How Millennials Will Drive Retail Personalization
Updated: Nov 27, 2019
Today’s guest post was written by Cory Hewett, CEO for Gimme Vending
Millennials are now the largest generation working today, growing past Gen-Xers. With this changing of the guard, the retail landscape is in the middle of its own rebirth, and like Blockbuster and Sears can attest, being an iconic American brand assures no asylum against this disruption. Now that millennials hold the retail purse strings, today’s retailers are faced with a mortal question. What will drive their purchasing decisions? For many, the answer is personalization and authenticity. Personalization is an experience and something that is quickly becoming an expectation throughout the consumer’s journey.
Millennials are also more open to giving out personal information—especially if they get something in return. According to research from Aimia3, half of millennials would share personal details to join a rewards program, while 36 percent of millennials would do so to gain access to a website.
Retail personalization isn’t embroidering monograms onto shirt cuffs or key-ring grocery store loyalty cards. Personalization is about building a connection, a relationship. It’s about self-realization for the retailer to understand who they are and who they are perceived to be. It’s about knowing the customer better than they know themselves in the area where value is provided. It’s the magic of Netflix accurately making individual suggestions to each viewer about shows they’ll love to watch instead of a big network channel playing the same show every Tuesday night to lure some percentage of viewers in a nationwide numbers game. It is critical that retailers integrate personalization into their overall strategy but especially the shopping experience, especially when it comes to millennials. I should know, I’m one of them.
My generation was raised in the digital age. We developed our own content on social media. We used Google and Chegg and college forums to get help with our math homework. We learned how to tie a tie and dice an onion and play a guitar from YouTube videos. Based on what we were recording, reading, and watching personalization become a natural part of all these processes with the comments, links, and next videos being all about us and guessing what we wanted to do next. Our expectation and demand for this to follow us into the real world is unabated. Want a piece of our $200B in retail spending this year? Build us an individually tailored experience. Treat us like some percentage of 323 million? You won’t be relevant in our purchase decision making… you won’t exist.
According to a recent study, personalization is a high priority in driving loyalty at the following percentages by generation:
Generation K — 54
Millennials — 52%
Generation X — 48%
Baby boomers — 40%
This isn’t a relationship of unilateral expectations though. We will happily part with personal information if it means getting a tailored experience in return. (Note: for some of my peers, I’m not sure if they realize posting all the details of their life to social media is opt-in). We are a data rich generation, driven by information and data. Want to know our political views, educational background, job experience, Apple vs. Android preference, favorite restaurant/movie/book/color, even a picture of every meal for the last six years? If we haven’t already posted it, we’ll trade you for getting more of what we love sent back our way. You can know everything you want about us in exponential quantity more than was ever wildly plausible with the last generation.
In practical terms, what does this mean for retailers, and more specifically for food retailers? It means the future is grim for big-box, “herd” driven grocery chains. Sorry Kroger. It means on-demand-delivery and bodega-like-mini-stores are the new black, boldly back in vogue Their future is by no means secure, but they are well-positioned to provide tailored shopping pleasure that Publix is damned to watch from the other side of the hill. We use apps to order deliveries and virtual wallets to pay for them. By doing so, we’re sharing what we like, where we live, which competitors we’re comparing, and the triggers that capitalize on our impulse-buys — the new food retailers are eating all this up! It’s no accident AMEX pings my phone with a California Pizza Kitchen coupon when Apple Maps tracks me driving away from the office at lunch time.
Culturally, logistically, the industry best positioned to take advantage of this retail upheaval is unattended retail. Consider this: grocery stores figuring out how to empty all stores of all employees, except for brief daily visits? Classic vending companies have already solved these problems and are now expanding into brand-new arenas, like operating micro-market stores and kiosks with premium fresh foods, and are enabling phone-based payment acceptance across their entire operations. Throw in the availability of some great new technologies that make it practical for these operators to individually learn each of their customers, their preferences and shopping patterns, and now my phone shows me offers for my favorite snack and the nearest vending machine where to find it, almost magically at the moment I start to think I could go for break… Again, it’s all about personalization.
Original Post: https://www.usatech.com/blog/millennials-personalization/