Why Younger Consumers Are Hitting Retail Locations Rather Than Shopping Digitally

While some may believe that millennials and Gen Z might prefer shopping digitally, the contrary actually appears to be true. When Walmart recently stopped selling handguns and some rifle ammunition, the move was in reaction to the mass shooting at its El Paso, Texas, store last month. But it also probably had to do with the giant retailer’s desire to attract more millennials and that group’s interest in social justice issues. That’s the well-educated guess of consultant Bob Phibbs, CEO of The Retail Doctor. “Millennials identify with making the world a better place in a time when the government can’t,” said Phibbs, who noted other socially conscious moves by brands like Nike (think Colin Kaepernick), Starbucks and Target, whose policies speak to the same young consumers. [kickout id="2"] Social consciousness is just one way that a growing number of retailers are wooing millennials into physical stores at a time when ecommerce is booming. For example, Lululemon Athletica recently opened a huge experiential store in Chicago that includes meditation and workout sessions, a health-food restaurant and a space to showcase local businesses. Indeed, Lululemon expects that about 10% of its stores will be experiential by 2023. “It’s not about price and promos. It’s about an authentic experience and feeling that [consumers] matter,” said Phibbs. “The days of mass market are rapidly dwindling. You can’t be everything to everybody. But you can be amazing to a niche.” The timing is critical, too. Consider that 43% of millennials and Gen Z are likely to increase their in-store shopping this year, followed by two older groups—Gen X (29%) and baby boomers (13%)—according to a recent study conducted by Oracle NetSuite, Wakefield Research and The Retail Doctor. The study also shows that emerging tech in retail stores—such as screens that allow consumers to try on makeup virtually or view tutorials—is most attractive to millennials (50%) than other generations, followed by Gen Z (38%). But technology isn’t necessarily a primary driver. “The purpose of millennials' in-store purchases may be more need-based than want-based,” said Gregory Zakowicz, senior commerce marketing analyst at NetSuite. “Shopping when they need something and being able to take a product home with them, be it diapers or dishwasher detergent, is important.” Some marketers may be course-correcting too hard, focusing too heavily on ecommerce business without truly understanding younger shoppers’ motivations, said Molly Hop, svp of North American commerce strategy at Publicis Media. [kickout id="1"] “Researching and discoverability for more higher price-point [items] is going more digital, but they’re actually going more in-store to do the research and to do their own comparison shopping,” Hop said. Hop referred to Publicis’ learnings from the Intent Lab, a partnership between Northwestern University and Publicis’ Performics unit, which focuses on customer experiences and targeted media buys. Intent Lab findings show that consumers in general trust images more than words when searching for information online. But the younger the consumer, the lower the trust, which contributes to their interest in surveying the options in person. A Publicis health club client is an example of this. As younger consumers become more serious, they look at shots of available equipment, but it’s at the gym that many of them make their final decision where they can actually experience the surroundings, Hop said. As utilitarian as they may be about items like diapers, price point isn’t the primary focus in many instances. More than half of Gen Z and millennials are willing to pay more for a product in order to have a more personal shopping experience, with millennials leading the way at 63%, according to the Oracle NetSuite, Wakefield and Retail Doctor report. That compares with a 42% average for all generations. “Look at Gap, with their constant 40% off sales, and a lot of mall retailers that are hurting. They seem to be thinking, ‘We’ll put more merch on sale [to increase revenue].’ But that just doesn’t seem to be the driving factor,” said Phibbs. Instead, the desire to make smarter decisions is motivating many younger adults to visit physical stores. “Millennials aren’t just deal seekers. They are more thoughtful, and they take a lot of pride in making the smartest purchase and not just the cheapest purchase,” Hop said.