Millennials and the Future of Retail

May 17, 2018

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The Technology to Watch As we have noted before, a recent report by RBC predicted that by 2020 Amazon…

 Modern retailers are beginning to wake up to the fact that the much-derided generation known as "millennials" will soon come to dominate the retail landscape.

The question is, which trends will shape the way this influential generation interacts with retail brands?

What’s Happening?

The UK grocery chain Sainsbury’s made waves last month when it announced that it was introducing “touch-free” packaging for raw meat to target millennials who were scared or otherwise put off by the possibility of picking up their raw chicken breast and placing it in the frying pan. While many columnists were annoyed enough to add their voices to the growing chorus of pundits decrying the fragility of this generation, there were interesting takeaways for marketers and retailers looking to the future. The announcement was made after “ a survey showed that touching raw meat induced high levels of anxiety among shoppers under the age of 35.” A spokesperson for Sainsbury’s declared that the new bags “allow people, especially those who are time-poor, to just ‘rip and tip’ the meat straight into the frying pan without touching it.”

Regardless of your feelings about the generation that launched a thousand angry editorials, this announcement is one of many that show how savvy retailers are changing the way they present and deliver products to the 18-35 demographic. The two words you should be focusing on in the announcement are “anxiety” and “time-poor.” They show you what current market research indicates about the shoppers of today and tomorrow. Millennials value their time as much as their money, and they want to shop, cook, eat, and live as easily and efficiently as possible, with an absolute minimum of anxiety-causing headaches and inconveniences.

For the most part, this means that millennials are taking their money online. A 2017 study by Mergeln found that 54% of online purchases were made by millennials and that 63% of online purchases by millennials were made on smartphones. The same survey found that millennials were almost 5x as likely to rent products online, and 2x as likely to use a grocery app from a large retailer as members of other generational cohorts. Millennials are also far fonder of using “sharing” sites and apps like Uber and AirBnB than their elders.

The US Grocery Shopper Trends 2017 study found that:

  • Among the products shoppers say they have ordered online during the past year, Millennials continue to select a narrow range of products to purchase online.
  • In the mix of less frequented food sources, e-commerce has passed a tipping point during the past year, with large numbers of Millennials suddenly more comfortable with shopping online, albeit still confined to a limited breadth of food products.
  • This year, however, the bigger news is how comfortable Millennials have suddenly become with using online shopping for their grocery needs.
  • Online-only store channel shopping frequency went from 28 percent in 2016 to 43 percent in 2017.

What Does it Mean?

So far, we have seen that Millennials are looking to shop in ways that eliminate inconvenience, that they have been steadily shifting from brick and mortar retailers to desktops to smartphones, and that they have begun buying more and more of their groceries online. Taken together, we can use this data to make some assumptions. For most people, grocery shopping is by far the most time-consuming and least pleasurable shopping they do. For young people who value their time very highly, and find the idea of touching raw meat fraught with anxiety, the idea of getting their groceries from the comfort of their own couch is clearly appealing. Avoiding the hassles of cashiers, parking lots, screaming children and melting ice cream and having your groceries appear on your doorstep in just one hour is surely a service that Millennials rush to take advantage of, and the numbers back this up.

A 2016 study found that 71% of Millennials shopping online in the US had an Amazon Prime membership. The Amazon acquisition of Whole Foods and the growth of the online grocery shopping industry are bound to appeal to them.

When we link this trend to the generation’s willingness to experiment with new technologies in both life and eCommerce, it seems safe to conclude that Digital Assistants will have a significant impact on the future of shopping. A Statista study from June of 2017 found that Millennials were far more likely to be using DAs than Gen-Xers or Baby Boomers. In 2016, 23.3% of millennials were regularly using DAs, almost double the amount of Gen X users and triple the amount of Baby Boomers. The same study projected that by 2019 approximately 40% of Millennials would use the devices, while the other generations each hovered around the 20% mark. A 2017 study from Walker Sands found that among Millennials, 37% of respondents reported that “they ‘always’ or ‘often’ shop online via voice-controlled devices. Among this group, 43 percent made a purchase using voice in the past year.” The same study found that this level of enthusiasm for voice shopping didn’t exist among other generations, noting that “more than 80 percent of the overall survey population said they had not made a voice-driven purchase and nearly half (48 percent) said they were “not at all likely” to do so.”

What Should You Do About It?

Millennials are generally believed to be fickle, lazy, entitled and technology obsessed. You can rant about them until you’re blue in the face, but the fact remains that they’re the future of your business, and pretty much every single other business in the world. And they won’t accept business as usual. If your company wants to cultivate their business, you need to focus on using technology to make buying your products easier, cheaper and faster than your competitors do. You need to become familiar with the latest technological trends and find ways to successfully market and deliver your products in tandem with them. Adimo, and the Adimo Voice shopping app in particular, can help you to connect.

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