community to create brand awareness. In Philadelphia specifically, the lululemon team created an 8K virtual road race, which donated all proceeds to a local charity to help combat homelessness. After one year of extreme success across the entire brand, the race took place in 15 cities the following year. These types of interactive branding techniques, which give individuals a sense of exclusivity, uniqueness, and social importance, are completely changing the way a consumer interprets a retail brand.
Not only is this generation making apparel and soft goods retailers think outside of the box, they are also changing the way Americans socialize and gain experiences in general (yes, they look up from their smartphones every once in a while). Millennials value unique activities, which is why they are always posting photos of their whereabouts and allowing their friends to know where they are located on the popular application, Snapchat. Just about anyone ages 21 to 35 can open their various social media channels on a weekend and see who got #highonsweat @ SoulCycleRHSQ, or who had a blast with the #crew @ Spin Philadelphia. Although this generation can be called lazy, they are always looking for the coolest new activity, such as working up a sweat in a grueling OrangeTheory Fitness class, axe throwing at Urban Axes, or playing a round of virtual golf at Golf Social. With the infiltration of social media into everyday norms, millennials have created a craze for a whole new type of retail experience driven by entertainment, changing the small shop and F&B industry as we so knew it.
Despite Gen Y’s financial hardships and today’s evolving technologies, smart brands are adapting their businesses to get a piece of their buying power, which is quickly surpassing the generations before theirs. Although millennials have pioneered this change, brands embracing customer focused, unique, and experiential retail will attract consumers across generations, keeping the world of retail alive and well.
But MSC Retail doesn’t stop there. We recently rolled out a digital tour book that is displayed directly on a mobile tablet. We reinvented the cumbersome paper tour books with a progressive digital copy that is convenient, interactive and environmentally-friendly. This allows the user to effortlessly scroll through opportunities, take notes electronically, highlight key demographic statistics and save, print and forward the digital tour book directly from the tablet. We have not closed the door on traditional paper tour books, but we have received nothing but positive feedback from our clients regarding the digital versions.
Although it can be overwhelming trying to keep up with emerging technologies, taking advantage of those that elevate both your level of professional expertise and the customer experience are beneficial to a successful career in any industry. The hardworking MSC Retail team is continuously striving to raise the bar of what a full service brokerage firm can accomplish. Come find out what’s in store.