As summer comes to a close, everyone is trading in their lawn chairs for office cubicles and flip-flops for loafers and dress shoes. Another telltale sign that summer is over – thanksgiving and holiday decorations are beginning to take priority on shelves in department stores nation wide. Unfortunately, many large-scale department store chains are not looking forward to what has historically been a prosperous time for the retail industry. Recently, brick and mortar retail stores have experienced a decrease in sales among Millennials. With the holidays around the corner, many companies are concerned they will not meet their holiday shopping quotas.
Why the shift in recent retail spending trends? Millennials are putting their money where it matters. With better interest rates on the rise, Millennials are opting to make more large-scale purchases like homes, cars and jewelry. This may not bode well for many retail stores unless they have a strong “value” play.
Based on these shopping trends, we can make three predictions for this upcoming holiday season:
- Retailers that effectively use Pinterest to tie pre-shopping to in-store shopping will drive incremental purchases and Millennial sharing
- Idea Brands that have a purpose will continue to take share
- Big Box Retailers like Target will start to capture Millennials who have had young children, as they are more time pressed and can not shop across as many specialty retailers as others in their peer group
Another key component to making this coming holiday season a success for retailers is to increase brand awareness among Millennials. To do this, retailers need to remember three simple things Millennials want: good bargains, to be treated well and to have a seamless shopping experience. Keep in mind; this experience is not limited to the brick and mortar retail store. It includes the experiences Millennials have before they arrive, while they are in the store and after they leave. The best retailers are integrating new technologies to make it all easier, faster and more enjoyable – right from their smart phone and computer.
It is estimated that Millennials spend approximately $600 billion annually. This estimate is projected to increase by 2020 when Millennials will represent at least 30 percent of all retail sales. However, despite their ability to spend money, Millennials are always on the lookout for a good bargain. In an interview for a market research report conducted by Accenture, one Millennial mentioned if she is unable use her coupon in the store, she will walk out without purchasing anything.
One of the biggest concerns of the retail industry is that Millennials no longer have strong loyalties to one particular brand. However, dependent on the shopping experience, Millennials are still very prone to developing loyal relationships with retail providers. Millennial customers value a shopping experience that is tailored specifically to them. They want to walk into a store and be asked how they are doing and have their needs and wants met immediately. Personalized coupons and emails are also powerful ways Millennials feel connected to a retail brand.
Online shopping has become a huge force in the retail industry and the use of smart phones has changed the way Millennials shop. Now, Millennials want to find a good deal online, purchase the product in the store and scan their coupon on their phone at check out. This integration of online mobile shopping and retail stores has lead to a new generation of shoppers who value a shopping experience that can be accessed through a variety of different channels.
Millennials are becoming alpha-influencers and are setting the trends for retail shopping. As the holiday season quickly approaches retail industries need to take advantage of a still loyal population and market directly to their Millennial customers in an engaging and seamless way.
Leah Swartz contributed to writing this post.
Photo Credit: Matthew Kenwrick via Flickr