The Retail Challenge, Selling to Generation Y

Update:

This is the second in our series of articles on selling to different generations.

A retailer recently responded to our first article saying that independent stores just had to provide customer service, as the box stores didn't and all would be well in the retail world. That each generation required customer service in the same way and our future would be bright.

I love the sentiment, but don't agree with such a bland approach to retailing. One of the real challenges for many retailers is to sell to Generation Y, the Teenagers, especially as many of us are well passed those years and find teenagers the most difficult group to understand.

This generation claims to be different to the previous groups of the past, this is true, but it is true of every group of teenagers. They key is how do you retail to this group of teenagers?

Firstly, why bother. Research by Teenage Research Unlimited in Northbrock, Illinois, USA shows that they make up 11% of the population and are the largest segment of the population. This means that retailers should be aiming to get their loyalty now and aim to build on it in the future.

Plus, in the USA, according to research carried out by Kent-Dychtwald Inc. of California, the majority of these kids get over US$50 per week pocket money. This leads to a lot of impulse spending opportunities.

Whilst the generation before this group of teenagers were a doom and gloom generation, this group of teenagers are generally optimistic and want to be involved in the community.

This generation have been over-exposed to the traditional advertising aimed at their parents and as a result they are market savvy and don't even take note of traditional market messages. At the same time the mobile phone and computer area standard pieces of equipment to get them through life.

To get this generation's attention you need to rely on SMS messaging and promotions via the computer. Plus, this group will purchase products from their computer. Retailers aiming at this generation need to be computer literate when it comes to marketing.

I recently went to a restaurant in Perth, Western Australia aimed at this generation. The menu was on SMS for this generation to order their meal, prior to entering the restaurant.

In Holland and New Zealand some new shopping malls are clustering retailers together based on generational marketing. This saves shoppers having to travel from one end of the mall to another to get to their favourite shops.

The Mall of Georgia in the USA has introduced Generation Y theme days and theme events. These include an educational centre and IMAX theatre. Plus, cyber cafes in the shopping centre are key elements of the retail mix if you are to attract this generation.

Boredom Comes Easily

To this generation boredom comes easily. This is something we have found in our own business when employing young people. Give them a task for half a day and they get bored; give them a number of tasks where they can swap around jobs and their productivity goes up.

The same applies when they go shopping, boredom comes quickly. They would much prefer to pre-shop and then go in, purchase the product and leave.

Macerich Co. in California introduced a pre-shopping game "Know before you go" aimed at this generation.

This was linked to shops in a shopping mall and allowed consumers to surf the net prior to going to the shop. One shop registered that 80% of its consumers had used the pre-shopping game prior to purchasing product.

Sponsor Extreme Sports

Retailers aiming at this generation have found that extreme sports sponsorship is one way to get your name across to the target consumer.

The skateboard park may be an ideal opportunity to get your name across.

Teenagers are getting more money to spend, but like every other group their spending patterns are changing.

Most of the research on this group comes out of the USA from Teenage Research Unlimited, but it has a message for all retailers across the globe.

In 1997 72% of teenagers went to a mall within the last 30 days. This, in 1999, had dropped to 69% and I expect it has continued to decline. The feeling of many of this generation is that shopping malls are not generally targeting them as a consumer.

In 1997 68% of them visited a discount store, but that had climbed to 78% in 1999. I only need to look at my own Generation Y daughter and our local discount store is one of her favourite shopping locations. What Can you do as a Retailer to Attract Generation Y?

1. Provide makeup classes for teenage girls if you are in the cosmetics industry. This proved to be highly successful when Nordstrom did it in the USA.

2. Have a look alike 'pop star' competition. Pete Luckett, the Canadian food retailer, introduced this when the Spice Girls were at their peak and was inundated with competitors . 3. Make sure you have internet access within your retail location. Cyberspace retail facilities will really attract Generation Y.

4. Provide interactive 'how to' classes in store. This group will not sit and listen; they want to get involved with the activities on offer.

5. Get involved with 'cool' community events. This age group do get involved with community events they can relate to and this is an opportunity to build a relationship with this market.

6. Create a teenager niche. Don't mix products related to this age group with other age groups. Create a teenage zone and make it 'funky'. If baby boomers feel comfortable in the zone, you have got it wrong.

7. Employ Generation Y sales members to sell to Generation Y consumers.

Ref. In writing this article I have referred to "The In Crowd : Retail Rushes to Keep Pace with Generation Y" by Lauren Keating from Retail Traffic magazine 1 May 2000.


About the author: 20 years experience in 15 countries. He regularly contributes to retail magazines around the world and has authored several successful marketing and retail books including the best seller Just About Everything a Retail Manager Needs to Know. www.johnstanley.cc

Author: John Stanley
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