– Shopping behavior of Millennials
Millennials are leading a change in purchase trends. They are savvy shoppers, the biggest percentage of them come from a post-recession time. Therefore, it is also in their nature to search for the best possible price and get the most value and shopping experience they could find. Online shopping gives room for this trends and 80% of Millennials agree that one of the top 3 factors when choosing an item is its priced, and Internet makes it even easier to compare prices and search for deals. However, the market is not yet completely ready for this trend and habits. Researches are still conducted in order to grasp the shopping behavior and insights. The leading trends that define this generations are:
1) Smartphones are a mean to connect to the Internet:
89% of them are using devices to connect vs
75% use laptops and
37% use desktop computers.
Therefore retailers need first mobile strategy in order to stay relevant and fulfill their needs.
According to Nextopia Research, shows that the percentage of Millennials that research online before making a purchase is almost 10% higher compared to Baby Boomers, due to the fact that they are more active user. The difference between the generations habits is noticeable, also by the devices which they use, 60% Millennials use their smartphones to do it, compared to just 10% of the Baby Boomers.
2) Social Media is the main resource for information:
There is no doubt that social media is used for communication and entertainment. More importantly, it is also a primary source to gather information about products, special deals and shopping news. They no longer use traditional methods of advertising such as television and print media.
Compared to Baby Boomers, Millennials research more online before making a purchase, also due to the fact that for them photos from their friends or other consumers that they trust are more reliable. The sources which the previous generation found trustable such as magazines, newspapers or the sales assistant during the shopping experience, they would rather trust someone with more authority and knowledge are no longer a source of trust for Millennials, who are more likely to trust the opinion of other consumers of bloggers they follow, 82% of the corresponds say that they’re influenced by the word of mouth. What is more, another research shows that 76% of the Millennials find content posted by other consumers to be more honest than the one published by brands. The differences come along also by the type of content, Baby Boomer would rather trust a written one where as Millennials prefer videos and photos, this explains why the older generation favorite platform is Facebook (90% of the contestants) , whereas for Millennials it is Instagram.
3) High Price sensitivity
Along with looking for authenticity of a product, local sourcing, ethical production and great shopping experience, Millennials are looking for the best price on the Market. More than 85% are influenced by all the factors mentioned above, but the purchasing decision is mostly taken in consideration of the price of a product. This comes as a result of the ability to compare instantly prices. This phenomenon occurs not only while shopping online but also while visiting an offline store, they are likely to compare the price with a competitor before making the final decision. With this strong Competition, Brands should offer either a very attractive price or an additional intangible value to the product in order to stand out.
4)Experience over material items
82% participate in live experiences such as concerts, festivals, artistic performances, races, parties
78% prefer buying experiences over “things”
Millennials demonstrate this habit, because they spend on average $220 more than Generation X or Baby Boomers.
– how the motivation for shopping offline has changed before vs now ?
– The role of digitalization:
Digital flows are transforming the transitional ones, nowadays around 50% of the world’s traded services are already digitalized, and the percentage is growing. It is mainly used to facilitate the needs of people and cut the supply chain, as AirBnB and Uber do. In 2016 around 12% of the global trade in goods is conducted through e-commerce. Many companies that started their business offline are now adding digital wrappers to raise the value of the product and improve the image of the brand.
However, by allowing companies of any size, anywhere in the world to start selling, this increases the competition. This has the biggest influence on big corporations. For example, Amazon hosts 2M third-party sellers and in the US, the share of exports by large multinational corporations has dropped by 34% (from 84 to 50% ) in 30 years. New digital competitors from all over the world are pressuring the marketing by lowering prices and cutting the cycle of products.
Brands that started online are closing retail stores, from the other side pure online retailers like Amazon are opening physical stores. *how to face the Amazon struggle; The condition, the new application, how the process will change : Disruption in the system compared to the usual physical store
Amazon’s first Bricks and mortal store was opened in New York. The first bookshop was opened in Seattle in 2015, and in the same year 13 more physical stores were opened in the US. Mr Amobi, says that the retail points has also its benefits, including a wider brand awareness and exposing people to Amazon’s Prime subscription service. One of the main aims of the store is to bring items into person and serve as a showcase. The store uses a combination of sensors and artificial intelligence to automatically detect the items shoppers remove from shelves, so they can leave the store without waiting at the cash machine. The store itself is an innovative and pushes customers to pay with the app.
“There’s an opportunity to get their platform closer to the consumer and interact, engage, at a very minimal investment,” he said. The founders understand that the Amazon customer is looking forward to something different.
Regarding the merchandising of the store, the books are organized by analyzing the data from customers.
What is more, the organization inside the store is different that the one in other book stores, clients define it as “more friendly” even though there are less books available.
Fashion Brands are also following the same trend, one of the most powerful pure online players, Farfetch is planning to open a physical “Store of the Future” . It will use the gathered data from online consumers and bring it into the their first physical store. Jose Neves explains that the store will present his vision for the future retail experience with advancements in technology, including virtual reality, the physical store
“links the online and offline worlds, using data to enhance the retail experience”.
Today, physical retail accounts for 93% of the sales, and even with the fast online growing sales, in 2015 it is predicted to be around 80%. So, the offline stores still play a crucial role. Even though, there is no doubt that customers are influenced by the digitalization and it is influencing consumer’s behavior and purchasing decision What is more, the Brand discovered the need to do it in order to analyze better consumers buying process. One of the many opportunities include browsing for items inside the store, even paying while you are inside the fitting room.
In 2015 Farfetched bought a Mayfair boutique in London, Browns.
Rebecca Minkoff operates less than 20 stores in the world which are all operated in a unique collaboration with Ebay, even though accessories are also sold in department stores. However, the Monobrand stores have the feature of a smart wall which suggests products in a similar style, and the main idea behind it is to avoid all the human contact elements during the purchasing process that were uncomfortable for the customers and avoid them using digitalization. The way they have build their store is similar to the idea of Amazon&Go, the difference is that Rebecca Minkoff has more contact with the sales assistants compared to Amazon where all you need is the app to make your groceries.
Even though clients appreciate those feature and enjoy using them, the CEO is still not sure if it brings directly lead to profit.
Changing Spending habits: more experience, less material goods
Changing Spending habits: more experience, less material goods
-> Wool rich experimental store! Coop in Bicoca; just digital
In 2017, woolwich opened a new experimental store in Milan, it puts experience in the first place. It is a place where you do various things, like using the free internet in the co-working space, get closer to nature in a room full of plants, learn about the heritage of the brand, or test the durability of your Woolrich jacket in a room in a -20 degrees temperature where natural snow is produced every day. This innovative store is an experiment with the new retail model. This is just another example of Brands that understand the need for innovation in retail, focusing more on the experience and emotional side, and less on material goods. Centering the retail model around the consumer and his needs.
The majority of respondents are aged 18-24 y.o., the second biggest age group is under 18.
I conducted a research on Online and offline shopping behavior. Out of 120 people that answered, the results show that the biggest percentage of correspondents that prefer shopping online for various reasons, on top of which are: saving time, easier to compare brands and convenience.
Whereas, for the reasons of shopping offline are getting in touch with the product, instant gratification, the possibility of trying the product before buying it and one of the most important factors which online shopping can never offer is the social activity.
Even though, according to the survey, consumers say they are not attracted to visit a physical store because of the digital devices there, this is a subconscious process which not everyone recognizes on a conscious level but researches show that stores where technology is used effectively in an intelligent way, sells are up to 40% higher than in other stores. This proves their efficiency, despite consumers recognition of it.
Both choices have serious reasons which cannot easily exclude one from the other and are the reason which makes me believe that online shopping cannot take 100% over retail and traditional shopping, even though consumers are getting better informed and are embracing technology in their everyday life, there are some parts of offline shopping which cannot be replaced. This is why, in the shop of the future, will be a mixture of the best feature of the digitalization bringing them to the physical store.
After Burberry has been taken by the CEO Angela Ahrendts, the brand was completely renovated with a new evolving strategy, by going completely digital in 2011. Ever since then the profits have grown by more than 68%. Rising from £1,501.3M to £2,523.2M in 4 years.
Focus on experience in stores, not on stuff
The online shopping experience is offering convenience, time-saving and checking and comparing prices faster, this means for retail that they should offer something more than being a pure selling point. It should focus more on experience, having inside the stores 3-D body scanners, digital changing rooms. New advances offer a competitive advantage by helping retailers deepen their understanding of traffic patterns and shopping habits, and by providing the opportunity to leverage real-time connections. In the store of Rebecca Minkoff the interactive store experience has helped tripling sales.
Fico,in Bologna: Oscar farinetti,
In November 2017 in Bologna opens Fico Eataly World where food from all over Italy is shown. It is the world’s largest agri-food park, with the 100 00 sq meters, with a variety of multimedia experience based on food, farming and craft. Its focus is on Italian food in all aspects from growing to processing and crafting. Visitors are able too see how olive oil is being pressed or how Parmigiano-Reggiano is made. It takes the concept of previous Eataly stores to a better-developed version. From the cows that produce the milk that becomes the cheese that we’re eating. They also offer educational lectures, trainings, various workshops, multimedia carousels, and it’s all sustainable. The emphasis is on the relationship between men and crop, how every single step is done, by looking back at time to discover the traditions that are kept, how products are grown and animals are treated. This is done in different ways, which are always traditional and conserve the heritage of Italian food, but at the same time presenting it in a modern way. For instance, there’re 44 000 square meter of solar cells, workshops, digital screens where you can see every step of the supply chain. It balances tradition with digitalization.
Considering how trends are developed, usually they pass from other industries like the food one and later on are adopted by the fashion industry. It would be no surprise if fashion luxury brands build a theme park, where you could learn about the whole process. Starting from the crops of cotton, to the textile production, design, garment production, until it arrives to the final consumer. By providing more information to the consumer, it reveals the complexity of the industry and makes him more involved into the process and into the final product, by feeling more attached to it, because you know the story behind. This could be done in various ways, implementing both technology and traditional craftsmanship and workshops.
Another growing trend in the past 5 years within the food industry is the one of “customizing” by choosing the ingredients with which your dish will be cooked. This was a common way of restaurants to engage with the client by giving them the opportunity to choose the lobster which they would like to eat (ex: “Lobster & Burger”), then this also spread to fashion by customizing final small items. These is one of the reason which makes me believe that in order to develop, the fashion industry takes a look also in other industries.
Scaro Milano, city life mall, fiera
bullet points that are mandatory to every store
– Augmented reality
– Omnichannel: Retail (r)evolution, TED talk