Millennials Look At Retail Differently
When we think of the evolution of retail we think mainly about the ways in which technology has impacted the segment: Payments are faster, inventories are managed more efficiently and there is a synergy between online and offline shopping. But the entire idea of shopping and purchasing is also being turned on its ear. The next generation of customer, the Millennial, is not sold on buying items that are generally thought of as standard purchases.
As millennials come of age, they’re an increasingly important demographic for the retail industry.
Turns out that Millennials often choose not to take ownership of products. They do plenty of research, and, frustratingly, they tend to be shoppers rather than buyers, according to TIG. They are much more attracted to a service or rental economy. Think about the huge success of ride-share programs such as Uber.
But while its not unusual to rent a car or call a cab, some items and services don’t comfortably fall under the rental umbrella. Like clothing. Sure, for men, the renting of formal wear generally begins with the high school prom. Years late, a tuxedo may be purchased if the gentleman’s career necessitates, and there is no harm in wearing the same tux to multiple events. But for women, it’s a whole different ball game.
Career women faced with myriad black-tie events or socialites with filled dance cards, the rental option was not available. And then came Rent the Runway, offering 65,000 formal designer dresses, plus a wide selection of accessories for four-day rentals. The concept plays perfectly for value-conscious Millennials, who recognize brand name prestige but may not be able to or want to pay $800 for a dress they can rent for $100.
The RTR model is novel also because shoppers can use the service two ways, either completely online, or in store. Online, shoppers can order the same dress n two sizes, to ensure a proper fit, which is a great customer service benefit. Where the idea really shines is in its brick and mortar stores, however. For instance, at the Chicago store set to open April 30, dressing rooms have selfie mirrors and iPad minis. In terms of catering to its target audience, RTR’s got it going on.
The ability to share the experience with friends is critical to appealing to the Millennial customer. For many of them, “sharing” is as important as “having.” The sharing creates or enhances a relationship — and that is what is important to this shopper. Providing that extends an aura of goodwill over a brand, product or service. So retailers that help Millennials connect and build their communities will be the most successful in encouraging loyalty.
