The change in retail buying patterns is often blamed on the rising generation of shoppers, just as fluctuations in the economy and politics are blamed on the generations and administrations before them. You’ve probably heard that today’s consumers like experiences more than possessions, are socially conscious, and want more personalisation. While those things may be true, are they really having an impact on overall shopping behaviour like switching to different retailers? Is the changing shopper responsible, at least in part, for lowered spending?
Deloitte recently published “The consumer is changing, but perhaps not how you think,” a report which look closely at marketplace dynamics to better understand what has really changed. What Deloitte found is that there’s some truth to the idea that millennials behave differently than baby boomers when it comes to shopping, but what we generally believe to be true about all millennials is really limited to those with high incomes. In that case, high-income millennials do prefer experiences over stuff, but the majority actually behave similarly to their parents—the baby boomers.
Money, not millennials, changed the retail landscape
The real driver for lowered spending isn’t membership in a particular generation; rather, it’s most heavily influenced by income. Today, most people are having to spend more on non-discretionary categories like healthcare, education, and housing—leaving less for apparel, electronics, jewellery, and furniture. It’s not that the average millennial is tired of owning stuff and wants more experiences; it’s that they can’t afford the things older generations once considered “essentials”.
Another revelation from the Deloitte study is that today’s consumers spend 20 percent less time shopping than those before them. However, this is perhaps attributable to the efficiency and speediness of online shopping. Clearly, ordering online and having products delivered to your doorstep is a big time-saver. Regardless, this means retailers are fighting over fewer minutes of attention from consumers.
The fundamentals of retail haven’t really changed
Overall, the study confirms that price and convenience still reign supreme for consumers, while core values and personalisation are ranked much lower in importance. When shoppers arrive in the store (or to the webstore), they still want good deals, available products, and easy check-out. So, retailers still need to focus on the basics, but they can certainly use technology to boost performance.
First and foremost, retailers should ensure their product assortment and prices are attractive. This includes providing lots of product information and good deals. Secondly, brands must ensure the customer experience is engaging, with mobile devices available to employees to help in-aisle, and fast check-out processes. Time is valuable, so make shopping easy. Lastly, they should extend buying opportunities by implementing omni-channel processes that allow consumers to shop the way they want. After all, providing choice increases convenience and garners loyalty.
The world is very different now, but in many ways, shopping is still the same.
Jarrod Kinchington is managing director at Infor ANZ.