With giants such as Amazon gaining an ever-stronger presence in the retail space, brick-and-mortar stores have a lot to be worried about. But a study conducted by Euclid, which surveys 1,500 consumers in the US, shows that it’s not all necessarily doom and gloom. In fact, the report finds that understanding current shopping habits, particularly those of millennials, may be the key to adapting retail brands and their marketing approach to current and future shoppers.
The report found three major trends in the retail space—the first being that new buying models, particularly subscription boxes, are changing the way consumers think about stores. Secondly, the millennial generation is turned off by traditional marketing and third, there’s a growing sense of channel agnosticism, meaning that shoppers are generally open to regularly using multiple channels.
To address these trends, the report explains that retailers need to reduce friction for shoppers while using a variety of channels to provide blended experiences to a broad group of consumers. Shoppers respond to creative, distinctive and playful offerings that differentiate brands from the competition.
Specifically, Euclid found that pop-up stores were effective at drawing in shoppers, and they work both within established retail spaces or as standalone locations. The former offers novelty that will enliven the brand for consumers. The fear of missing out acts as a strong driver for people to get out and go shopping. The study found that 38 percent of people who shopped online each week would check out a pop-up store. Additionally, 50 percent of subscription box users and 29 percent of traditional brick-and-mortar shoppers said the same.
“The concepts of personalization, convenience and connection are central to the millennial buyer—and that’s apparent in this demographic’s expectations, preferences and opinions on their retail experiences,” states the report.
Compared to Baby Boomers and Gen Xers, millennials are the most channel agnostic, and have no problem with switching between online and physical stores, or combining both, as their needs require. About one in three use a subscription service, showing a strong preference for this shopping model while most Boomers and Gen Xers still relied on in-store shopping.
There are two main drivers that get millennials out to stores, the first being group shopping with friends and family, indicating that the group seeks immersive and shared experiences. At the same time, millennials are far more likely to shop online to pick items up from the store for quick get-in/get-out experiences, which benefits retail brands that offer these services on their web pages or apps.
Additionally, millennials regard marketing as a turn-off, not a draw. According to the study, “Advertising isn’t a needle-mover for millennials the way it is for other generational demographics.”
For 53 percent of Baby Boomers and 40 percent of Gen Xers, an ad showing an item they want is enough to warrant a store visit, but less than a third of millennials said the same. Millennials also generally don’t care for email marketing, but that trend crosses generations, with about half of respondents from other groups stating that they would unsubscribe from a brand if they received too many messages.
In order to effectively reach millennials, brands need to offer a blend of technology, personalization and price. Price is the strongest motivating factor, and brands can couple digital coupons with outreach to establish millennial engagement. All three groups said that they would like to see stronger technology integration and curation to help them find the products that best serve their needs, suggesting that projects such as Alibaba’s New Retail Strategic Opportunities fund might have a future in the US.