23 Jul How to Appeal to Millennials in Retail? Focus on the Spendsetters (2021)
Even as millennials age well into adulthood, many brands still struggle with learning how to appeal to them.
From attempts at socially conscious advertising that falls flat (and fails to gain any ground with millennials), to massive investments into “experiential” marketing that has dubious ROI — as millennial income increases, the retail apocalypse seems to continue its march.
So how can legacy retailers appeal to millennials?
The trick isn’t to appeal to all of them. You only need to understand the spendsetters — and the rest of the millennials will follow.
Spendsetters are the early adopters of the millennial population. They have strong standards, and set the bar for the rest of the spending population. They embrace, and sometimes demand, new solutions driven by emerging technology.
While the term spendsetter isn’t age-specific (it reflects the lifestyle and shopping habits of a group) — a whopping 52% of millennials belong to the spendesetter category as of 2021. In other words, if you want to capture the millennial market, you need to appeal to their spendsetters.
Millennial Spendsetter Preferences and Defining Characteristics
According to a survey by Adyen:
- 42% of Spendsetters would rather not walk into your store
- 45% of Spendsetters want to believe in your brand’s value proposition, and will pay more for premium experiences
- 80% of Spendsetters aren’t afraid of using digital wallets to pay you
- 86% of Spendsetters will leave your store if the line up is too long
Who Are Millennial Spendsetters?
Based on the numbers, Spendsetters are a mixed bunch. They want to engage with retailers and embrace their purchasing experiences, but it has to be on their terms. That’s what makes selling to Spendsetters tricky.
Understanding the Millennial Mindset
Millennial spendsetters place heavy emphasis on three core values, and retailers who don’t “get it” won’t be successful in selling to this group.
- Convenience: Spendsetters want fulfillment options that work for them.
- 75% would shop more at a store that supports “just walk out” payments.
- 69% would shop more in-store if line-ups were shorter.
- Context: Spendsetters want two-way interactions and relationships with brands before they even arrive in stores.
- 57% want to be able to check inventory levels online.
- 61% want personalised experiences based on their purchase history and preferences.
- 72% would shop more if they had personalised product suggestions and promotions.
- Control: Spendsetters aren’t afraid of giving their money to retailers who understand and appreciate their core values of Convenience and Context.
- 80% use digital wallets and 59% of Spendsetters would use a store’s own app to pay
- 53% would shop more if a chat bot gave them personalized recommendations
How to Sell to Millennials
There are a few key steps you can take to cater specifically to millennial spendsetters (and the broader millennial market). At a high level, you’ll need to take a truly omni-channel approach in order to reach these millennial spendsetters, because they want consistent visibility and accessibility across all channels to so many different parts of your business. So what strategies and tactics should retailers take?
Millennial Sales Strategy
If you want to sell to millennial spendsetters, you have to meet them where they want you to be, instead of making them come to you. You need to offer them the control to choose their preferred payment and delivery methods, and provide them a personalized and/or exclusive experience. In short, your retail business needs to embrace technology just like they do, but how? By leveraging Retail Predictive Analytics for your business optimization and new technology for improving your customer experience.
Retail Predictive Analytics to Optimize Your Business
A well-designed Predictive Analytics Engine like Retalon is built on a unified platform, able to see data from all lines of your business, build a highly-accurate demand-based forecast, and proactively give you recommendations on how to maximize your ROI. Benefits include:
- Price Optimization: Price Optimization solutions help retailers set and maintain optimal prices and handle new product introductions, perfect for reaching the early-adopter Spendsetter who will pay a premium on a new and exclusive item.
- Smart Allocation: Retail localization that automatically account for existing stock, assortment distribution, and drills down to SKU performance at a channel/location level, essential for the flexible fulfillment options that Spendsetters want.
- Personalization: AI and Predictive Analytics can uncover behavior-based shopping patterns far more efficiently than humans. These systems apply learned behaviors to create product recommendations and personalization for Spendsetters, motivating them to shop 72% more.
New Technology to Optimize Your Customer Experience
There are many other excellent tactics available for reaching Spendsetters, depending on your industry.
- For Automotive Parts/Service: Amazon has aligned with Sears to sell tires online, and then have them delivered to Sears automotive retail locations near customers for installation. It’s a marriage of an established retail chain with new technology and channels.
- For Beauty: Coty uses blended reality beauty magic mirrors to simulate how different lipsticks and make ups would look on customers when they stand in front of a mirror, allowing customers to have a rich, immersive experience, and try before they buy.
- For Furniture: IKEA uses showroom space in their retail stores to let shoppers experience fully-furnished IKEA rooms look like. Now Wal-Mart is bringing the same showroom concept to virtual reality headsets, allowing Spendsetters to experience their showroom displays from anywhere.
With millennials representing a larger portion of spending every year, retailers who ignore millennial expectations will do so to their own demise.
Luckily, appealing to millennial spendsetters is becoming easier as retail technology improves. The golden rule is to give them the convenience, context, and control, that they’re after. Retailers who do this while embracing new technologies will build great relationships with customers who are willing to pay more for a premium experience. Leveraging retail Predictive Analytics will make sure that your business is optimized and prepared to maximize profitability.