The millennial customer poses a challenge to retailers as they increasing consider a brand’s values as part of the retail equation. Ian Jindal considers new relationships beyond promotion and price.
RETAILERS OBSESS about offering value for money to their customers. The National Audit Office helpfully summarises value for money as ‘spending less, spending well and spending wisely’. Customers rationally would prefer to buy the cheaper of two equivalent goods, to buy that product in the most efficient fashion and importantly to be confident that they’re buying the appropriate item in the first place. Insofar as we are to avoid a battle simply on lowest price, brands and retailers focus their efforts on creating and communicating points of difference and distinction that – in the consumer’s mind – make a product the ‘wiser’ purchase. This might entail emphasising longevity (where we’re invited to amortise the higher cost over a longer implied useful life) or increasing desirability (the must-have dress this season) or relevance to one’spassion (high-end hifi equipment where the marginal gains are not valued equally by all music-lovers). All of these are familiar to brand marketers.
At the recent Millennial20-20 conference in New York, however, we heard, over two days, a succession of speakers note that, in addressing a millennial and next-gen consumer, the rewards and demands of authentic retail were greater.
Millennials – roughly those born after 1980 and reaching adulthood at the start of this century – are characterised by their use of technology and social media, liberal attitudes and an appreciation of experience over acquisition of possessions. More usefully, however, is reference to a ‘millennial mindset’ that is not bounded by age but rather an attitude that values openness, authenticity and communication.
Authenticity is a key concept for the modern consumer and increasingly there’s an expectation that our brands need to ‘behave and act’ in accordance with values, and not simply promote individual products as valuable.
Social and digital media have increased transparency, scrutiny and co-ordinated responses to our daily activities, and this goes beyond comment upon our individual products and now covers the way we behave, conduct business and interact in society.
While we see protests, boycotts and opprobrium over corporate advertising, use of material or business activity, the consumer’s interaction with us is not limited to ‘single-issue’ or one-off mobilisation. The millennial-minded consumer wants to like and respect the company with which they’re doing business. Perhaps I should say ‘with whom they’re doing business’ since increasingly it’s as if the corporation is seen as a living entity and the behaviour is assessed as if for a person.
At the conference, we heard from Warby Parker’s founders on how they fund glasses in US public schools for the 200,000 children who need but can’t afford them. We heard from the CEO of Boxed who established a college fund so that all of his employees’ children could afford college, and who personally cut the tax on all sanitary and health products they sell (dubbed the ‘pink tax’ that rates such products as ‘luxury items’). The CEO of Chobani, a yogurt manufacturer, has changed the use of additive in milk, made staff co-owners and funds food startups that can improve food quality and access.
None of these actions were as a result of consumer demand, and neither did anyone claim that there was a direct ROI or commercial imperative to undertake these social, societal activities. Rather they were driven by the brand’s values. Each founder, team and investors simply wish to conduct business in this sustainable fashion.
The research is clear in pointing out that millennial consumers do not buy yoghurt as a direct result of these values. Rather, these values chime with the staff and consumers so that, in a crowded sector, the brand is seen as a good citizen, a good person with whom to deal, and to have a resonance beyond the product. Call it ‘personality’, call it ‘values’: it’s certainly not marketing or promotion, and it’s clearly a valuable asset in sustaining a long-term profitable and important relationship with the modern consumer.
Consumers will reward retailers that connect with consumers more fully than simply around the buy button. The best retailers and brands will marry process, technology, product, purpose and people into an offering that chimes with the consumer: from ‘value retail’ to ‘values in retail’.