Are Millennials a Lost Cause or Missed Opportunity for Retailers?

A growing area of research is focusing on millennials and their retail purchasing habits. The 18-33 year old age group is the new target that many retailers are looking to court, but few have been able to crack. But are these young adults ripe prospects that we should be targeting now? An article in Furniture Today poses the question on many retailers’ minds – are they a lost cause or missed opportunity?

Millennials, much like the baby boomers, are one of the largest demographic groups. It’s no surprise that top researchers are investing beau coup bucks into finding what makes them tick and how they prefer to purchase. The FT article suggests that millennials account for a meager 7% of mattress sales, but compose 26% of total sales on youth furniture, 25% of mirror sales, 22% total dollars spent on desks, and 20% of total stationary sofa sales. Rather than ruling the millennials out as purchasers in the mattress category, the author suggests that the small percentage of mattress sales should be seen as an opportunity for growth. In other words, retailers are not successfully meeting the needs of millennials in the mattress department, and thus, they are not bringing them in as customers.

I found this position interesting, that the small segment could mean big growth. In working with our furniture clients we often review research and look for those sorts of growth opportunities to appeal to a different demographic or expand sales in a certain category. For us, the strategy is always an outgrowth of the data. This made me think about how other retailers target growth opportunities and which nuggets of data or research are worth the investment. Does the potential to tap into a slowly growing demographic warrant budget dollars now, thinking of long term strategy, or do you continue to innovate methods of reaching the demographic that has proven consistent sales with your company?

An article in Forbes suggests that targeting the millennials now might not have the big pay-off that retailers are hoping for. The author, Robin Lewis, references a study that revealed millennials may have a round-the-clock browsing habit, but a very selective purchasing habit. In fact, 36% of those surveyed said they were only buying things they felt were necessary. Likewise, millennials revealed that they enjoyed browsing online because it served an entertainment function.

While some may dismiss this tech-savvy group, I see the longer term benefits of monitoring and evolving with the needs of millennials and other cohorts. In fact, in an earlier post, we explored how some of their struggles could create long term problems for retailers. But there are some tactics you can use now.

Another article on millennial shopping mentions that 50% of millennials find a 20% off discount enticing, 69% read product reviews on their phones, 75% would be most drawn to brands that deliver real-time discounts while shopping and almost 85% research products before making the purchase. These sorts of habits are very characteristic of the millennial shopper, but are not exclusive to the young group. As technology advances, retailers will need to keep pace to appeal to the changing needs of the broad audience. The younger generations are often the first to experiment with new technology, but eventually other groups follow suite.

My thoughts, millennialls are a generation that retailers should watch, be considerate of and listen to, but are not a large group buying furniture and mattresses now. Make the millennial’s shopping experience fit with their needs and you’ll appeal to the next big generation of shoppers when they are ready to buy.

Heather Pence, browsing through my generation's shopping habits