Millennials are limiting visits to retailers this holiday season thanks to a growing affinity for experiential items such as travel and entertainment. Rather than spending money on items found on a shelf, Millennials are going after experiences that will provide them with exposure to new things and personal fulfillment.
According to PwC, shoppers intend to spend almost half of their total holiday budgets on experiential purchases this year. These types of purchases are also the gifts they want to receive. In fact, physical gifts such as apparel and gadgets ranked last in their overall gift preference.
While this seems to bode unwell for retail brands that rely predominantly on tangible items, there is still an opportunity for them to resonate with consumers – by offering their own unique, interactive experiences.
From our extensive research into the Millennial generation, we know that they value experiences over material things. In fact, three in four Millennials would rather pay for an experience than a product. This has led to the current experience economy we live in, which Millennials fuel. As outlined in our Millennial Mindset™ report, there is a new paradigm that exists for brands today rooted in co-creation, co-participation and experience innovation. With an affinity for personal growth and reinvention unseen from prior generations, Millennials want more control over their customer journeys and touch points with organizations.
To get Millennial shoppers into stores or spending online this holiday season, brands will need to create a unique experience within their Brand Authority that allows consumers to be participatory and make connections, one worthy of getting them to spend both their valuable time and money. Brands should not focus purely on an attempt to sell products by offering these experiences, but rather on an attempt to build relationships with consumers in an authentic way. This will encourage Brand Love and lead to loyalty in the future.
This will also lead to the positive proliferation of a brand’s experiential currency. In today’s market, Millennial consumers sharing anything and everything on social media to build their online image and sense of self. They aren’t shy to write reviews or share their thoughts on the brands and products they’ve tried. The brands that offer them the experiences and the interactions that they seek are the ones that benefit, as information about the brand’s products and services are then spread among a variety of social peer networks.
These social peer networks aren’t limited to strictly social media platforms, either. They stretch to Millennials’ close personal connections – from mom and dad, to best friends, to neighbors, to co-workers. These expanded networks are where consumers seek advice, opinions and recommendations prior to making any of their purchase decisions. This makes these networks remarkably important when a brand can successfully leverage their power, as it will lead to greater resonance among a larger number of consumers.
Nike is one great example of a brand finding success because of experiential offerings, with The Webby Awards naming the brand as an honoree this year for its digital retail experience. The experience combines brick-and-mortar, ecommerce and mobile customer journeys in a seamless fashion to allow customers to constantly be on the cusp of innovation. They get it all, from customizing gear, to getting pro tips for training, to understanding the look and feel of various materials, to making friends and extending networks – online or off. Additionally, specific store locations have been updated and expanded to reflect and offer insight into the local culture (e.g., Nike Chicago), another high resonance point with Millennials.
Coincidence that the Nike brand ranks as No. 3 on Moosylvania’s “The Top 100 Millennial Brands” study? We think not.
The bottom line is that it won’t be enough for brands to follow the same traditional rules when it comes to retail. Cool, innovative products alone are not enough. To attract Millennials to the sector during the holidays and beyond, brands must be present in the experience economy and offer the unique experiences that Millennials crave.