seamless retail for millennial consumers: getting …...seamless retail for millennial consumers:...
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Seamless Retail for Millennial Consumers: Getting it Right
Accenture research shows that Millennials are much like other shoppers—just a whole lot savvier about how to get the seamless shopping experience they demand. The message for retailers is clear: Give them that seamless experience, or risk losing a trillion dollar demographic.
Understanding Millennials
Millennials—the generation born between 1980 and 2000—may surprise you.
Some, to be sure, conform to the popular stereotype of a dependent teen. But many of the 80 million US Millennials are already working, raising kids and living in their own homes. What’s more, they are big spenders— and getting bigger.
Millennials already account for about $600 billion of annual retail spend in the US.
And by 2020 they’ll account for approximately 30 percent of all US retail sales — spending a whopping $1.4 trillion. That’s a whole lot more than the older generations whose shopping habits they increasingly influence.
Indeed, while they are more inclined to buy on mobile than older consumers, there’s not much difference between Millennials and their elders when it comes to shopping (see One and the same).
Yet the myths about Millennials persist:
One and the same
When we recently surveyed 6,000 con-sumers across eight countries to identify their shopping preferences, we found on average that nearly half of all respon-dents (regardless of demography) seek the “cheapest option” when returning products that were purchased online; 40 percent are showrooming more often than they did a year ago; more than half would go online to buy a product they want outside of business hours; and 92 percent said that real-time product availability would influ-ence where they shop.
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Myth No. 1: Millennials only want to shop online
Not so. In fact, when we went to one of the largest malls in the US to meet Millennials in person, they told us they actually prefer to shop in-store. And for much the same reason most of us do: they want to know just what they’re buying.
“I want to touch it, smell it, pick it up,” said one.
Millennials certainly use online to become smarter shoppers—checking sellers’ ratings, for example, to confirm that they really do have the best offer. And when they’re in-store, they expect the same pricing and promotions as online, as well as mobile coupon scanning capabilities: if they have to print coupons beforehand they likely won’t come.
That’s much of what you would expect from the first truly digital generation. But our research also confirms that 8 out of 10
Millennials want an integrated — seamless — shopping experience, regardless of channel
Myth No. 2: Millennials are not loyal customers
When we asked members of the Retail Industry Leaders Association (RILA) what most concerns them about Millennials, nearly 40 percent cited lack of loyalty. But our research shows that Millennials can be loyal customers—as long as they get something in return.
They really do expect a customer-centric experience when they shop: an experience tailored to their wants and needs as truly valued customers.
“Customer service is Number One,” one young shopper told us. Personalized, targeted promotions and discounts are particularly highly regarded. And eight out of 10 say they are most influenced by
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coupons sent to their homes—though our research also suggests that they may be up to five times more likely to be influenced by mobile banners and online pop ups in the future.
Myth No. 3: Millennials are your “friends” on social media
A Facebook page does not impress most Millennials. Social media dominates their lives, and they use it continually to share shopping tips with friends and family. But they view social connec-tions with retailers as trans-actional—a way of accessing deals.
“I have to be pretty moved emotionally to just ‘like’ [a retailer] for no reason,” said one young woman.
Millennials want you to understand them just enough to know how to connect with them in a rewarding way. And
the key to reaching them on social media is to
become infused in their conversations: to be talked about, rather than talked to.
Millennials are plainly tough, smart, demanding shoppers. They want what they want, when they want it, at a price that works for them—and they want it fast.
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The speed of change
Retail will change more in the next five years than it has in the last 50 years—and faster than any of us can imagine…
Facebook is only one social network among many. In just the past 60 seconds, there’ve been almost 30,000 new posts on tumblr and more than 3,500 pictures posted on Instagram.
Yet, when we polled the CEO’s of many leading retailers at a recent event regarding which part of their organization — Merchandising, Marketing, Supply Chain, IT, Finance, HR — will be most challenged in becoming seamless, more than half of them identi-fied IT: A strong indication that while most retailers know that technology- driven change over the next few years will be fast, few expect to keep pace.
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A
Accenture research shows, however, that retailers are under-delivering—and not only for Millennials.
When we polled more than 60 global retailers to understand how seamless an experience they are offering their customers, we found some big disconnects (see Seamless disconnects).
Most retailers, in fact, are not delivering a consistently personalized, on-brand experience for each individual customer, at every touch point, any time, any-where. In short, they just aren’t seamless.
Seamless disconnectsWhile most retailers have invested in the quick and “sexy” capabilities—providing a consistent cross-channel experience and offering personalized interactions—too many are still lacking when it comes to the harder stuff: connected shopping (being able to move seamlessly across channels); integrated (cross-channel) merchandising; flexible fulfillment and return options; and the emerging capabilities and enriched services that make the overall shopping experience better, faster and more memorable.
Seamless Retail by Dimension
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Absent
1 - Consistent Experience
2 - Connected Shopping
3 - Integrated Merchandising
4 - Flexible Fulfillment/Returns
5 - Personalized Interaction
6 - Better, Faster and Memorable
Under- developed
Highly Advanced
Developed Advanced
Serving them seamlessly
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Serving them seamlesslySeamlessness, typically, has four core components:
• Customer — customized offerings in context and across channels to provide better, faster, more memorable service
• Operations — integrated to sustain a single customer conversation, regardless of channel
• Platforms — standardized IT platforms to unify data sources and improve cross-channel transparency
• Partners — collaborating to strengthen the customer value proposition
And there are 5 steps outlined (on page 8) to becoming a seamless organization.
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Organizing for agilityIn order to address their customers’ demand for seamless service, traditional retailers need to take serious stock of their operational capabilities. They must be seamless in terms of buying, placement and promotion of merchandise. And that means having inventory visibility, as well as developing pricing strategies and managing metrics and incentives across all channels.
In Accenture’s experience, the seamless organization operates in the following ways:
Merchandising and Marketing convergeinto a unified function with the customerexperience becoming equally as important asproduct and price.
• Merchandising of the Future delivers a cross-channel product and customer experience.
• Marketing of the Future presents a cohesive “brand” for the new non-stop customer experience.
• Micro-promotions/offers overtake mass market-ing vehicles in importance and become a core Merchandising of the Future competency.
• Specialized support functions and new capabilities free up capacity and infuse innova-tion into the business.
Single-channel Teams (Marketing, Merchandising, Supply Chain)consolidate to serve the customeracross the enterprise.
• The customer has no channel boundaries.
Supply Chain evolves to holisticallymanage inventory forward, backwardsand sideways.
• Inventory must be managed at the enterprise level. Visibility and dynamic fulfillment become a mandatory requirement of a successful retailer.
• Returns management becomes a core competency now for all customer-facing employees including stores, distribution centers and call centers.
Metrics and Incentives expand toinclude holistic customer value – comp“customer” sales becomes as importantas comp “store” sales.
• Incentives must influence behavior change to drive sales across all channels.
Store Associates coalesce into twospecializations: customer-facing associatesproviding increasingly sophisticatedcustomer experiences and fulfillment centricassociates enabling increasinglycomplex delivery options.
• Associates must evolve to deliver a more sophisticated and ever changing, dynamic customer experience.
• Stores become fulfillment centers – roles and responsibilities blend between stores and distribution centers.
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Millennials are transforming shopping for everyone - so swiftly that the entire retail organization needs to change, and radically. The time to start is now.
For more information on building a seamless retail enterprise that connects with Millennials, please contact:
GlobalChris [email protected]
Asia PacificTakaaki [email protected]
EuropeAdrian [email protected]
North AmericaDave [email protected]
Follow us on Twitter @AccentureRetail
Learn more at www.accenture.com/retail
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