Serving the Storeless

Younger customers — the next generation of big spenders — will buy from you. But they want a very different shopping experience.

By Lee Peterson

Over the last few years we’ve talked to thousands of consumers, young and old, about what they love and hate about shopping. We’ve uncovered lots of insights about emerging trends and audiences, but one segment has intrigued us more than others: the “Millennials.” And we’re not alone. A lot has been written about the buying power and somewhat cynical preferences of this huge, tech-savvy, and impatient category of young shoppers.

I think it’s time we look at Millennials through a new lens. In fact, let’s start by giving them a new title – one that’s not just more descriptive of who they are, but also better indicates what they mean to the future of retail. From this point forward, I’m calling them the Storeless Generation.

Does that title make you a little uncomfortable? Me too. But the truth hurts sometimes. Time and time again, our studies have shown that young people prefer – by double-digit margins compared to Boomers – any technology that helps them avoid going inside a store. They simply don’t love shopping anymore. To them, it’s a chore…they were raised in a bland big box world that largely lacks a meaningful experience, and certainly doesn’t provide the efficiency and choice they get online. So their loyalty has drifted away from the mall and onto their mobile devices.

The Storeless Generation has come of age at a time of dwindling physical third spaces and burgeoning virtual third spaces. And yet, ironically, they’ve told us they find both unsatisfying. This means stores still have opportunities to win them back. That’s just one of the major findings in our latest report, The Next Killer App: Stores, released this summer. The report is jammed with statics, stories, and analyses to help retailers understand the Storeless, and tactics to help better respond to their needs and whims.

Serving the Storeless

I’d like to touch on one insight from the report that may surprise you (it did me). This just scratches the surface; the full 41-page report explains it (and much more) in greater detail.

The power of packaged pick up

In the last WayfinD, I wrote about the potential of BOPIS (Buy Online Pickup In Store), and how it allows traditional retailers to give customers convenient, same-day access to products they buy in a way that Amazon and other online retailers simply can’t. BOPIS takes advantage of existing infrastructure (stores, the expensive part) supported by shored-up online ordering and inventory management (software, cheaper and easier to implement). If the Storeless Generation doesn’t want to visit your retail space, BOPIS lets them shop on their PC or phone, and simply swing by and pick up their stuff. It’s a nice model that’s working well for Apple and some others.

But what about people who don’t even want to enter the store to get their goods? There’s an emerging solution for that scenario, too. It’s giving customers even added convenience by allowing them to pick-up products from multiple retailers in one spot. And it’s being driven not by retailers, but by shopping center developers — companies that have just as much at stake as their tenants, if destination shopping continues to decline.

The idea is called combined retailer pick up, and it’s more than hypothetical – a form of it is actually being tested in Canada right now. Operating under the brand Penguin Pickup, the service provides a single, branded pickup point for multiple retailers in a shopping area. Also known as aggregated pickup, it allows shoppers to buy from multiple stores online (say, popcorn and soft drinks from a grocery, a blanket from a home goods store, and a Blu-Ray movie from an electronics shop) and collect them at a single kiosk. Customers are notified by text, email or call when their stuff is ready for pick up and they simply drive up and have an associate at the kiosk place the goods directly into their cars.

Of course, retailers will pay a slight fee for the service, but it’s worth it – Penguin has built the idea, the customer experience, and the branding. It’s a compelling way to keep shoppers coming to malls; whether they get out of their cars or not, they’re taking home your merchandise. You can learn more about it at www.penguinpickup.com.

Serving the Storeless

Combined retailer pickup isn’t the only variation on the core BOPIS concept. In fact, the new report breaks it down into eight variations, ranging from drive-thru and curbside pickup to self-serve lockers and back of store pickup (which the Storeless uniformly hate, by the way). The report doesn’t just rank these services according to Storeless tastes, however — it also factors in what Boomers prefer, too. The results could have an impact on your fulfillment strategy for the future — check it out.

The Next Killer App: Stores

The white paper provides a detailed look at an emerging existential threat: people don’t want to go into stores. The report starts with the BOPIS option – from the successes to the disasters – and analyzes what young shoppers want that’s dramatically different from previous generations. We surveyed more than 1,500 shoppers, and their feedback reveals how retailers can balance in-store evolution with all-new fulfillment possibilities.

Please visit wdpartners.com/research for more information.

Lee Peterson
Lee Peterson
Executive Vice President, Thought Leadership, Marketing
WD Partners
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