For those of you out there who think the Millennials are the “next big thing” for your business, think again. They may not be as big as you had hoped. And for the likes of the three “As,” (A&F, American Eagle Outfitters and Aeropostale), and others who primarily target this cohort, you better start strategically repositioning your brands and your messaging to adapt to the “double trouble” of dying malls (which used to be huge teen hangout destinations) and Millennial shopping behavior, which is shop-until-you-drop…but don’t buy.
As I pointed out in my recent article The Great Retail Demassification, there are several reasons mall traffic is suffering, directly impacting store traffic, particularly in the B and C malls:
- Every store in the world is literally in Millennials’ pockets; they can hang out with their friends, sip lattes and shop online – all at the same time. So why spend all the time and effort traveling to, and traipsing through, big, old, largely boring malls with a limited number of cool stores that don’t offer any great experience in the first place?
- And the Next Gen is driving declining mall traffic. According to a recent study by The Intelligence Group (TIG), a division of Creative Artists Agency, conducted through online polling of 1300 consumers, ages 18-34 years old, 72% of Millennials research and shop their options online before going to a store or the mall.
- Having thousands of places to shop quickly right at their fingertips, or in a niche boutique conveniently located across the street, Millennials are increasingly pursuing special, exclusive “just-for-me” products – because they can. Given this shift in behavior, why would they want to go to a store selling clothes that appear on the bodies of millions of their peers? And a good majority of those Millennial-targeting stores with ubiquitous brands are in the malls.
So first off, my advice is to re-think your distribution strategy and store locations. More non-mall, mixed-use neighborhood lifestyle shopping areas, and localized assortments selected according to consumer preferences would be a start.
Millennials’ behavior of 24/7 shopping, but not buying, was validated by the TIG study. Results reveal that nearly 50% of those surveyed say they regularly browse for items that they don’t necessarily plan on buying. And while these young consumers are shopping or browsing almost non-stop, on every conceivable electronic device and also in stores, 36% say they are only buying things they feel are necessary (for which only one-third say they will pay full price). This seeming lack of impulse or “wants” buying is somewhat confounding since marketers are bombarding Millennials in-store and on every device all the time with every conceivable type of ‘deal’ one could imagine.
The study calls this kind of shopping, but not buying, behavior “fauxsumerism” (although I prefer to call it “contraconsumerism”). And those shoppers practicing the non-buy are “NOwners.” The study further amplifies how Millennials’ values and lifestyles demand serious strategic online re-thinking among retailers and brands. Millennials find that browsing and shopping on all of these devices is more like entertainment acquisition, and they are beginning to favor renting, bartering, trading, and sharing (what TIG calls a whole new “sharing economy”), over ownership. And there is another wrinkle: Millennials are disintermediating the whole retail platform by becoming entrepreneurs in their own right. With low barriers to entry, they are setting up shops online and creating more websites. Trust me, the world does not need one more entrepreneurial website.
And there’s a growing social justice challenge for brands: 32% of Millennials have stopped buying from companies that have social practices they find unacceptable. If you don’t stand for something, they will make it up for you.
So how does one manage this “double trouble?”
First of all, if Millennials view shopping as entertainment, which is more important to them than actually buying, the malls and the brick-and-mortar stores must become compelling destinations for entertaining experiences. Hey, The Robin Report has been shouting from the rooftops about the importance of experience for years! If it’s not fun, not meaningful, and not memorable, there really is no reason for consumers to shop there.
Secondly, retailers should analyze merchandising strategies to see how they might participate in a whole new “sharing economy,” trading, bartering, or whatever other behavior the Millennials are finding desirable over traditional transactions. There are many brands already doing this with success: SquareSpace, Uber, Airbnb, Rent The Runway and RealReal.
And finally, you better get on the “do-good” train or it will leave the station without you.