Convenience and personalisation have long been two of the key differentiators for retail brands looking to cut through the market noise and drive long-term customer loyalty. But, with the world facing an uncertain economic future, and environmental concerns front of mind for brands and customers alike, convenience and personalisation are no longer enough to drive long-term customer loyalty, especially among millennial audiences.
These customers are craving retail brands that are ethical and accountable, but can also provide offers, services, and time-savings that meet a specific requirement. The age of shifting cheap and generic stock en-masse is over. We’re entering the era of fast recognition and fulfillment – and brands who adapt to these shifting behaviours and attitudes will secure the long-term loyalty of the millennial customer.
Sustainability and ethics have become business essentials
According to recent Adobe research into shifts in consumer purchases in France, Germany and the UK with PK Global, the millennial customer is the most environmentally-conscious customer. While it’s generally accepted that people of all ages express environmental concerns, millennials take deliberate action, and the brands who recognise this will reap the rewards.
Almost two-thirds (63%) of millennial shoppers have made a deliberate effort to purchase goods that incorporate recyclable or compostable packaging, while 81% of them think retail brands should limit handling and shipping.
For this reason, brands are becoming increasingly transparent about their business practice and supply chains, but it’s a fine line to toe between deference and arrogance. Sustainability and diversity are not box ticking exercises to brag about – they’re fundamental components of a brand’s DNA, and should never be treated as advertising fodder.
This is why ethics, diversity, and inclusivity must be baked into the culture of a company. Both employees and customers catch on quickly if they feel something is forced. This culture must be progressive and natural – and it always comes from the top down with senior leadership.
Retail experiences must remain best-in-class
While many millennial shoppers (69%) have become significantly conscious of the environmental impact of human activities since the COVID-19 pandemic, they still expect personal and meticulously orchestrated shopping experiences, both online and offline.
They want seamless experiences that span their mobile, laptop, tablet, and offline. And they want every channel they browse to reflect this symbiosis, from social to email to SMS, and online stores to offline – fluid integration between every single one of these devices and platforms is a now a fundamental, basic expectation.
This expectation stretches to the types of experiences shoppers have too. They don’t care about general brand emails, they expect contextual messaging and content that is personal and catered to their needs and requirements at that particular moment in time.
And with AI and machine learning at their disposal, brands possess the opportunity to not only offer customers what they want in a particular moment, they can predict what someone needs before they even need it. By examining buyer behaviour, seasonal shifts, and other variables, brands can use AI to deliver the next best offer or action, in real time.
Of course, this has to be balanced with a customer’s privacy and own personal expectations around their use of data, but as technology evolves, retail brands are becoming better at striking the balance between personal, meaningful experiences and overbearing and invasive sales chatter.
Customers beginning to favour ‘brand-direct’ approach
Another trend we’re seeing emerge is shoppers moving away from traditional marketplaces like Amazon, and buying directly from a brand. This ‘brand-direct’ approach is driven by a number of factors, with our research showing that 80% of shoppers would elect a direct purchase if the brand was authentic.
Interestingly, the rise in brand-direct purchase represents a tangible behaviour shift among consumers, who were much more likely to shop via online marketplaces when the pandemic first struck in March/April of this year. Retailers like Amazon were on-hand to meet shopper demand for cheap, fast, and convenient access to essential goods – in fact, according to research we carried out during the start of the pandemic, almost six in 10 (57%) UK consumers preferred to shop via established online marketplaces, with Brits making 11 purchases there, on average, between March and June 2020.
But what we’re seeing now is consumers more likely to support individual businesses and buy directly from the brand, as their need for more specialised products/services and desire for more personal retail experiences increase.
What’s more, it’s an approach favoured by younger audiences, with 70% of millennials more likely to purchase directly from brands, rather than marketplaces.
This quest for more specialised products should give retail brands much food for thought – people are now willing to spend a little more in order to sidestep marketplaces, meaning many customers who supported small and local businesses during the height of lockdown will continue to do so moving forwards.
Bigger brands should adopt the principles that make small and local businesses so attractive to customers – transparency, accountability, and responsibility. When combined with the ability to rapidly recognise what a consumer truly wants and needs, brands will be well on their way to securing long-term loyalty from millennial customers.
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