Every 7 Days

The Millenials are full of surprises, according to the findings of a new survey by Concentric Marketing. For starters, Millienials prefer brick-and-mortar shopping for their regular purchases.

They're also very well-versed in nutrition. Despite reports of rising obesity, Millenials are dining at home more often (5 times per week) and when they do eat out, they choose healthier restaurant options.

Other findings include:

  • Millenials prefer to shop at a traditional grocery store.
  • They also prefer stores like Target and Walmart.
  • About half of Millenials don't believe brands should be on social media, yet 96% of Millenials have a Facebook account. 
  • They are selective about who they do follow on social media, with the majority (70%) following three or less brands.
  • They tend to be very loyal to brands their parents introduced them to.

Consumer confidence is at a six-year high, so you'd think spending at discount retailers would be showing a similar rise. Not so. Why?

People are spending more on big-ticket items: homes and cars. Items that, in some sense, represent "stability" according to a recent Reuters article. Low interest rates are also contributing to the increased auto and home sales. And that could very well affect holiday spending in 2013. Industry insiders expect appliance sales to increaes during the holiday season, as well as sales of other home goods and cars. 

So-called discretionary spending has also been affected by high gas prices and the payroll tax. With interest rates low, many people feel now is the time to make the big purchase - before rates rise, and they'll forego other purchases to make that happen.

While that may be good news for stores like Home Depot, what does it mean for retailers like Macy's or Target or Toys R' Us?

Now is the time to review your POS data and look for items that are associated with home and auto purchases. What SKUs do you have on board that can merge with the trend for increased home and auto sales? Those items might make great holiday gifts for new home and auto owners. 

While the housing market and stock market have been on a recent upswing, summer retail sales — particularly back-to-school sales figures — have not been, and are not predicted to be, stellar. Industry experts cite a number of factors, many of which have led to an uneven economic recovery that leaves the majority of American consumers short on spending money.

The payroll tax is cited by the New York Times as one of the most influential factors, leaving consumers with less money to spend per paycheck. And while there have been gains in the job market, they have primarily been in lower-paying and part-time job sectors — thus, while more people may be employed, there may also be more who are underemployed.

For discount and big box retailers this is particularly troubling, especially during the second largest shopping season of the year — back-to-school. Even teens, 35% of whom help purchase school and college supplies, are struggling. This, too, is affecting the summer shopping season.

The above factors have led retailers to lower their earning expectations nearly across the board — from Wal-Mart to Kohl’s and Macy’s. 

As online retailers continue to try and enter the brick-and-mortar space (Amazon already has pick-up sites in the New York market), and brick-and-mortar retailers try to compete with online, consider this — most industry insiders feel retail is headed for a "hybrid" shopping experience, one that is digitized. What current trends can inspire your latest promotions and offer a differentiated experience?

Apple was the first brick-and-mortar store to evolve the shopping experience — to "digitize" it. But they are no longer the only ones. From Audi dealerships and Pep Boy stores, to Staples — retailers are providing an omnichannel shopping experience. Promotional teams, category managers and marketing teams should be asking themselves how they can create an interactive shopping experience.

A recent article in AdWeek compiled a sampling of successful interactive shopping experiences. Staples has placed digital kioskis and interactive displays at the ends of aisles. Macy's has added LED displays and visual arches. And AT&T has developed an in-store experience that is like "walking into a website." 

Even more interesting is this — this digitization could lead to new data for retailers and suppliers. According to the article, several new technologies are being developed that could provide retailers and suppliers with an interesting array of new data. Online retailers already have access to heat-mapping or dwell-time analytics that show them where the eye of the consumer dwells on a web page. This technology may soon be coming to brick-and-mortar stores. A marketing firm is working on software that uses facial recognition techniques to gauge a person's age, gender and mood. What will retailers, in the future, be able to gain from the data? And how will it benefit consumers? Amazon's "you might also like" feature is very popular — perhaps, someday, brick-and-mortar customers will experience the same.

Weather can certainly play a role in sales volume — an adverse event, like a hurricane, can spur pre-storm sales but lead to a loss in sales days after the weather event. What about less abrupt weather trends? Like a cool summer?

The summer of 2013 has been, for the most part, a mild one and it appears to have affected retailer sales volumes. But the cooler weather could now play a different role as we head into the back-to-school season — spurred by the weather, consumers may be more likely to start purchasing fall items. 

How can you prepare for short- and long-term weather events? Look at historical data, particularly around weather events. Examine your POS data to see what insights you gain into pre and post storm shopping behaviors. Did you experience a drought last year? Take note of the shopping trends specific to that event and file those insights away for the next stretch of dry days. Did you have to offer discounted prices and promotions to get consumers back into the stores after a blizzard or hurricane? During a stretch of hotter than usual temperatures, did spending rise as people flocked to the stores to purchase items that helped them battle the heat? You'll be surprised at what you can find if you start tracking weather patterns and relate them to your POS data. You might want to start making a practice of it. 

Be certain to look at inventory levels as well. Did you experience a build up of inventory that was particularly troublesome? What instocks occurred and can you take steps to ensure that those items are on the shelf and in the cart the next time? What items seemed to sail right off the shelves prior to the weather event?  

Also, don’t forget to look at online sales which can be affected by power outages in adverse conditions. If there were power outages, did you see a rise in in-store traffic?

For more insights into promotions, POS and weather read our Insight Series: Weathering Promotions.