When it comes to online shopping, Millennials hold all the proverbial cards. They average the highest internet usage every month, and, according to Goldman Sachs, they are the savviest shopping generation in U.S. history with 57% of them comparing prices in store to online product info.
We wouldn’t be doing our job if we didn’t follow and report on the anything and everything Millennial so: here’s a roundup of data and brand stories from the earliest stages of 2018 to prepare us all for the year ahead.
Millennials and Online Grocery Shopping: Actual Wave of Real Future
The market research firm IRI just released a study about online grocery shopping. The results aren’t at all surprising, but they are thoroughly fascinating. Here are some of the highlights:
- 55% of Millennials confirmed that buying groceries online and picking up in person (without a delivery fee) added more convenience
- 58% said that online purchasing with free delivery drove their channel selection
- 44% agreed that online purchasing with in-store pickup was important to channel selection
The survey also revealed that in Q4 of 2017, 28% of all consumers bought groceries online.
Combine that intelligence with recent Goldman Sachs data:
“With product information, reviews and price comparisons at their fingertips, Millennials are turning to brands that can offer maximum convenience at the lowest cost.”
What Should CPGs and Brands do?
In a word: listen. Millennials don’t spend as much as their Gen X big siblings and Boomer parents on luxury goods (most notably: cars), but they love their food, craft beer, and the convenience of online grocery shopping.
What Millennials want is both convenience and value. Give them coupons (survey: 55% of all consumers will download them from retailer/manufacturer websites), allow them to pick up in person for free whenever possible.
Millennials are hip on price (as are the majority of consumers, with 51% looking around for the retailer with the best price), so make sure you’re protecting your MSRP and MAP agreements with retailers.
If pricing remains where it should contractually, brands, CPGs and vendors will retain value across the board.
The Reformation Story
We love stories about small brands that leverage the current climate to shape and introduce a completely new shopping experience. Companies that fuse the in-person advantage of brick and mortar with the speed and convenience of online and digital shopping are not quite new, but they are a developing area of the market. We’ve written about online-only brand Framebridge now offering shoppers a curated opportunity to interact with their products in person via an affiliation with Target.
If you’re not familiar with the clothing brand Reformation: be ready for that to change. Launched in 2009, the company led with a message about sustainability and workers’ rights (all the clothing is fabricated using strict standards that measure environmental impact and better work practices, per language on the site). Millennials are notorious for offering loyalty only to companies that marry mission with product, and when sustainability is deployed as a business practice (and more than just a buzzword), the demo tends to take notice.
According to Forbes: “The making of a pair of Reformation "seamed" jeans, for example, consumes 196 gallons of water, compared with an industry average of 1,656 gallons, and emits 5 pounds of CO2, far less than the average of 36 pounds.”
Shoppers are literally buying it up. Last year, Reformation racked up revenues just over $100M (not bad for a company that’s only done $25M in a round B and was initially self-funded). They’re expanding their physical footprint with new stores opening in Chicago and DC (New York, Los Angeles, San Francisco, and Dallas shoppers already enjoy physical stores).
These stores aren’t quite like anything we’ve seen from a fashion startup yet. They are doing more than opening storerooms. They are reinventing the in-person shopping experience.
From Business Insider:
“Its crowning achievement is the fitting room. Typically, mall shoppers grab the items they like in the sizes they need and retreat to the back of the store. At Reformation, there's only one of each item on display. Shoppers add an item to their fitting room by requesting it on a monitor or asking an employee to scan the barcode. The clothes await them in a "magic" wardrobe.”
Minimalist, uncrowded showrooms are bright and breathtaking, focusing on experience, elegance, and convenience. The store aesthetic gives shoppers the feel of a high-end boutique with prices that, while north of discount stores like H&M, are within range of stores like Free People or Express.
Ever had that moment when you’re ready to try and you can’t find a salesperson on a busy day? Yeah, us, too. At Reformation:
“Shoppers don't have to interact with employees if they don't want to. They can also order an item to their fitting room using one of the monitors, which updates inventory in real time.”
They even addressed what CEO Yael Aflalo calls the “shame spiral” of the typical dressing room:
“A light switch lets shoppers change the lighting for a variety of color temperatures. The sales associate recommended I try "sexy-time," a universally-flattering golden hue.”
(Yael, our female staffers here have two words for you: Thank you.)
Oh, and if you need a new size, select one from a tablet, and a voice on a speaker tells you that it’s now available in the “magic” wardrobe inside your dressing room. Also, the store designers have clearly bought a cell phone or been out in public recently because there isn’t a formal cash register. You can scan and pay right in the dressing room before you leave.
The lesson from Reformation is that tech can make shopping better in any and all channels (not surprisingly: the website loads quickly, is easy to navigate, and will soon feature a plus line).
It’s increasingly important now that brands and sellers that are prepared to leverage technology and data to listen to their customers. If Reformation tells us anything, it’s that shoppers DO like in-person shopping when it’s done well. The grocery story: brands need to follow and monitor your pricing online, and retailers need to up their game when it comes to free online pickup and (potentially) delivery.
Lastly, work with allies that know this story and can help bring your online and offline channels together.