Skip to main content

Retail Strategies Millennial Fashion Brands shouldn’t miss

Millennials or Gen Y, the 20th century last generation, is the first who have welcomed technology and seen it to become a part of their everyday life. Today, fashion retailers are finding ways to reach out and connect with this key demographic. There’s a good reason for the fascination with millennials. By 2025, Millennials  will comprise three quarters of the global workforce. This makes it an ideal generation to tap that is young and has a disposable income to spend on what influences and inspires them.

Millennials have a reputation of viewing the the world through a unique digital lens, unlike their predecessors. Not just that, they challenge the status quo and have broken just about all the rules. Diversity, shared economy, inclusivity and gender fluidity have now become the industry norms. It therefore makes it toilsome for the fashion retailers and marketers to comprehend this generation and rethink their business to keep it  afloat.

According to the India Business of Fashion Report 2017, the Indian fashion retail market which was worth $46 billion in 2016 will grow at a world leading Compound Annual Growth Rate CAGR of 9.7 per cent to reach $115 billion by 2026. In fact, the key drivers to this alluring growth trajectory are Indian Millennials who constitute about one-fifth of the world's youth population.

Millennials have been tagged with labels like Progressive Freethinkers, Boomerang Generations, Self-entitled Brats. But these names are opinionated and less endearing. However from a business perspective, it is just not enough to know who they are and what others think about them. Rather, it is important to understand what defines this generation.

Like any other generation, Millennials are shaped by trends that have influenced their beliefs, values, opinions and behaviours.

Millennials vs Boomers: Comparison of Life Values

The list of above trends (on the left) have a cause and effect relationship with the values seen in Millennials. A comparison of these values between Millennials and Boomers shows how and why both these generations differ. The former puts emphasis on inward-focused values (like Happiness, Passion and Discovery) and Moral Values (like Diversity and Sharing).

This shift in values have aware retailers to mindfully adapt to the buying behaviour of their new target audience. The waning profits across online, mobile or physical retail are alerts for fashion brands to understand how the Millennial customer psyche has changed and what does their target audience expect out of  the retailers.

The Tanner and Raymond model (2012) states four factors affecting buying behaviour that needs to be considered in order to identify and assess variables to understand a customer’s buying pattern.

Tanner and Raymond Model of Buying Behaviour

In the subsequent section, while we discuss new shopping or buying trends affecting the retail landscape, we see them to be a direct outcome of the change in variables under each factor. To help brands stay buoyant in these uncertain times, unique solutions will be put together..

 

New trends in Consumer Buying Behaviour & Suggested Retail Strategies

 

A) In view of Situational Factors

  • Mobile Millennials

We are talking about a tech-savvy generation who uses mobile device for their shopping needs in the same way as coupon books and shopping catalogs used to be utilised.

As per Regalix Research, 33% of the respondents shop online using their mobile phones at least once in a month. Also, the study has found that men are more shopoholic than women when it comes to shopping online through their mobile phones. 63% of men shop atleast once in a month compared to 44% women.

Actionable Tips for Retailers:

  1. Personalise your customer journey. Offer app features that generates tailored experiences that relates directly to customer’s preferences.
  2. Customers like to get real time real time notifications about offers and promotions. Retailers can use Beacon technology to come up with targeted or personalized communication based on the proximity of the customers.
  3. Millennials want in-the-moment care from brands. Emails with 48 hours response time are dissapointing to a generation that expects live communication through social channels.

 

  • Values brand experience more than actual product value

Millennials are experiential driven.  Thus, they feel more loyal to a brand that provides interesting experiences.

Actionable tips for Retailers:

  1. Retailers have to think beyond creating a story around the product. Millennials enjoy being part of the narrative so brands have to think about how to make their customers a part of the story.
  2. Prepare your brand for a listening and participation strategy. Create online communities and develop campaigns where consumers can share their brand related stories or experiences. Millennials are more likely to become fans. For instance, social responsibility initiatives, product/service storytelling, etc.

 

B) In view of Personal factors

  • Blurred Adulthood Milestones

Typical adulthood milestones, Completing School, Becoming Financially Independent, Marriage and Having Children, are being viewed much differently than any of their predecessors. This has to do partly with Economic Unstability/Recession, less social pressure to get married and have kids, debt from education, etc. Many millennials don't consider themselves as adults until 30 years old. As Business News Daily states in a recent article, “Of course Millennials exist — just not in one neat, unified demographic.”

Actionable tips for retailers:

  1. Use multiple data types to reach your target audience – demographic, psychologic, behavioural and purchase based. Age is just one piece of the puzzle.
  2. Marketing to Millennials should be more about identity characteristics and less about youthful faces in advertising.

 

  • Self Absorbed and Impatient bunch

As per the findings of a Pew Research Centre survey, millennials are described as being “self-absorbed”, which means they are pre-occupied with their own feelings, interests or situations. Culture of Selfies, Snapchat and Instagram are only a reflection of this. Not just that, millennials are an impatient bunch and brands need to connect with them really quickly. They are quite sharp in identifying if they have something to take away from it. If not, they just don’t care about it.

Actionable tips for retailers:

  1. Fashion brands should offer their customers a look or a theme rather than just advertising its products. It serves as an inspiration and education to viewers. Also, while launching new product line, present it as a story to bring coherence to your entire collection.
  2. Fashion brands can take advantage of consumer narcissism and ask their followers to upload photos wearing their brand’s product(s). They can then Regram these photos by giving them due credits

 

C) In view of Societal Factors

  • Brand Conscious and Brand Loyal consumers

About 60% of the Indian millennial consumers look out for brands they can associate with. They feel an emotional connection with these brands and they believe they are defined by the brands they purchase. Indian Millennials crave for brands that boost their social status and make them stand out of the crowd.

Actionable tips for retailers:

  1. Be aware of “loyalty programme fatigue”while designing loyal programmes for your customer base. Shoppers are sick of counting points to get prizes. Instead, millennial shoppers welcome tailored offers or offers on individual basis. For instance, birthday related offers.
  2. To associate social status with a brand, market the product with a story that Align's with consumer’s Ideal Social Self-image (how consumer will like others to see them). This will help a consumer think clearly in terms of what value he/she will achieve after consumption of a particular brand/product.

 

D) In view of Psychological Factors

  • Price is critical

Millennials are more sensitive to price than their previous generations and their purchasing decisions are mostly influenced by the cost of the product. But this dosen’t mean that Milennials aren’t sepnding much, they just try to discern the worth of their purchase. For instance, investing in assets like a car or home will seem comparatively less attractive than investing in an experience such as a nice vacation.

Actionable tips for retailers:

  1. Fashion retailers should use a Trade up/Trade down mentality while preparing look books for their brand. Which means pair high price products with the lower priced ones and create a look for the customers. This comes from a fact that millennials try to balance value and price by investing in a couple of expensive items and then pairing them with cheaper options.
  2. It’s never about affordability but priority. For instance, a leather bag may be overpriced for one person, while other may see it as a necessary accessory. It is important that the unique proposition of the brand/product aligns with the targeted needs of the cosnumers.

 

  • Sustainability is a key concern

Indian consumers appear to be interested in environmentally-focused product messaging. As per the research paper “Can Green Marketing be used as a tool for Sustainable Growth?: A Study Performed on Consumers in India”, (published at University of Wollongong), 75% of survey respondents strongly agreed with the statement “I have developed a liking for environmentally friendly products” and 90% stated that their concern towards environmental protection is high.

Actionable tips for retailers:

  1. Indulge into Green Marketing. It is concerned with postioning your brands as green brands. Marketers should analyze the changing consumer attitudes and prove their social and environmental credentials to show customers they can be trusted with society’s well being.
  2. The price of the eco-friendly products should be competitive to their non-green counterparts.

 

The suggested strategies will help fashion brands to handle the brave new world and stay afloat amidst the changing landscape of fashion retail.