Forget Millennials: This Is How You Should be Targeting Consumers
Are you sick of hearing about Millennials and Gen Z and their tech addictions and their newfangled preferences and habits disrupting everything we know and hold dear?
Yeah, us too. And as it turns out, we've been thinking about this all wrong.
That's essentially how Lee Peterson, executive president of brand, strategy and design for WD Partners, described it to a packed room of retail executives at NRF's Big Show in January.
Age still is the number-one disparity in how retailers and brand marketers talk to consumers but the reality is, in some senses, much simpler. It all boils down not to splitting consumers along generational lines but dividing them up as a population, as those who hold a particular mindset. And the dividing line is this: are you a digital immigrant or a digital native?
Speaking broadly, digital natives — 30 years old and younger, mostly — arrived on this earth during or after the widespread adoption of technology, so life without computers, laptops, smartphones and other mobile Internet-connected devices is virtually unknown. In fact, 1995 was "the year that changed it all," according to Peterson, bringing us Amazon first, followed by eBay, and then Fast Company sprang up to cover these curious new innovators. Craiglist, Match.com and the Netscape IPO came next, and "Toy Story" — the first all-digital movie — landed in movie theatres. That year marked a major turning point: 50 percent of Americans had a personal computer in their home.
It was in that particular milieu that digital natives emerged. It's no wonder they're endowed with a keen understanding of digital thinking, whereas the digital immigrant — consumers, mostly 45 years old and up, who adopted technology later in life — lacks the ability to think quickly along digital lines. (While 31- to 44-year-olds weren't included in the breakdown, where they fit really depends on their tech mentality.)
"A lot of our companies are run by digital immigrants," Peterson noted, almost as a warning. Which may help to explain why many apparel retailers are floundering and failing to resonate with shoppers these days.
Consider just how quickly the world is changing. It's entirely possible, even likely, that people born in 2025 will never have heard of cash, taxi cabs, landlines, banks and checks, car insurance — thanks to autonomous vehicles — offices, catalogues, even traffic lights. Some European towns are experimenting with going stop-light free.
By contrast, people interviewed in Davos last year shared what they believe will be commonplace by 2025: implantable mobile devices, Web-connected clothing, business meetings powered by augmented reality, artificial intelligence having a seat on your board of directors.
Toto, we're not in Kansas anymore.
A WD Partners survey of digital immigrants and natives highlights how differently these populations behave and the kinds of tech-enabled shopping experiences they want. Fifteen percent of immigrants and 51 percent of natives use a mobile device to make a purchase, no surprises there. Mobile shopping is projected to make up 45 percent of e-commerce traffic in this United States this year. Three quarters of Amazon's traffic already comes through mobile.
What do natives want retailers to offer? Mall-based order pick-up (59 percent), mobile self checkout (57 percent), RFID-enabled checkout (58 percent), BOPIS drive-through service (65 percent). Far smaller percentages of digital immigrants are interested in these options.
Digital natives — with around $200 billion in spending power — take a "why not?" versus a "why?" approach to experimenting with new technology. They expect a level of service that most of us aren't accustomed to, Peterson notes, driven largely by the rise of the on-demand economy, whose services 49 percent of natives use. Having less-than-stellar in-store associates is "unheard of" for them, he adds.
They don't want to stand in line, wander around, deal with salespeople, talk to anybody. Their demand for new and better ways of interacting with retail certainly is a factor in the emergence of new concepts such as Amazon Go, Eatsa in San Francisco (healthy fast food brought to you by robots), NIKE's experience-driven new flagship stores (try out your sneaks on a proper basketball court), and Barnes & Noble adding restaurants to physical locations (read your new book over a quick and delicious meal).
Unwilling to wait around very long for progress (or anything, for that matter), digital natives and their "change it now" fail-fast mentality are influencing, even accelerating, how businesses try new and novel ideas.
"If you have everything under control, you're probably not going fast enough," concludes Peterson.
Jessica Binns is senior editor for Apparel magazine. She can be reached at [email protected].