If you’re in the industry, you know that retail has a serious millennial problem (and obsession). The result of being the first digitally native generation, millennials consumer behaviour has thrown traditional retail processes out the window. They are a demanding consumer who want luxury yet value, they want technology driven self-service yet personalised curated experiences. They want retailers to enable their shopping processes instead of forcing systems onto them – aka they want it when they want it, how they want it and where they want it.
We are currently on the runway to a complete generational shift. According to Roy Morgan Research, Gen X, Boomers and Pre-Boomers currently make up 59% of the Australian population whereas Gen Y, Z and Alpha make up just 41%. However, come 2024 there will be a tipping point. This is the forecasted year where Gen Y, Z & Alpha will surpass X, Boomers and Pre-Boomers generations and make up the largest percentage of the Australian population.
“One consequence of this evolution is that the retail environment will probably change faster than many companies expect in the coming years, and many retailers will find themselves falling further and further behind.” – Accenture Digital
Why is this SUCH a problem?
The issue is that retailers need to adjust their strategic plans in order to accommodate for these younger generations. A large portion of retailers acknowledge that they need to change, however, this is a typical case of “it’s not what you say it’s what you do.” You can claim to be “consumer centric” but unless your organisational structure and processes allow for holistic consumer centricity, you won’t see results.
The conundrum that we see time and time again is that retailers want to implement new strategies in order to accommodate for the generational shift yet are restricted by internal business pressures such as staff KPI’s or demands for sales results. At the end of the day, true business transformation requires retailers to make profound changes across their entire network, a timely and typically costly process that not all companies are willing to endeavour.
Who IS getting it right?
Some retailers are failing to adapt to the changing retail environment, yet some companies are flourishing in this new millennial dominated era. To see who is doing it right and how check out the two case studies below of extremely successful businesses who are run by millennials for millennials. To say the least, they just get it.
Launching in 2010, Glossier is a cult beauty brand built by Emily Weiss off the back of her successful blog ‘Into The Gloss.’ The community she fostered and her business approach demystified a lot of aspects of the traditional beauty industry.
What have they done right?
- The brand is genuine & relatable – focusing on “democratising beauty” with the mantra “you don’t have to be a beauty expert, you just have to be yourself”
- Alluring visual identity – packaging has been meticulously designed to be “instagrammable” and to appeal to the millennial (aesthetically driven) consumer
- Consumer Engagement – through Into The Gloss blog, consumer generated content and involving their consumers within the NPD process
- Technology integration – Frictionless, you can even facetime their Glossier Reps for advice and product testing
- Demand – through scarcity, limiting product skus and maintaining strict distribution channels (keeping the brand sharp)
- New New New – New product releases every 2-3 months to keep them current and enticing
2. Gentle Monster
Gentle Monster is a high-end Korean eyewear brand started by Hankook Kim in 2011. Their core values are rooted in “purity of design, radical experimentation and cutting-edge technology.” The brands conceptual seasonal collections explore architecture, art and philosophy and their sculptural sunglasses are created from an array of unconventional materials such as acetate and titanium.
What have they done right?
- Understanding the importance of experience: They don’t just push product, they understand that their millennial consumers love highly visual and sensorial experiences and make their stores more like art galleries
- Continuously ahead of the market: Kim focuses on always thinking about the next big consumer trend “brands should not think of newness from their own perspectives, but always approach it from the understanding of the consumer”
- Optimised influencers : Using pop-culture to grow the brand, engaging Korean Pop Culture icons for promotion
- Quality: High quality materials with their own factories so quality can be tightly regulated
The shifting dominance of the millennial generation is no doubt being felt by retailers on an international scale. However, these benchmarks go to show that if you’re completely committed to transforming your business and taking a consumer centric approach, your business can flourish.