What made you interested in researching millennials and their effect on the retail industry?
I wanted to see for myself what all the hype was about, and find out whether the myths were true. Two of my kids are considered millennials (defined by Accenture as born between 1980 and 2000). I watch them shop and it’s quite interesting. They know what they want, even if it is not what everyone else wants—which is very different from my generation (GEN X). Building on my own experiences and taking into consideration millennial interviews that Accenture conducted, I looked at what millennials want to be known for and how we can reach them as they evolve. What makes it most interesting now is that millennials are changing, they are growing up and starting to have families. And now we have GEN Z quickly approaching.
Tell us about GEN Z.
GEN Z includes those born after 2000, and amongst their many names, they have been coined as the “Homeland Generation.” The term’s origin stems from the period after September 11th when families felt safer at home and the name GEN Z lends itself to the fact that they enjoy spending leisure time at home. These individuals are often at home using multiple screens at once, maybe shopping online on their computer while watching streaming TV and using social media on their smart phone.
What are some of the generational differences you uncovered in your research?
Baby boomers don’t like personal shopping. However, millennials are almost twice as likely to think a personal shopper at a store is cool. Boomers are not as willing to share information to get discounts. As millennials begin to move away from their parents, rent goes up, the cost of food goes up, so their expenses are higher. They don’t have as much disposable income. They would rather go out with a friend and post the experience on social media than buy something material. GEN Z is even more frugal and focused on saving.
How do the generations differ when it comes to sharing information?
Privacy is a huge difference. Millennials see the exchange of information as a value-add to their life as long as a retailer reciprocates with a monetary award or an experience, like a makeover. They are willing to give their opinion, and they want someone to validate their opinions. They want to be heard and are less likely than boomers to want to remain anonymous. Remember, boomers grew up with just a few modes of communication, so life was more closed off. Now, retailers and companies are in our homes as “living things.” We are getting pinged at all angles as the Internet of Things (IoT) starts to become more prevalent.
Are there differences in terms of social interaction, such as receiving product recommendations from friends or others on social networks?
The generations are actually more similar than different in this way. Boomers are adapting to social media. They find it’s a neat experience to reconnect with a friend from high school online, especially as boomers become more sedentary. They like this newfound connection to the world, but they are more lurkers than sharers. Millennials are the sharers, and they like dialogue. Almost three times the number of millennials than boomers want feedback from their friends on items they are considering to buy.
Which generation holds the buying power?
Millennials have overtaken the boomers due to sheer numbers. Millennials have $245 trillion* in spending power. Through our research, we predict millennials will spend $1.4 trillion** annually by 2020. Older shoppers are on fixed incomes, they’re not working as much and their pockets have been hit by recession. Millennials are just reaching those peak earning years, but how they will choose to spend is unfolding.
What did you find most surprising in your research?
The biggest surprise was the trajectory that GEN Z is taking. They are more entrepreneurial, interested in pursuing their own businesses—they want to be their own bosses. They are more concerned about their future and taking action to protect it such as starting small side businesses while still in school (for example: lawn mowing services, cell phone repairs and creative design). They are saving money their money to have a nest egg versus assuming a job will be obtained right after of graduation. More earning power will ultimately wield them more buying power.
What should retailers do differently to appeal to millennials?
I think it’s important to make sure you are giving feedback when feedback is given. Loyalty is tough, so if someone takes time to respond to a survey or give feedback on products or experiences, a business should be driven to acknowledge the customer’s contribution and time. Connect the channels—store, online and call center—so that you are cohesively responding to a customer’s needs, and you know their story from the beginning. Your goods can be the best in the world, but someone can copy that. If you are going to win customers, it is going to be on service and on personalization. Thank customers and show you’ve heard them by providing curated content and products based on the feedback they have taken the time to give.
How do you predict the habits or preferences of millennials will change in the future?
We are seeing an increase in millennials as parents. The preferences and mindsets that have made millennials famous will influence new buying decisions for their next stage of life. Hence, we’ll see a need for more family restaurants that offer health-conscious and localized choices. We’ll see restaurants changing their décor to be more “instagrammable”. Convenience will be key. For instance, maybe a millennial can’t avoid going to store, but they’d like to shop and pay online, and know the product is waiting for them in store. Therefore, in-store pickup will be a benefit. Digital and physical worlds will increasingly mesh in retail—services will be designed to answer a customer need immediately.