Comment: How technology is driving the millennial retail market
The evolution of e-commerce culture has particularly affected one demographic: the millennial. This collective term we hear about in today’s media and society is set to make up 75% of the working population by 2025. This represents a massive share of the retail market.
At the heart of the millennial’s modus operandi is consumption of technology. After all, this is the Facebook and Instagram generation, where owning the latest smartphone is akin to holding a higher social status. This obsession with technology among millennials is in turn influencing how retail sales are made all over the world.
This new generation of e-shoppers has incredible spending power that retailers need to recognize if they want to succeed. In fact, according to Forbes, millennials spend $600 billion annually. This accounts for 28% of all daily consumer spending, and this will rise to 35% by 2030.
We know that millennials hold great sway when it comes to retail sales, but what services do retailers need to deliver to capture millennial sales? What is the technology driving the millennial market?
In order to target millennials successfully, retailers have to go down the omnichannel route. This is important as it will support marketing strategies across all channels – including online and offline. Omnichannel is vital in capturing the millennial sale, as it can deliver personalized content to customers at the right place and at the right time. This can also be used to analyze key metrics such as store visit frequency, repeat visitors, customer retention and cross-store visits.
Linked to omnichannel is the growing popularity of click-and-collect. Put simply, the typical millennial mindset is one of instant gratification – an ‘I must have it now’ mindset. Step forward click-and-collect. This service enables stores to deliver better customer service by allowing consumers to place their order online and then collect in-store, a local shop or lockers. In the case of in-store pick-up, a notification can be sent to the enterprise’s picking systems when a click-and-collect consumer comes within a certain radius. This notification prompts staff to get the order ready. This is seamless retail in 2018.
A further area of growth driven by millennials is free returns. In fact, increasing numbers of e-commerce sales are accompanied with the offer of free returns to avoid unsure customers leaving with incomplete sales. Returns processing inevitably comes at a cost for retailers, impacting margins, so this element of omnichannel also rolls into that of click-and-collect in which one best practice methodology is to encourage customers to try out their goods on the spot, minimizing the risk of damage or loss and bringing forward any returns, thus minimizing the time stock is out of the inventory cycle. Some progressive retailers’ stores are increasingly being treated as extra warehouses, creating a single view of stock across the business wherever it sits, and often enabling shipping and receiving returns directly to the local outlet.
After the items are ordered, packaged and ready for collection, it’s time for payment. For millennials, the preferred method is mobile payments as they prefer not to carry cash. Retailers need to ensure mobile payments are at the forefront of their offering to engage with this specific audience.
About the author: Mark Thomson is director of retail and hospitality EMEA, Zebra Technologies.