Three Key Shifts in Consumer Attitude & Behavior
As the largest, most diverse generation ever, it’s impossible to predict the full impact millennials will have on the retail landscape.
Unlike their older counterparts, millennials are digital natives with preferences and behaviors continuing to shake up the retail world. This poses a quandary for retailers. In a highly competitive market, how can they engage millennials without alienating or “creeping out” older consumers?
Raised on computers, it’s unsurprising that the majority of millennials (58%) find it easy to shop on a mobile device, compared with just three in 10 Baby Boomers. So to win millennials’ loyalty, retailers clearly need a digital shopping platform that provides a seamless experience across different devices.
Yet, Accenture research also shows millennials displaying some less predictable consumer habits and attitudes, which likely reflects the variety of socioeconomic, educational and parenting trends in place while they were growing up. It also opens opportunities for retailers to attract a cross-generation of customers.
Personalization for those who desire it
Accenture research suggests that Millennials are more open to receiving advice than their older peers. And, retailers are trying around to meet this generational need through personalization – but older consumers find these methods to be “creepy,” or “cool.”
Imagine an associate at a home improvement store coming up to you with design suggestions that reflect your previous home improvement purchases. Or, you are attempting to buy a new tablet or laptop online, only to receive a pop-up advising you that the device you’re considering is outside your budget.
Most millennials (58%) think receiving design advice in-store would be “cool,” compared to just 30% of Baby Boomers. Forty-one percent of millennials feel receiving cautionary advice around potential purchases would be “cool,” compared to about one in four Baby Boomers who are much more likely to find such advice “creepy.”
Retailers can learn something important from this: Millennials would likely appreciate and find value in personalized advice about shopping, but they need to tailor that offer based on preference.
Not everyone prefers e-commerce
The majority of millennials (85%) shop online, compared with a more modest 70% of Baby Boomers. However, the picture is more nuanced than it may seem. It may well be second nature for millennials to research products online and read customer comments before making a purchase, but they are also more open to going to stores for the experience.
While most Baby Boomers (54%) would like to be able to check online to see whether the item they want is in stock before going to the store, surprisingly only 44% of millennials want that option. Similarly, 30% of millennials expect to make more purchases in store in the future, compared to just 19% of Baby Boomers.
Retailers therefore need to focus on the in-store experience as well as the digital to appeal to multiple generations. Additionally, retailers with stores have an opportunity to differentiate themselves from their online-only competitors.
Shoppers expect delivery options
Flexible fulfillment – whether curbside drop-offs, delivery on demand, or traditional home delivery – presents many technological and operational challenges. And, as millennials grow in financial confidence, we can expect these challenges to become even tougher.
Today, most Millennials (55%) say they are likely to use new fulfillment like “instacart” methods from retailers. This compares with 44% of Generation X consumers and 30% of Baby Boomers. For retailers, there’s a challenge on total cost of fulfillment and how this impacts margin.
With expectations around free shipping and free returns most retailers are showing less margin on digital purchase than store purchases. As e-commerce continues grow, retailers will have to be cognizant of their operational costs and how to protect their bottom line – which in today’s price-conscious and stockholder focused environment can prove to be challenging.