Millennials are said to be the “greatest thing” to come along since Baby Boomers; the “consumer market of the future.” They stand 80 million strong and comprise nearly one third of the U.S. adult population. They hold tremendous purchasing power, spending an estimated $600 billion each year. By 2020, Accenture predicts Millennials will spend $1.4 trillion annually, representing 30% of total retail sales.
It’s no wonder, then, that the keynote address of this year’s Leadership Conference was, “Generation Next: Are you ready for Millennials?” delivered by generational expert Curt Steinhorst. The topic was a timely choice given the sizeable impact this generation will have on the furniture industry. Steinhorst encouraged furniture retailers to view this generational evolution not as a challenge, but as an opportunity to understand how to connect with Millennials and capture their business.
Millennials are the largest generation in U.S. history. As many of them approach their prime working and spending years, the impact they will have on the economy is tremendous, especially big-ticket categories such as cars and homes. The older segment of the generation (25- to 34-year-olds) are entering their peak home buying years (25 to 45 years old as defined by Goldman Sachs), and this means furniture buying, too.
As a matter of fact, Millennials are already a top buyer of furniture. They have the largest share of any generation (37%) when it comes to households that purchased furniture and bedding in 2014 as well as the greatest growth in category spend. Millennial spending has increased more than 142% in just two years, reaching $27 billion in 2014, according to Furniture|Today’s 2015 Consumer Buying Trends.
Source: Furniture|Today Consumer Buying Trends Survey, 2013 and 2015
Additionally, Millennials have taken interest in expressing themselves via home décor. In a study by Impact Consulting, more than 40% of Millennials aged 25 to 34 say their home furnishings must be a reflection of their personal style, as compared to only 27% of the overall population.
Retailers and marketers have been forewarned that sales and marketing tactics need to change in order to win this generation. That’s no simple task, but retailers can begin by understanding a few of their foundational traits, how they prefer to communicate, and how they interact with retail.
Why Millennials Are the Way They Are
In order to effectively reach Millennials, you need to understand what’s behind some of my generation’s most notable traits.
- Our “entitlement” is a product of our nurture. Our Baby-Boomer parents wanted us to have it easier than they did. And, they succeeded in creating an easy life for us, supporting many of us through college and even afterwards. As a result, we expect things to be easy, and have limited patience for things that are more complicated than they need to be.
- We’re unique. All of us. We value individualism and seek treatment as unique individuals. Mass marketing and the idea of buying what everyone else is, does not appeal to us. Although, everyone does buy from the brands who treat and speak to us as individuals.
- We’re tech-dependent.There’s a big misconception that Millennials are “tech-savvy.” Yes, we grew up with computers and multi-device all day, every day, but what we really are is tech-dependent. We rely on tech in nearly all aspects of daily life, and more importantly, we expect things to function elegantly and provide great user experiences.
- We admire and crave simplicity.Millennials admire and crave simplicity. Particularly in furniture – an industry that is complex and, to some degree, has found higher margins in this complexity – this can be a real challenge.
Catering to Millennials’ Communication Preferences
Provided a foundational understanding of this generation, Steinhorst shared the dos and don’ts of communicating with Millennial consumers.
Our preferred forms of communication are:
- Text messaging (or chat) – Yes, we’d rather text with a salesperson than meet them face to face. Retailers should consider this in their in store processes, and, of course, provide live chat online.
- Email – With some caveats. Subject line determines whether it’ll be opened and read. Retailers need to be catchy, concise, and to the point in their email messaging. Bulleted content and visual content work best.
- Social Media – Your brand needs to be as accessible as the Facebook app on my smartphone. When Millennials need to reach you, they’ll turn to social media. Retailers need to be there, be present, and engage with us.
But, as Steinhorst was quick to point out, it’s important for retailers to have realistic expectations of social media. It’s not where you’re going to gain business, but it’s where you absolutely will lose business if not present.
And, the forms of communication least preferred by Millennials:
- Face-to-face – It’s the most uncomfortable for us. We grew up in front of screens, and we’re often using multiple devices at once. We haven’t learned face-to-face, eye-to-eye contact, and particularly when considering an unfamiliar purchase, like furniture, it can be daunting.
- Phone Calls – We view it as an invasion of privacy, a means of communication that’s an immediate demand as opposed to text or email which can be queued and multi-tasked. We don’t have the patience to talk on the phone and we certainly don’t listen to voicemails.
In sum, Millennials demand you be online where we can interact with you on our terms. Online is what we know, what’s most comfortable for us, and what we expect. From staying in touch with Grandma, to purchasing our groceries, to banking, to dating – we do it online. A study by the Center of Generational Kinetics found that 40% of Millennials would prefer purely online customer service given the option.
Catering the Store Experience to Millennials
However, furniture is a category where touch and feel matter – even Millennials feel better about buying a sofa they’ve sat in. The trick is to enable a store experience that respects the foundational differences and communication preferences of this high-spending generation.
When face-to-face in stores, certain tactics and approaches towards Millennials resonate much better than others. Here are a few recommendations from Steinhorst which can certainly be applied to furniture retailers:
- Treat millennial customers as unique individuals. The fastest way to lose our business is to make us feel like just another number. The phrase, “That is a unique situation…” is music to our ears.
- Ask questions and find out what makes us unique. Ultimately, the more bespoke your selling process, the more compelling it will be to my generation.
- Millennials like to learn. Train salespeople to lead millennial customers into productive conversations with statements like, “Given your unique situation, here are three things you should be thinking about when buying a mattress.”
- Introduce us to your salesperson peers. Millennials like to see teamwork in action and it builds trust. The more people we meet, the more we trust you and your organization.
- Emphasize your local presence. Whether you have two stores or 200, showcase your commitment to the local community. Millennials love the concept of “local.”
- Communicate with Millennials on their preferred terms (see above). Get comfortable texting and encourage your salespeople to keep in touch with customers via mobile. Millennials do everything on their phones. If we can’t reach you on our terms, we’ll find another retailer who will.
- Make sure your website is clear, intuitive, highly functional and mobile. It should mirror the experience you want your customers to have in your stores. Put your easiest, best foot forward online. This is where I’ll decide whether or not to shop you.
- Don’t ask me to refer other customers. My generation is three times more likely than Baby Boomers to make referrals, but we don’t like to be asked for it. Tweak your messaging to instead ask, “Is there anyone you know who we can help?” We love helping others.
Understand, Modify, and Sell
As Steinhorst reiterated several times during his keynote, when retailers know and understand where Millennials are coming from, they can help them get to where we need to be.
Millennials don’t need to be coddled, but they do want to be understood. If your business fails to understand what makes this generation unique and sell to us on our terms, we Millennials will find (or start) a business that does.