Millennials are hard to target, but some brick-and-mortar retailers are finding ways to bring them in.
A brick-and-mortar retailer could be forgiven for wanting to give up on millennials. They appreciate experiences more than physical items and fully embrace the ease and convenience of shopping at places like Amazon. That makes these 18-to-35-year-olds a hard demographic for physical retailers to capture.
Some retailers, however, seem to have landed on winning formulas. Looking at the latest numbers, here are four traits shared by retailers who seem to be doing well with millennials:
Social media savvy
Ninety percent of total retail sales happen in brick-and-mortar stores, but companies that use social media channels cleverly and strategically are seeing a clear advantage.
For example, Home Depot has had success using Pinterest to offer shoppers inspiration – and Pinterest’s “Shop the Look” feature to capitalize on that inspiration and drive sales. Its rival Lowe’s has worked with DIY bloggers and social media influences to create original material, furthering its digital reach beyond Pinterest (where it also has a presence).
Using social media to complement, rather than supplant, store-based experiences is working for both chains. Lowe’s, in particular, has been able to add to its store count, a critical step in helping it win market share from Home Depot.
Speaking of store-based experiences, companies that are giving shoppers a reason to visit one of their physical locations are seeing nice numbers.
For example, beauty chains Ulta Beauty Supply and Sephora (owned by LMVH) lure customers with “try before you buy” samples. Some locations also offer hair and skincare services. These sorts of offerings can’t be replicated by online shopping and help nurture customer loyalty and enthusiasm.
It’s not just yoga pants –millennials seem to love anything “athleisure.”
Since the recession of 2008, Lululemon has been outperforming the apparel industry. Interestingly enough, 70 percent of the company’s revenue is generated in physical stores, not online. “Lulu,” as its fans call it, attracts in-store sales by creating a strong sense of community. For example, many locations offer free yoga classes.
That sense of community is a page rival Athleta has taken from Lululemon’s playbook. The chain has been opening locations near Lululemon in hopes of siphoning off some of its customers and has focused on creating a wellness-focused store atmosphere. That’s a tactic that has worked for parent company Gap – Athleta and the Old Navy brand continue to be the bright spots in its portfolio, while Gap and Banana Republic continue to shutter locations. In the past four years, the number of Athleta stores has risen 128 percent, while the number of Gap stores has decreased by 16 percent.
A good deal
Customers of all demographics have been conditioned to loosen their purse springs if and only if they perceive they are being offered a good deal. That trend is especially pronounced among millennials, who are more price-conscious than they are brand-loyal
Among department stores, Nordstrom and Kohl’s are predicted to post double digit earnings growth this year. For Nordstrom, that’s thanks in part to Nordstrom Rack, its successful chain of outlet locations. Nordstrom has opened 189 Nordstrom Rack locations in the past 10 years. Kohl’s, which carries popular brands like Adidas and Nike (as well as diffusion lines by the likes of Vera Wang and Ralph Lauren) at accessible prices, has opened 201 stores in the same time period.