What does your morning Fairtrade organic soya flat white say about you? Or the sustainably designed bag-for-life you tote to your local boutique? What we buy, more than ever, is a signifier of a higher status that illustrates our conscious consumerism. Ethical shopping is on the rise, with over three-quarters of people in the UK saying they now care about Fairtrade.
No group of shoppers have adopted these ideals more than the coveted digital-savvy millennial generation. Understanding the shopping patterns of millennials is becoming increasingly important as they begin to shape the consumer demand of the future. According to a recent report from JPMorgan, millennial spending is expected to grow 15% in the next three years, compared to just 4% for those aged 35 an up. But contrary to popular belief, millennials are not digital-only shoppers, half typically go to physical stores as their primary means of shopping, and 40% prefer to shop locally.
Millennials are the first generation of shoppers to grow up in a constantly connected world in which smartphones are ubiquitous. Yet surprisingly many use digital means to support their brick-and-mortar retail purchases in what we call “omnishopping”, a hybrid approach to shopping. For example, they might go to a physical shop to try out or try on before deciding on a product and then buy it online, or research it online and then going in-store to try and buy.
This presents retailers with a unique challenge. How can they offer the conscious, local service millennials value, while also delivering a seamless and relevant purchasing experience?
Retailers already understand the benefits of using customer data. Our recent survey looked at the connected shopper, how retailers are sharing data and the importance of linking in store experiences to online. It found that seven out of 10 retailers believe their consumers are satisfied with their efforts to deliver more targeted and relevant marketing using data, while nine out of 10 report over the past two years, the value they offer customers has become the most important driver for their business – more important than factors like brand recognition or having unique products. With access to the right data and the digital tools to utilise it, retailers are already seeing the benefits of delivering personalised value to their customers.
But many retailers are worried that physical-digital titans created through mergers like that of Amazon and Whole Foods, and partnerships like Walmart and Google are disrupting the industry and creating an unlevel playing field. On the one side there are companies who own and control huge amounts of customer data, and on the other, those that are struggling to keep pace without access to large data sets and the ability to fully utilise them.
That same challenge presents an opportunity for retailers to compete in the evolving retail landscape, which just need to figure out a way to gain an edge. Retailers understand the critical importance of data, and are working hard to leverage the information they have. So much so that they are now seeing an opportunity to band together and collaborate to level the playing field – by pooling their assets to meet customer needs and drive value. In fact, three-fifths of retailers in our recent survey are already part of a data cooperative.
So perhaps local values can be upheld in a world of digital giants. While it can be challenging to successfully capture data across multiple channels, particularly the complex buyer journey of omnishopping millennials, if retailers embrace the idea of collaboration and the use of data cooperatives to develop a richer picture of their customer, they can maintain their independence and offer an authentic experience on to their customers. What’s more, by sharing non-personably identifiable data, this doesn’t come with a trade off. Millennials, indeed any shopper today, should expect to receive an experience which is personal to them and representative of their values without feeling like they’re bowing to the behemoths out there today.