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Coverings: Millennials have distinct buying behaviour. Are you ready?Monday, September 14, 2015 > 12:15:17
You could say they are the next big thing. They are the Millennials: the next generation of customers you’ll have — or won’t have — for years to come, depending on whether you’re ready to meet their technology-driven customer service expectations.
“In the next two years, they’ll have the most spending power,” says Dan Schawbel, founder of Millennial Branding and WorkplaceTrends.com. “The way they shop and consume is different from the older generations. The older generations are more about brick and mortar; the Millennials are more about shopping online and they want to be engaged in new ways.”
It’s not unusual in our industry to have built your business through word-of-mouth to different generations of customers from the same families. But today, having customers from different generations is a challenge, according to a white paper titled The Aspect of Consumer Experience Index: Millennial Research on Customer Service Expectations by Aspect Software and The Center for Generational Kinetics, in Austin, Tex.
“Most companies were not designed to accommodate the divergent preferences of multiple generations of customers at the same time. However, this situation is not only the new normal — it’s also a mission-critical imperative for any company that wants to not only survive but grow,” Aspect and General Kinetics say in the research report.
As the paper notes, your customer base today can consist simultaneously of Millennials — also known as Generation Y (born generally between 1977 and 1995), Generation X (1965 to 1976), Baby Boomers (1946 to 1964) and Traditionalists (born in 1945 or earlier).
Schawbel knows what he’s talking about when it comes to the different expectations of Millennials — he is one. The New York Times best-selling author, entrepreneur, television commentator and speaker is recognized in the U.S. as one of Inc. magazine’s coolest under-30 entrepreneurs.
A global market research study by the consulting firm Accenture calls Millennials “a potent force” that now spends $600 billion US annually. By 2020, says Accenture, this will grow to $1.4 trillion US every year. That will represent 30 percent of total retail sales in the country, Accenture predicts.
Whether your store will have Millennials as customers depends on how quickly you adapt to the new retail environment, according to the Accenture study. Accenture says the face of retail “will change more in the next five years than it has in the last 50.”
“Unfortunately, our research shows that retailers are currently under-delivering when it comes to the demands of Millennials,” the research report says. Accenture evaluated more than 60 retailers around the world, and concluded “most of them had big holes in their approaches” to creating the kind of customer experience Millennials expect.
“They want less in-person contact, more digital engagement,” affirms Schawbel.
Having a well-designed store is still important in an overall customer experience. But it’s your store’s online presence that’s even more crucial now, especially to attract Millennial customers.
“You have to focus on the online presence first,” says Schawbel, “because the first interaction with Millennials is not them coming into your store. It’s how they’re interacting with your brand online. So you need to establish a strong presence on social networks and a website so they can find you; see what you’re all about; see what your offerings are; and decide if they want to do business with you.”
He adds, “Millennials are very sophisticated and highly researched, so they’re looking for information about
stores online before they go to the store.”
Schawbel adds, “Companies have to act like people in order to build relationships with Millennials before they do business with you. It’s what we call the humanization of branding.”
On your website, says Schawbel, you need to do things such as post photos of your store, tell stories about people who work in it; and write about things going on in the local community including partnerships with other local stores.
“That’s going to make a big impact because you’re telling them the story about who you are, what’s around you and what makes you special. That’s going to make them (Millennials) want to give you a chance,” says Schawbel.
If you’re not active on a Facebook page for your store; if you’re not tweeting; and if your website isn’t content-rich, engaging, modern and regularly updated, you’ll be considered irrelevant by Millennials. “That’s all expected now,” he affirms.
And on your website, don’t blow your own horn, says Schawbel, because Millennials won’t believe you unless what you’re claiming is “backed up by a legitimate source.”
Schawbel says that if he were making a flooring purchase decision, he’d first “message a few people in my local area.” Then he’d do a Google search to see how other people rate the stores around him. He’d decide which two or three top stores to visit based on both sources of information. “Then the one with the best price, the best product and the best service wins,” he says.
Millennials, states Schawbel, are very brand-loyal, putting product quality above all else. “Our research says the quality is by far the most important thing. Even if the service was bad but the product’s good enough, they’ll still buy it,” he says. Schawbel’s company surveyed 1,300 Millennials last January and all indicated “that it’s all about the quality,” he says.
Accenture says Millennials are transforming not only their own shopping behaviours, but also those of their baby-boomer parents. Both generations are wanting a seamless customer experience, says Accenture.
This evolution is happening fast, “and many retailers will find themselves falling further and further behind,” the company affirms in its research report.
Schawbel says incorporating interactive technology in your store’s retail design “anywhere you can use technology” is vital for creating the kind of customer experience Millennials expect. This could, for example, include having a self-service kiosk or computer station where customers can create a virtual room and see how flooring will look in the room design.
He adds that “creating a special, individualized experience is important” because Millennials “grew up wanting to feel special.”
You’ve probably grown your business over the years by building personal relationships with customers, and through word of mouth. But because of technology, both the way customer relationships are built, and the impact of word of mouth, have changed forever.
Now, says Schawbel, more and more relationships are built online first, then they lead to in-person ones. “I know this for a fact as a Millennial. That’s what’s happening,” says Schawbel, “and it changes everything.”
As for the good or bad for your business that word of mouth can generate, says Schawbel, “Twenty years ago you could tell maybe a handful of people about your experience shopping somewhere. Today, I could tweet somebody and 240,000 people could potentially know.”
Today, you can no longer rely on word of mouth as a way of growing your business, affirms Schawbel. “Millennials don’t want to have the same financial advisor their parents did,” he says to make the point.
“Now you need to be available online; you need to publish information so people get to know you; and you have to have superior products and customer service so that your ratings are high and your business will flourish and develop,” Schawbel says.
The authors of the white paper by Aspect and The Center for Generational Kinetics suggest that a good way to develop a customer experience appealing to Millennials is to “shop yourself as if you were a Millennial.”
This would include first searching for your store and products online, and then going through the entire buying process “with as little direct human contact as possible.” It will help you figure out what you need to change, Aspect and Generational Kinetics say.
For example, if you’re having a customer event or a sale; following up on a flooring consultation; or just letting a customer know when their floor will be installed, don’t call Millennial customers. Email, text or tweet them instead. “Millennials don’t like to be called, and they don’t listen to voicemail, and that really changes communication,” Schawbel says.
Schawbel says one of the best ways to understand Millennial customers, and be able to create the special customer experience they want, is to make sure you have Millennials on your staff. They’ll add value either on the showroom floor, or in the office, handling your website and social media marketing. “Millennials want to buy from Millennials,” Schawbel says.
The retail environment is more competitive than ever, and ever-changing rapidly because of technology, and the buying power and attitudes of Millennials. “It’s getting harder and harder to be the little guy in many ways,” says Schawbel. “It’s not going to get any easier. But if you have a good formula; if you have the right people; if you’re providing the right level of quality and service, I think you can still survive.”
He adds, “If you’re a local retail store, you’re going to want to communicate how you’re impacting your local community. If you’re not, then you’ve got to figure out how to do that because that’s going to make Millennials want to work with you and buy from you.”