How Technology is Leading Millennials Away from Brick and Mortar Stores
Over the last decade, the retail industry has seen a shift in how it operates. The exponential increase in online shopping has had a significant impact on how we buy our products. Long gone are the days when purchasing items was done from Monday to Saturday, between a rigid office-hours timescale.
The evolution of the e-commerce culture has particularly affected one demographic: the millennial. At the heart of the millennial’s modus operandi is the 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. According to Zebra’s Shopper Vision Study 2020, 75 percent of millennial shoppers indicated they shopped in a store and abandoned purchases only to end up buying the item online.
This new generation of e-shoppers has incredible spending power that retailers need to understand if they want to succeed. 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?
Service Demand Among Millennials
In order to target millennials successfully, retailers must go down the omnichannel route. This is important as it will support marketing strategies across all channels – including online and offline. A seamless omnichannel approach is vital to capture the millennial sale, as it can deliver personalized content and services to customers at the right place at the right time. The data that this approach generates can also be used to analyze key metrics such as store visit frequency, repeat visitors, basket size as well as customer retention and cross-channel visits.
The rise of omnichannel is most typified by 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 orders online and then collect in-store, a local shop or lockers. In the case of in-store pick-up, the store itself makes the ideal picking location and with location analytics, a notification can even 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. It’s seamless retailing.
Another 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. E-commerce has created a new retail reality in which where consumers expect unlimited returns, which has generated a substantial cost for retailers – estimated to be over $600 billion annually by the IHL Group.
Returns have long been a pain point for retailers and with e-commerce returns running over 3 times that of store purchase returns, retailers are actively looking for solutions. Linking this back to the click and collect aspect of omnichannel, we see 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 time stock is out of the inventory cycle. Some progressive retailers are using their stores 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. This is due to the demographic disinterest in carrying cash. Retailers need to ensure mobile payments are at the forefront of their offering to engage with this specific audience.
Driving Sales through IoT
Identifying the services that millennials desire is an easy enough task, but what technology is needed to deliver these? Managing the operation behind the shop front is a vital factor in retail strategy.
Central to the conversation here is the Internet of Things (IoT). And while much of the conversation surrounding IoT may seem like hyperbole, connected devices are not only the future, they are the now. Indeed, Zebra Technologies’ Intelligent Enterprise Index 2019 found nearly 86 percent of retail decision makers are expecting an increase in their IoT spend over the next two years.
The study also revealed that retailers are investing in IoT technologies — from beacons that beam shoppers customized coupons to radio frequency identification (RIFD) tags that track inventory — to simplify, enliven and customize the shopping experience, generate revenue, and reduce costs. They’re embracing IoT platforms to transform real-time, visibility-driven data throughout the supply chain into actionable insights.
Personalising the Customer Experience
Aside from IoT, machine learning is playing a vital role in targeting millennials. This technology utilizes analytics and predictive models to help retailers personalize customer experiences and enhance inventory demand, forecasting and visibility. The outcome is increased, repeat sales as well as great customer satisfaction. This latter point is vital in today’s digital age where millennials can post negative reviews if they feel they are getting short-changed on the high street.
The final powerful tech available to retailer is automation. This often involves the identification of areas where mundane tasks can be automated, freeing up staff to focus on customer service and sales tasks to improve conversions. This technology is vital for ensuring orders are shipped efficiently, inventories are tracked meticulously, in-store inventory levels can be monitored and customers can find their items. Automation could be described as the unsung hero in the retail mix.
The Future Checkout
Millennials - often defined as those born between 1982 and 1996 - make up the most influential key demographic in the growing retail industry. This means that retailers must give them what they want, when they want it. If not, the retailer does not have a sustainable business model. The way to achieve this 21st century challenge is to employ the right technology both in-store and in the back office. Failure to do this could see millennials shopping elsewhere.