Lessons from #NRF2019: How top retailers are cracking the Millennial code through purpose and convenience

The future of Online Retail is in Customer Engagement and other lessons I learned from NRF2019

I just came back from my first time at the biggest retail tradeshow in the world.

NRF brought together close to 40,000 retailers from all over the world, plenty of exhibitors, and too many speakers and Big Ideas sessions to count.

Team TokyWoky was featured on the Microsoft Partner Booth as you might have read here. We met marketers and executives from world-leading brands and found out all about how they’re planning to build trust and customer loyalty online.

Now that I’m fully recovered from jetlag and that post NRF haziness, I thought I’d recap the top insights I saw.

This turned out to be a little longer than I first thought, so check back again later this week, for parts 2 and 3!

Part 1 — Cracking the millennial code through purpose and convenience

It will not shock you when I say traditional retailers have been struggling to understand how and where millennials want to shop.

This was never clearer to me than when I saw the huge crowds that Big Ideas sessions like “understanding the millennial demographic” drew. Imagine then the sense of dread that filled the room when someone had the audacity to mention Gen Z.

A brand’s ability to attract and retain millennials will obviously be key in their survival for the foreseeable future. Here are my favourite takeaways from NRF2019 on the topic:

Attracting Millennials 101: purpose first

Leading retailers like Target and Kroger are staying relevant and making millennial shoppers choose them instead of Amazon by going all in on purpose.

What was something almost all talks at NRF had in common this year, from the CEOs of Levi’s, Kroger, and Target to digital native brands? That’s right, purpose in retail.

Just a buzzword? Didn’t seem like it from my perspective.

I particularly liked Jason Wachob’s talk about this. The CEO of Mind Body Green said that although we used to live in a world where companies earned shoppers’ trust with the purchase, that isn’t the case anymore. Today, companies need to earn a customer’s trust before they will even consider buying from them.

This is especially true with Millennial customers, who have become more socially and environmentally conscious than their parents. Brands that fail to be genuine and honest, brands that do not contribute to social and environmental causes, or brands without a clear purpose, will not make it on the Millennial market. The fear of being #cancelled is real… and legitimate.

This is a huge opportunity for brands.

Jason Wachob says that “once educated about a brand’s sustainability initiatives, the customer connection with the brand increases, creates loyalty, customer advocacy and sales”.

A company’s purpose will help it connect with its stakeholders: customers will feel emboldened shopping at a company that shares their values and employees will feel motivated and proud to go to work.

In the end, this is what it often came down to for many retailers or industry observers: Millennials shop at Amazon because it’s convenient, not because they adhere to the brand’s core values. Come to think of it, what are Amazon’s core values? I couldn’t think of any. Can you?

So lesson one from NRF2019 is to connect with your audience by showing them you have purpose and care about what your customers care about.

Convenience over digital: long live in-store retail!

Millennials aren’t shunning stores and zeroing in on online shopping like we thought. They’re not looking for digital, they’re looking for convenience, on and offline.

If you’re like me, you’ve been hearing for years that millennials are avoiding to buy in stores at all cost, preferring to shop online. Turns out, that’s not true.

Belgian food retailer Ahold Delhaize and Toshiba researched the changing shopping habits of the modern shopper for their talk on “Beyond millennials: How to attract and retain today’s consumer.” They found that most millennials (57 to 59%), surprisingly, still prefer the store to online shopping.

Sure, having an online presence even when you’re a traditional retailer is a given now. With online global retail sales growing at an average rate of 20% every year, “it’s no longer acceptable to have a non-digital experience”, says the CTO of Walmart Jeremy King.

But all demographics, including millennials, still prefer the brick-and-mortar store to its virtual counterpart.

If Millennials prefer to shop in store, they do expect to complement that experience online, preferably through social. Toshiba research show they want to research the products they might buy and the companies they might buy from, mainly through reviews and third-party advice.

This was further corroborated by research from Coresight Research, a RetailTech advisory board. 40% of online orders and growing are being picked up in store because retailers are making it increasingly convenient to do so. Their research also showed that positive online experiences drive instore revenue growth.

Retailers need to invest in their online experience if they want to drive growth, both online and offline.

This isn’t unique to Millennials. Shoppers from all generations are now expecting to be able to shop both in store as well as online. But these channels shouldn’t be treated as two separate channels or even an omni-channel approach.

After all, your customer doesn’t. They’re just trying to solve a problem.

US food retailer Kroger CEO Rodney McMullen probably said it best:

“Retail won’t be physical or digital, it will be “I have this problem, what the easiest way to solve it?” Omni-channel just means convenience to a customer.”

The in-store shopping experience therefore needs to be digitally enhanced to deliver on generational customer experience expectations.

Key recommendations were:

- offer in store pick up in under a few hours

- offer the same expertise you offer in store on your e-shop

- make sure you have plenty of social proof online (reviews, photos of other customers in your clothes if you’re a retail brand, social interaction with the brand…)

- solve your customer’s problem anywhere they can find your brand (meaning on social media too and on your e-shop)

Lesson two from NRF is that we can finally stop pitting in-store against e-shops, it’s never been about that. It’s about convenient experiences.

I saw at NRF that both traditional and digital brands are playing catch up with the modern shopper. They’re now beginning to understand how the retail industry has fundamentally changed and how shoppers want to shop today.

This isn’t just a Millennial problem. People from all demographics have fundamentally changed the way they shop in the past decade.

With digital disruptors like Glossier or Fashion Nova coming into an overcrowded market and quickly conquering market share by rethinking retail, it’s time for traditional retailers to catch up before it’s too late.

Read about how leading retailers plan on doing this through personalisation in part 2 of my NRF recap, coming later this week.

I originally posted this on LinkedIn, let’s connect there!