The morphing of the ‘aspirational’ millennial
Retailers like aspiring young people. That’s because they are often keen to reinforce an image they have of themselves and frequently look to brands to do that. That could be in the form of hero worshipping David Beckham – right down to the clothes and fragrance he is wearing and/or promoting, or via a whole plethora of luxury brands from Gucci to Comme des Garçons that resonate with them.
August 2017 | by Garry Stasiulevicuis, President
The questions is: is this generation really as aspirational as is often suggested? And can such a broad age range have very similar buying habits? In some channels such as duty free and travel retail one might think so given the Millennials hype that abounds, but shoe-horning millions of people into a specific character traits, or defined way of shopping, is never a good idea.
Spot the difference
We at Counter Intelligence Retail have done out fair share of insight work on Millennial travellers and shoppers. We look for buying trends based on demography of course, but in a global market like duty free and travel retail care needs to be taken: a Russian Millennial is not the same as a Chinese Millennial and, equally, a city-dwelling Chinese Millennial will not always be looking for the same products or experiences as one from the countryside.
In the US, research by our parent company, NPD, suggests that consumers have dialled back sharply on aspirational purchasing. In fact, as is also the case in the UK, the well-heeled have taken to frugality with relative ease and are even becoming conspicuous consumers of it. A glance around a Lidl or Aldi supermarket in some UK locations is evidence of the trend, as is Aldi’s recent announcement that it will create 4,000 jobs as it expands.
A recent study from NPD Checkout Tracking confirms this. It showed that in the US, about 19% of spend at Dollar Tree, Dollar General and Family Dollar stores came from households with an income in excess of $100,000 a year. NPD says that the dollar-store phenomenon “is even more significant among Millennials”.
It is also definitely the case that travelling Millennial consumers – the Chinese included – are showing a preference for more authentic experiences, not just a shopping excursion to the nearest luxury mall. At the same time, they want more value and are not as awestruck by the luxury labels as they used to be. A Furla bag is now an acceptable option to Ferragamo if it ticks the right boxes.
Millennials have an independent mindset and are effectively becoming a post-aspirational consumer. This makes them much harder to target. Getting those boxes ticked can be a challenge.
Value comes in many forms
The first point to make is value does not necessarily mean cheap. It means delivering authenticity – which can be in the design, materials and workmanship of a product, or in the service element. Value is a perception and brands and retailers can influence that. Just be aware: Millennial shoppers can also see through the fake marketing messaging of a ‘limited-edition’ line of bags in canvas but price-inflated nearer to the leather ranges.
Millennials are not afraid of spending money. Genuinely unique or individual items get their attention – and their wallets out. A vintage collectible jacket can easily have more credibility with friends than the latest season collection from Chanel. Such so-called ‘signature’ items are usually well-researched before buying, one reason for travel retailers and brands to have an online presence.
When it come to retail, Millennials still buy in regular physical stores – much to the relief of DF&TR operators – but they are spending more and more online. Here they are in control and not feeling like they may be manipulated into a purchase. The end result is that they can spend more.
According to NPD, in three categories — clothing, electronics and home/kitchen — Millennials spend more than twice as much per order online as in-store. The gap is even bigger for older Millennials (aged 25 to 35) than for the 18 to 24-year-olds, perhaps because they have more discretionary income to throw around.
DF&TR operators are therefore missing a trick if they do not – at the very least – offer an omni-channel option with a website for click-and-collect at the airport. Without this a bigger basket is potentially lost. Online allows for relaxed browsing, prompts to products the user may have looked at before but forgotten about, and a more focused experience.
The Millennial shopper is evolving – as we all are. But even in their post-aspirational world DF&TR operators can reach them if they work out what their sweet spots are and invest in exploring them better.