Shopping for Millennials
Millennials now outnumber Baby Boomers in the U.S. and will quickly dominate the global workforce. This vast, youthful and increasingly important generation is one of the most desirable — and demanding — groups of consumers.
Their influence is forcing companies to adjust to changing consumer preferences. This new generation is seeking:
- Ways to minimize time spent shopping, while maximizing choice and convenience.
- Better shopping experiences, which includes knowledgeable staff and personalization.
- A better understanding of the impact their purchases have on the world.
Retailers are searching for ways to present content and recommendations that resonate in different ways: lifestyle, aspiration, convenience and channel preference. Industry leaders use intuitive marketing tools that influence product selection and personalize shopping. They embrace the experience economy and pursue disintermediation, approaches that appeal to digital consumers. Disintermediation, or direct-to-consumer models, have proven to be effective for retail brands seeking to reach digital natives.
However, those new pursuits require internal changes, including deskilling of traditional roles and amplifying human potential with artificial intelligence (AI) and real-time data.
Self-learning and hyperpersonalization
One of the most valuable approaches to wooing this new generation of consumer is hyperpersonalization. Advanced technologies empower brands to move beyond the formative stages of personalization, which span from anywhere, anytime, anything shopping to seamless online experiences. A self-learning retail ecosystem, fueled by AI, can discover market potential and also design personalized experiences around merchandise. Hyperpersonalization empowers retail stores to differentiate the experience for every visitor and each visit while retaining a universal brand identity.
This hyperpersonalized approach is at the core of Infosys’ Live Enterprise Suite, which uses “thick data” and big data to generate predictive analytics that boost conversions and cultivate customer loyalty. The self-learning ecosystem takes a persona-based approach to create immersive experiences and personalize customer journeys.
When optimized, a self-learning retail store collects behavioral, demographic, social and the transactional data of consumers. It then applies predictive analytics to convert this data into contextual insights, and decides what, when, where, and how to promote or sell, and to which customer. An analytics-driven self-learning system evaluates existing personalization strategies and detects opportunities to collect data required to improve recommendations and enhance the product.
One leading example of this approach is the U.S. fashion retailer Nordstrom. The company combines big data and emerging technologies to deliver personalized shopping experiences, both online and in its 225 physical stores. Customer data from social conversations, website visits, point-of-sales systems, loyalty programs, personalized credit cards and a mobile app are used to understand preferences and create profiles. Those profiles are used by marketing and sales teams to personalize customer engagement. Moreover, the analysis of shopping trips — how, where, why and when — improves effectiveness of promotions and ensures unobtrusive assistance.
Nordstrom has tried, tested and fine-tuned several customer engagement solutions. A cross-channel system provides visibility into global inventory and lead times, which is valuable for product recommendations as well as buying decisions. A visual merchandising tool enables brands to personalize product presentations for store visitors. Nordstrom launched the TextStyle app to connect customers with store associates and personal stylists. Granular customer data enables the retailer to make strategic decisions, including store location and floor plans, to please customers.
Most notably, Nordstrom has established an Experience Concept Store in Seattle to test innovations, including curbside pickup. Successful efforts will be implemented at the chain’s other stores.
While Nordstrom has excelled at this new approach, which features the blending of online and physical retail experiences, other companies are still trying to find their way. Recent Infosys Knowledge Institute research, which surveyed more than 1,000 business leaders, found that the retail sector was in the middle of the pack in its digital transition, a requirement for hyperpersonalization and other needed initiatives.
To reach Millennials, retailers need to accelerate their technological innovations and refocus their approaches. Only then will they be able to cut through the marketplace clutter and differentiate themselves from their competition, almost all of whom are chasing the same demographic.