Looking to 2020: Part 2
Brick and mortar retail out to 2020
If you have not read Part 1 already, then stop now! Go back and read it here, as to not miss key parts of information about these two demographics. It is necessary to understand exactly who Millennial and GenZ consumers are, what they need and how they shop before exploring how they will drive changes in stores and customer service expectation. If you have a clear understanding of who these two vast consumer groups are, and you're ready to hear more about how they are impacting the traditional brick and mortar of retail, then read on!.
As mentioned in the first post week, retail stores are in a significant period of flux. This is partially a result of a growing, technologically advanced world and an increasingly global shopping market. Looking towards 2020, there will be changes on high street as stores develop themselves to become more integrated parts of their communities. Such changes will be strongly driven by preferences of Millennial and GenZ consumers in customer service expectations. Stores who hire local will likely inspire more shoppers from their local community to walk through the door. Integrating experiences with products for sale and creating an exciting in-store culture will become the new standard. To be successful in 2020, retail stores are encouraged to explore three factors to draw Millennial and GenZ consumers into store: customer service models, visuals and store layout and brand consistency.
Although these two groups are somewhat overlapping, they are still two different groups and should be treated as such. In order to shift your strategies and shape your retail business to best suit Millennials and GenZ consumers, there are four points of difference to focus on. Firstly, Millennials are more price sensitive than GenZ shoppers; they are always looking for bargains. Generation Z was born into a world utterly driven by technology and the advances that continued technological growth. For this reason, they expect more than Millennials from speed and advancements of technology, to benefits of brand loyalty and feeling appreciated by businesses. Thirdly, GenZ is big on individuality, meaning that as consumers they are seeking uniqueness from the brands they shop. This is hugely impactful when it comes to brands shoppers from Generation Z choose to do business with. Finally, and arguably most crucial, GenZ is even more global than Millennials. Although Millennials were considered the first truly "global" generation for retailers, GenZ is already surpassing that. By 2020, GenZ will be even more global in their thinking, interactions both social and non-social, and businesses around the world will be trying to relate and captivate the GenZ consumer.
Exploring customer service models
One of the major drivers attracting people to brick and mortar retailers is customer service. The services experienced whilst in store are difficult to get, or virtually impossible to achieve, through shopping online. Customer service is a reason shoppers will return to a store and develop brand loyalty, as well as a reason for why they will not. A bad customer service experience sticks to memory more often than the positive experiences. By 2020, it is crucial that customer service models are tailored to Millennial and Generation Z shoppers in your targeted audience, and the expansion or development of online customer service offers a significant point of difference. We'll talk more about online service models next week, but for now the focus is on a few examples of customer service models that might work in your retailer business.
A trend worth considering, which demonstrates future thinking, has an emphasis on empowering employees. Tailoring in-store customer service seamlessly to blend staff members’ individual skills and personalities with the retailer's brand standard can create a more organic service environment. Authenticity of staff who are engaging will be an attractive driver for many customers, as it will be seen as a unique experience. This model will eventually become the norm, especially as GenZ makes a point to seek uniqueness in customer service expectations, so perhaps examine if implementing this practice into your business will suit sooner rather than later. Having an engaged customer service team in a brick and mortar store makes a significant point of difference in a price and product competitive market.
As stores become more involved in their local neighbourhood they are likely to see an increased interest from local shoppers. There will be a unique customer service model in stores like this, as many of the employees will be able to establish more personal and friendly relationships with customers from their communities. The introduction of unique in-store experiences such as private shopping events for VIP customers, live music, demonstrations and other experiences the customer can participate in will be viewed as an added level of service. Experiences inviting the customer to take part also helps to create strong and memorable branding. A significant proportion of GenZ consumers prioritise shopping local while they are in their younger years, and shops that are stronger integrated and involved in different parts of the community set themselves apart. It is predicted that as they get older, they will be more likely to shop like most Millennials: favouring convenience and price.
It is old news by now that online shopping has seen substantial growth. More and more Kiwi Millennials are turning to ecommerce for convenience and price comparison. It helps that they are also able to do this 24/7 from virtually any device from anywhere. It is crucial that retailers who operate both a brick and mortar and online stores apply some type of customer service model to their website as well. Depending on your business this could be something very minimal, such as how to contact someone for assistance, or could be nearly a full-service model with instant chat for assistance of any nature. If you chose to implement some level of customer service with your online shop, make sure that it achieves everything your brand stands for, and is as similar as possible to the in-store customer service experience. This might include recommending products your shopper might like, or the ease of navigating the webpage and making a purchase. If you're an online only retailer looking to expand by 2020 into brick and mortar, follow the same steps in reverse. Your online customer service model will be an indication of what the in-store experience will be like.
Shorter attention spans mean more effective visuals are vital
The first two questions retailers need to ask when planning the layout and merchandising of a store is: where will customers look, and how will customer move through the space? To keep stores exciting for Millennial and GenZ shoppers, ensure enticing visuals have been created and maximise the shop floor as best as possible. The use of the word "maximise" in this context does not mean to fill shelves till they are bursting or shove so many fixtures onto the floor that no one can squeeze through, but means utilise the space you have efficiently. If you are building a new shop or remodelling a full interior, you will likely have more flexibility and can design the shop with the above in mind. If you are entering an existing space or making minimal changes, then you challenge the space and merchandising in order to attract a Millennial and GenZ customer.
When it comes to any store layout, there needs to be a minimal "negative sales space" whenever possible. This means that every wall and display in your store needs to generate sales, and product shouldn't be hidden from view or in areas a customer would not wander to on the shop floor. Every part of the store where there is product should be a space that can generate sales. Keep displays with words short and simple in order to retain attention, and place key signage in areas customers will see from the entrance. Be conscious not to place displays or signage too high or too low where it can be overlooked. Organised and clutter-free displays and environments are more appealing to Millennials and GenZ shoppers, even those who are bargain hunters, so keep things tidy and take a minimalist approach where appropriate.
The way a customer will navigate your store is determined by two things: the architectural layout and merchandising. Where you place displays or fixtures, in addition to the products on them, will be drive the customer's direction in-store, and influence the products they may purchase. Use this knowledge to your advantage and don't be afraid to get creative with your visual merchandising. Constantly challenging floor space and making changes will keep the store looking refreshed, which is especially important for Millennial shoppers.
Consistency is key
Something that sets retailers and brands apart in the eyes of a consumer is consistency. To a retailer, consistency can involve customer service, product variety or quality, pricing, convenience of purchasing or store layout just to name a new. For those Millennials and GenZ customers, consistency of retailers is critical to establish brand loyalty and generate returning business. Retailers must take the "one-size-fits-all" model and abandon it, opting to create a strategy that will satisfy the constant evolution of needs their customers possess. Any new strategy must be consistently executed for customers to experience in order for it to become part of a business's brand standard, and hopefully results in customers returning to store.
As previously discussed, a customer service model that connects more organically with the Millennial and GenZ shoppers is a perfect example of creating branding consistency. Implementing a service model that matches your store layout, design, products on offer and price point is what consistency looks like when everything comes together. For example, if you sold products at a very high price point, the expectation of customer service is that staff are much more engaging with customers to provide them with product knowledge and to understand their needs clearly. What service model you choose should reflect the products in such a way that Millennials and GenZ won't be able to resist visiting the store.
Brick and mortar stores won't be disappearing all together anytime soon, and likely never will. Stores that do leave the high street or their neighbourhoods can do so for many reasons, but by not creating unique experiences for customers, or not offering the right products, is often the cause of declining sales. Keep working towards attracting the Millennial and GenZ customer in store for success in 2020! Visit back next week for some insight into how these two consumer groups are shaping the future of Omni-channel and online retailers.
by Emily Duncan, Retail NZ Adviser
Published on the Retail NZ Blog, on the 26th January 2018.