The generations changing the retail trade
Our in-store experiences also depend on the generational profiles of other customers: here’s why
To what extent are the markets influenced by people’s needs, behaviour and the kind of experience they are after?
With their needs and expectations, people are contributing to transforming the world of distribution and more particularly the retail industry. Today, Customers want a single, fluid purchasing, access and usage experience that blends together both the physical and digital environments.
The transformation of distribution is proving to be a stern test for physical stores which are finding it hard to develop their models to offer dynamic experiences focused on “singularisation”, i.e. which appeal to the modern-day consumer. As well as Big and Small Data, to comprehend Customers consideration is also being given to more human-centred perspectives, such as the ability to understand people on the basis of the generation to which they belong.
But what exactly do we mean when we talk about “generations”?
By generation we don’t just mean a category of people born during a specific period of time but a group that also defines itself on the basis of how it sees the future and the ideals it shares.
Generations have always existed but it is only now that we are able to understand their complexities and the speed of change has made the large cultural “gaps” between them even more evident than before.
At Logotel we have addressed this issue in our editorial project Weconomy, which dedicated journal no. 11 to the sharing of places, time and spaces - especially in the company - by different generations. This issue remains topical in our projects: generation is another filter for improving our understanding of internal and external Customers and planning the right forms of interaction and possible services with an appropriate mindset. Over 4 different generations coexist within the company, sitting at the same desk and interacting in work groups or on planning and organisational activities. Today’s stores are visited by over 5 different generations and sales staff find themselves having to deal with customers that have completely different needs and values. It is also common to see young people in more senior roles, managing, leading and imparting orders to colleagues that are older than them.
For example, 1 of 4 people in the world is a Millennial (24% or around 1.8 billion people) and 16% (1.2 billion) belong to Generation Z (10-19 year-olds, born between 1998 and 2007). These new generations have their own values and act differently in the market compared with previous generations. For everyone they represent the “always on” generation but in reality when they go into physical stores they expect incredibly engaging and human “non-digital” experiences. If not, what value does an in-store experience have if I can use a smartphone wherever and whenever I want?
Let’s take the recent opening of the Apple Store in Milan as an example. Rather than a simple Apple store it is in actual fact a genuinely interactive space that dialogues with the city, promising an open air experience and altering the landscape with a giant show-stopping waterfall that dominates the square. As well as employing a wide range of people of different generations, the store also strives to engage all generations with various initiatives.
Last year e-commerce colossus Amazon officially entered the physical store business by acquiring another giant, Whole Foods, a network of organic supermarkets consisting of hundreds of outlets in the US, Canada and the UK. Although there will be many reasons behind this operation, it is fair to assume that generations like the Millennials also had some degree of influence on the decision. On one hand, by acquiring the organic supermarket chain Amazon also represents some of the typical values of Millennials who prioritise factors like authenticity, quality and wellbeing - as embodied by brands like Whole Foods - when shopping. In addition, Amazon’s experience in the digital arena enables it to make up for the technology deficit which had prevented Whole Foods from reaching younger targets in a satisfactory way. In short, the Millennial’s dream combination of high quality products from the physical world and sophisticated delivery technology has become reality.
So, considering the influence that the generations have on the retail world in general, how would a Millennial Department Manager interact with Generation X or even Generation Z colleagues that report to them? What would a young sales assistant, trained to manage the value-added service relationship with customers, have to take into account when dealing with a young 35 or 45 year-old?
Every generation has its own innate set of values and many of these are incomprehensible to other generations, leading to well-worn clichés that foment conflict and deep misunderstandings and weaken the authority of parents but also bank employees, store managers and teachers.
At Logotel we believe it is important to focus on the different generations in the retail trade in order to understand the kinds of Customers that store managers and sales assistants have to deal with every day, and to offer Customers an experience that is personalised, that creates a synergy with the Brand and that enhances the quality of human relationships.
So what actions must be taken to ensure that this happens in a project?
Different Customers and the generations they belong to must be observed and understood in a “non-virtual” way, the right level of motivation must be provided in order to engage them, forms of personal interaction must be defined, the type of language and communication used must be defined and adopted across the board, the Customer’s time and space must be managed in different ways, forms of collaboration must be established for every contact point. In short, understanding the generations and the best forms of collaboration becomes a great opportunity to provide a unique future experience that takes account of the complexities of the individual. Instilling and training this sensibility in people that plan, drive and work in sales networks and distribution is becoming urgent.