1513 words|5.8 min read|

Recently I heard a millennial describe how he bought his first ever clothes washing machine, about 10 years ago. The process went like this:

  1. Drive to nearest home appliance store, park up, walk in
  2. Spend some time browsing selection available
  3. On being approached by salesperson, explain requirements, get presented with a shortlist of options, pick the one that was recommended
  4. Pay and load appliance into car
  5. Take home and install appliance

So, in a graphical format, this fairly commonplace buying decision (which still takes place hundreds of times a minute all around the world, by the way!) looked like this:

1

IDENTIFY NEED “I want a washing machine”

2

TRAVEL TO SUPPLIER Decision based on location and convenience

3

MAKE SELECTION Based on vendor recommendation

← SUPPLIER GETS INVOLVED AT THIS STAGE

Now, here’s where it gets interesting. Our millennial friend then went on to explain that the washing machine recently needed to be replaced, and explained how differently he went about the buying process this time:

1

IDENTIFY NEED “I want a washing machine”

2

GO ONLINE Starting with a Google search: “How to find the best washing machine for my needs”

3

SELECT MACHINE TYPE Based on information found online

4

SELECT BRAND AND MODEL Based on user reviews, independent test results, and social media recommendations

5

SELECT SUPPLIER Based on price, speed of delivery, brand recognition/trust, and service options

6

ORDER AND RECEIVE DELIVERY …All without leaving home!

← SUPPLIER GETS INVOLVED AT THIS STAGE

It’s not difficult to see that this process will have massive implications for any retailer as millions of millennials (now there’s a mouthful of an expression!) move into the home ownership/family raising stage of their life. It’s a trend that will only continue as digital natives are of course even less likely to use a traditional approach to buying than their older counterparts.

Confused by all these terms?! Here’s a handy “generation chart” to help refresh your memory:

BABY BOOMERS Anyone born between 1945 and 1965
GENERATION X Anyone born between 1965 and 1984
GENERATION Y – MILLENNIALS Anyone born between 1984 and 2004
DIGITAL NATIVES Anyone born between 2004 and the current day

So, what does this mean for retailers facing a future of growing and intense competition?

Well, like all changes, you can either resist it, wishing it would go away, or embrace it and move forward, recognizing that with great challenges come great opportunities. No prizes for guessing which route we recommend is best for your business!

It’s not just millennials that are doing more research online before they purchase. Generation X-ers and even Baby Boomers (the so-called “Silver Surfer” generation) are doing it increasing numbers, too. The increasing use of tablets and smartphones and the gifting of the same devices means online e-commerce transactions are set to continue their inexorable rise. Even the Queen of England (90 years young) uses an iPad now! Like many of her generation, she was given it by her grandkids and is said to enjoy browsing the web using it.

First, let’s deal with the threats that this method of buying might pose, and some ways you can tackle each threat head-on:

PROBLEM: YOU MARKET SUPPLIER-BRANDED PRODUCTS AND ARE LOSING BUSINESS DUE TO LOWER PRICES BEING AVAILABLE ELSEWHERE

This is something we are hearing more and more. If you are marketing products that are branded by your supplier (in other words, the brand is not unique to you) then you’re potentially in a race to the bottom. When price is the only differentiator, there will always be someone prepared to undercut you.

POTENTIAL SOLUTIONS:

  • Create your own company sub-brands (or ask your supplier to apply your brand to their products) to make it more difficult for people to price-match like-for-like against products of competing companies.
  • Offer something that no other retailer does – for example, an extended warranty, a free gift with every order, free insured/express shipping, free setup, extended after-sales support….
  • Do a better job of marketing your product than anyone else – for example, telling great stories, offering rebates and loyalty schemes, access to special discounts on other ranges, or other in