Generation Now: The 21st century consumer is changing the face of retail
Rapid social and cultural shifts, from demography to technology, have changed the shopping preferences and priorities of a generation. Millennials and Post-Millennials (those born between 1992 and 1999) take a very different approach to spending decisions from previous generations, putting a greater focus on speed and convenience than ever before.
If they are to attract and retain the business of these increasingly influential young consumers, retailers have to learn how to satisfy the needs of this 'Generation Now'.
The demands of being on-demand
Technological innovation has dramatically altered the retail landscape, and the ways in which buyers and sellers interact with one another. E-commerce has overtaken traditional bricks and mortars shopping, with online sales predicted to make up 15% of the UK economy by the end of the year.
'On-demand' has become the new frontier in the online world, with over £3 billion of capital already invested in on-demand companies across sectors as diverse as health, household services and entertainment. The same-day delivery market in the UK has surged to approximately £550 million in size, and only looks set to increase further, having already grown at 5% per year since 2010.
This surge in instant (or as near to instant as possible) gratification has been propelled by the ease of access which consumers have with personal technology. With 41% of Brits claiming that they have already invested in tech in order to get the most out of life, consumers are increasingly making the time-consuming shopping trip a thing of the past. Millennials in particular, who have grown up with the ability to access everything from music to films to social media through a quick swipe on their phone, now expect all purchases to arrive just as seamlessly. With over 70% of online sales now taking place on a smartphone (according to Snap Retail), the shift to real-time product availability is a reality that retailers need to adapt to if they are to compete and grow.
The new wave of consumers is a demanding and assertive generation. They expect to have fast, uninhibited access to goods and are keen to adopt new tech if it will save them time. A recent PwC poll found that 77% of young people save time by using self-checkouts, rather than interacting with a human cashier. This reflects the effects of the demand for 'now' - a shift from human interaction in favour of speed.
Time and convenience have been brought to the fore, with 30% of young people claiming they would abandon a transaction if the online platform was not mobilised for mobile phones. A colossal 89% said having access to real-time product availability information would significantly influence their shopping choices. This demonstrates the need for online retailers to track and update their offerings in real time.
These trends also defy traditional stereotypes, with a relatively slim gap between the genders. Business Insider found that 33% of men and 40% of women aged between 18-34 would happily buy everything online. Generation Now, raised to rely on tech for everything from dating to studying, are united in demanding that the market meets their needs when it comes to shopping. Indeed, 64% of millennials admitted they were more likely to purchase from a retailer that offered same day delivery.
The fast-paced lifestyle and culture adopted by Generation Now has also been fuelled by the rise of digital giants. Amazon, which commands the custom of 56% of shoppers, is leading the charge towards on-demand with its emphasis on fast, low-cost delivery and high profile experimentations with drones. This is raising consumer expectations across the board and all retailers need to adjust accordingly.
Making the move to on-demand
Fortunately, you do not need to have your own fleet of autonomous drones to embrace on-demand retail. There are plenty of other ways to adapt your omnichannel and logistics operations to suit Generation Now.
First of all, you don't have to do it alone. Logistics partnerships are often a more efficient and cost-effective way of entering the on-demand world. The right partner will give you access to a pre-existing on-demand logistics infrastructure, thereby creating economies of scale and giving you the ability to offer high quality, reliable same-day delivery in a simple, cost-effective way.
Another simple way to make on-demand work for you is to invest in technology that allows you to make the most of your existing infrastructure. With the right systems in place, an existing network of brick and mortar stores can double up as fulfilment centres for online orders, shrinking the time needed to go from payment to delivery considerably.
Lastly, don't forget the golden rule of retail: know your customer. The services that customers want, and how much they are willing to pay for them, will vary for every single retailer. Taking the time to experiment and research will help you to properly understand what your customers want - and that's always going to be the key to success.
With Accenture estimating that millennials spend around £465bn a year, there is no doubt that Generation Now is hugely important for retailers. By staying tuned in to the needs and expectations of the 21st century consumer, retailers need not be put out by digital disruption - rather, they can make the most of it.
Article written for InternetRetailing.net by Tim
Linssen, Head of Product at on-demand logistics startup Quiqup