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The Millennial market

The Millennial market
Wednesday September 27 2017

How the high street can use technology to tap into millennial spending power By Henrik Nambord VP of EMEA sales for RichRelevance

Millennials. It’s a word that Psychologists at the University of Warwick recently revealed as being in the top 11 words that fail to make people smile, but love it or hate it, it’s also loosely representative of a generation of shoppers that are bringing new expectations, attitudes and spending power to the UK retail sector.
 
The tail end of the Millennial generation (born in 1995) is now entering the workplace and with that comes an associated disposable income. Given our understanding of how many younger people are prioritising experiences over ‘stuff’ – what are the implications on the way retailers invest in technology as they clamour for a portion of pay packets and brand loyalty in a retail environment characterised by choice?
 
Getting up close and personal
 
There are a host of connected technologies that resonate with younger shoppers, allowing them to seamlessly connect online and with in-store experiences. These range from voice recognition technologies for product search, to digital screens to offer shoppers more choice and personalised recommendations. Recent research from RichRelevance quizzed over 3,500 shoppers in the UK, US, France and Germany about the kind of shopping technologies they found creepy or cool, bringing to the fore some data-driven technologies that may help retailers win over younger shoppers.
 
Top 5 coolest retail experience technologies according to UK consumers aged 18-24
 
1. Interactive digital screens and changing room mirrors that display complementary products for what you are trying on are viewed as overwhelmingly cool by both 18-24 year olds (65%) rising to 70% among 25-34 year old shoppers.
2. Fingerprint scanning on the shop floor for automatic payment and home delivery was universally popular with respondents: 62% of 18-24 year olds gave it a ‘cool’ rating.
3. Contactless stores where you simply leave with items and your account is automatically charged got the ‘cool’ vote for 51% 18-24 year olds,  54% for 25-34 and an even higher 56% for 35-44 year olds.
4. Robots that guide you to specific products in store seem futuristic but were deemed ‘cool’ by 55% of 18-24 year olds – significantly higher than older generations(by up to 25%) .
5. Voice recognition for product search and ordering was rated cool by 47% 18-24 year olds, but actually proved even more popular with slightly older shoppers; ‘cool’ ratings rose to 53% for 25- 44 year olds and 58% for shoppers aged 35-44.
 
Data should inform experiences, but not take away freedom of choice
 
Overall it seems younger shoppers are open to sharing more data for an overall experience (89% happy to do so, higher than all other age brackets). However, individual choice is still important for younger shoppers. The technology with the creepiest review from 18-24 year old shoppers was AI ordering and choosing products on their behalf.
 
In-store facial recognition technology that relays shoppers’ preferences to staff was considered ‘creepy’ for the majority of respondents, but attitudes are changing. Shoppers aged under 34 were the most open to the use of this technology (up to 49% aid it was cool), and overall this year 27% respondents said this technology was ‘cool’ – representing a three-fold increase from 2016 responses to the same question. Broadly speaking though, technologies that required little or no active engagement from the customer, such as facial recognition or automated product ordering without any human input, were considered the ‘creepiest’ by all respondents. 
 
A contactless store is perhaps some way off for many, but Amazon’s contactless ‘Go’ store trial signals a potential future for the bricks and mortar retail experience. It was in the top ‘cool’ concepts for UK shoppers aged 18-24, and its resonance with shoppers aged 25-44 may signal it has wider backing and could be a sign of things to come. It’s a similar story with interactive changing room screens and voice recognition, which could prove savvy tech investments.
 
Comscore predicts that by 2020 50% of all searches online will be voice searches. A great example of a voice recognition in a retail environment is Starbucks, whose ‘My Starbucks Barista’ allows customers to place their orders through the iOS app and has the ability to customise your orders based on previous history.
 
The context of the technology’s use is paramount, but using voice recognition to bring the insights of ecommerce in store and get consumers to the products they want, faster, is a major differentiator for stores. It makes shopping frictionless and rapid for a generation of millennials who are pretty used to having everything on-demand.
 
So where does this leave retailers? 
 
When the consumer is constantly connected, it stands to rights that bricks and mortar stores have the opportunity to connect and personalise the shopping environment to the customer. 
 
The fact that 89% of 18-24 year old consumers in the UK are happy to share more data for a better retail experience paves the way for AI driven decision making, so long as it walks the line of being complementary to customer choice, rather than too prescriptive and unknown to customers.

Tagged as: Millennials | Starbucks | technology | RichRelevance