By Amitaabh Malhotra, Omnyway
Millennials are a retail force to be reckoned with. This generation, representing 25% of the population, spends $600 billion a year, and its annual spending will grow to $1.4 trillion by 2020. To survive, retailers have to engage with Millennial shoppers, but many have struggled to do so. Major chains — including JCPenney, Macy’s, Sears, Kmart, CVS — plan to shut more than 1,000 retail stores in 2017.
While e-Commerce is one contributor to this retail crunch, it’s not the cause. Brick-and-mortar retail still represents more than 90% of total retail sales. There are many benefits to visiting physical stores that online shopping can’t offer, such as the ability to try things on and walk out with the item in-hand. The challenge that retailers are facing in reaching Millennial consumers is integrating the physical shopping experience and the digital shopping experience in meaningful ways.
When Millennial consumers go shopping, they do so armed with mobile devices. More than 90% of shoppers use their smartphones while in retail stores. They use their phones to access information, compare prices, and solicit feedback from friends as they make purchasing decisions. As a result, mobile devices are becoming a primary interaction, recommendation and knowledge interface for shoppers inside the store. This presents an opportunity to enhance the in-store shopping experience, and in doing so, drive loyalty and sales. The best, most engaging mobile experiences are those that combine intuitive user experiences and design with high functionality and utility.
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So, what can be done with these mobile devices and what are those functions that can increase shopper engagement? Information is a start. Millennials are big fans of self-service. They like to conduct research and gather information on their own, which is a big reason why they will whip out their phones in-store rather than flagging down a sales rep.
Retail apps should put all relevant information at a customer’s fingertips, including detailed product information, price comparisons, personalized recommendations, promotions, reviews, inventory, availability and shipping information. Make them available with a quick product scan, and make that information relevant to the shopper based on their context.
Millennials are also active users of social media and messaging apps. They are in constant communication with their peer networks and rely heavily on these networks to make purchasing decisions. Retailers can drive engagement by integrating with social and messaging features on mobile, as well as connecting directly with their customers for their customer service needs.
In addition, retailers should leverage these social and messaging platforms as a means to direct shoppers to interact within the store environment with the brands. With the modern capabilities these platforms offer, shoppers can actually be directed to complete a purchase of goods in-store and online while remaining within the messaging interface.
Another key component to emphasize through retail apps is loyalty programs. However, Millennials are price-sensitive shoppers; therefore, the traditional spend-based approaches don’t resonate as strongly with this demographic. Instead, retailers should construct multidimensional loyalty programs, presenting personalized pricing, offers and experiences based on multiple shopper loyalty defining factors such as peer influence, converted and unconverted store and online visits, online interactions, brand knowledge, domain influence and spend triggers, in addition to store spend patterns.
Lastly, retailers need to integrate frictionless payments and checkout in their apps — often termed “Brand Pay”. Successful mobile apps provide seamless, end-to-end experiences. If a customer is looking up information in the app, making decisions and earning loyalty points, they should also be able to complete the transaction within the app — whether for an online purchase or in-store. Furthermore, enabling customers to order ahead and pick up, complete self-checkout on their phones, or pay a retail associate on the floor, makes the physical shopping experience more convenient.
In 2017, the grace period for mobile apps is over. Retailers need to deliver compelling mobile experiences that engage all their customers and recognize that Millennial shopping behaviors differ from the generations before.
Amitaabh Malhotra is the chief marketing officer of Omnyway, an integrated platform for payments, loyalty rewards and offers that encourages consumers to use their mobile phone for all aspects of the buying journey.
