Before I joined RICS, I worked on the communications team at Nike, where a big part of my job was cracking the code on our target consumer: the Millennial woman, and understanding how to market to her.
To understand her, I had to look holistically at how millennials spend their money. This meant breaking down what mattered to them, and how their shopping preferences would affect Nike’s business.
I quickly learned that consumer shopping habits are constantly changing, creating new challenges in the retail marketplace. But here’s the thing… this also means new opportunities for you as an independent retailer to drive more business.
Simply put, to stay competitive and achieve success, independent retailers must embrace the ever-evolving consumer expectations.
Adapting to How Millennials Spend Their Money
1. Create an Experience and They Will Come
Look around and the trend is clear: consumers today love experiences.
In fact, more than 78 percent of Millennials prefer to spend their money on experiences, rather than material things.
Major brands and retailers are taking note.
- Nike was one of the first on the experience bandwagon in 2014 when they launched Nike+ Run Club – a free run club complete with workouts and coaches – in select cities nationwide.
- Anthropologie has begun hosting in-store classes and workshops like a clinic on summer tablescaping or a workshop on creating the perfect skincare routine.
Bottom line: independent retailers should follow suit by creating their own in-store experiences as a means of connecting with the consumer. Not only is the valuable for your customer, but it creates an experience that Ecommerce can’t compete with.
2. Focus on Your Customer
Knowing your clients’ needs and interests will help you develop what that personalized experience looks like in your store.
For example, many of our partners with running stores are creating their own running events, clinics, and clubs. These experiences are a direct response to their clients’ interests (e.g. running) and this leads to more business.
My favorite quote from veteran independent retailer, Brian Jones:
“Not only do [participants] often become customers, but their friends and families do as well. They give us credibility and also serve as raving fans to the community at large.” – Brian Jones, Co-Owner of Michigan-based RICS Client Playmakers
3. Harness the Power of Technology
If you live on this planet, you know that we spend a lot of time on our phones.
In fact, according to a survey, the average smartphone user spends two hours a day on their device.
We know what you’re thinking: But before you panic about consumers today preferring to shop on their phones, you should know that more than 50% of Millennials actually prefer shopping in-store.
Yes, you read that right.
Today, in order to drive business from millennial shoppers, you must create a way for your store’s brick and mortar and online presences to live in harmony, rather than pitting them against one another.
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Ensure your stores online presence is cohesive and connected to your brick and mortar. This means both in look and feel, but also in the way you track inventory through your POS and inventory management system.
Don’t make the mistake of detaching your online and in-store presence. Whether you have an ecommerce website or your just on social media, consistency is key.
When your customer finds a pair of shoes they love on your website or via social media, they should be able to come in store to purchase them. If not, they’re going to leave frustrated.
How often does this happen? I’ll let the numbers speak for themselves:
- 2/3 of customers research a product online before going in-store to purchase
- 3 out of 4 customers who find online information useful are more likely to visit stores
- 22% of consumers will spend more at a store if digital channels are involved in the process
How can you ensure consistency? Utilize technology that allows you to centralize multiple inventories, without losing the ability to track sales from various sources to avoid this type of missed opportunity (Ps. RICS is great at this).
4. Deliver discounts
The numbers don’t lie, Millennials love discounts.
According to a recent survey of U.S. online shoppers, 55% aged 18 to 34 said they download coupons from coupon sites, compared to 38% ages 35-54 and 21% ages 54 and up.
While slashing your pricing isn’t always the smart or profitable option, you can get clever in how you deliver a good discount in a way that is beneficial for both parties.
Utilize customer data effectively to distribute coupons and discounts to top spenders, like Linda Shikany, owner of RICS client Marigold Clothing. This will increase customer loyalty and drive additional sales when the discount is redeemed.
Need more inspiration? RICS Client Heyday delivers an introductory 20% off coupon for customers who join their mailing list. This serves a dual purpose: effectively building their customer data arsenal for future marketing efforts while driving more sales.
While it’s impossible to compete with the endless aisles and discount pricing that Ecommerce has introduced, you can create a shopping experience that provides the most value through personalized attention, recommendations, knowledgeable staff, and an enjoyable atmosphere.
For Nike and independent retailers alike, how millennials spend their money creates new challenges to the retail marketplace.
But one thing is for sure, those who can understand these habits and integrate them into their strategy will come out on top.