If there is one thing millennial shoppers seem to have in common, it’s that retailers are trying to deal with them as a whole, and they still seem boggled about how exactly to do it.
That was my takeaway from a retail conference I stopped by this week in uptown Charlotte. Every other question about current retail challenges – like understanding shoppers’ grocery habits, for example – seemed to circle back to one issue: how to attract millennials.
Take Brian Roth, vice president of marketing at Pappas Properties, for example. He noted how 20- and 30-somethings in Charlotte spend a lot of their time at “third places” like breweries and cafes. Retailers should follow them, he suggested.
“They’re beginning to cluster, and to me that creates a great opportunity. You know, what retail lies next to that? That consumer doesn’t shop like my generation did,” Roth said at the meeting of the International Council of Shopping Centers.
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Some retail leaders are starting to do that in Charlotte. Edens, for example, just said it’s adding a Free People boutique near the Anthropologie in South End, a neighborhood dotted with breweries, new apartment buildings and restaurants.
None of the seasoned retail executives and local developers I heard during my three hours at the Charlotte Convention Center were millennials. They talk about my generation, those roughly between the ages of 18-34, as almost a different species of mammal entirely.
“We’re still operating under, what do millennials want and what do they do?” said Frank Mowitz, director of real estate at Matthews-based Harris Teeter. “Retailers who figure out millennials are going to be very successful.”
And they’re right to be concerned. Millennials right now are the largest generation in America, outnumbering baby boomers. They represent about $200 billion in annual buying power, according to Forbes, but they’re not brand loyal, they’re informed shoppers who love a bargain, and they often prefer to spend on experiences rather than on stuff.
A retailer’s worst nightmare, some might say.
Mowitz outlined “two levels” of millennials – those who are single, “out having a great time and enjoying life,” and those who become parents and start changing their shopping habits.
To be sure, other “levels” of millennial shoppers exist: students with different budgets than young working professionals, for example, or single working parents.
Chris Grenier, a senior vice president of development for North Carolina at Florida-based real estate firm Stiles, summed up his advice to retailers simply: They just have to be nimble when dealing with millennials.
“Whether they’re married or single, I think that just speaks to the need to be flexible and adaptable without having to remodel the store every time,” Grenier said.
Young shoppers’ preference for experiences over material goods is reflected in how grocery stores are catering to them, experts said. After all, spending at restaurants overtook grocery store spending last year for the first time.
Grocers are therefore starting to invest in making stores “a little more fun,” said Harris Teeter’s Mowitz. Case in point: the new Harris Teeter in Pinehurst, which just opened and boasts a wine bar, beer growlers, a juice bar and a walk-in humidor.
“As grocery stores evolve, I think you’re going to see more restaurant dollars flow back to the grocery store. People are really zeroing in on fresh, whole and organic,” he said.
Discussing grocery shopping trends specifically, Bill Moseley, owner of Moseley Real Estate Advisors, also said he’s noticed millennials seem to be more health-conscious, which prompts them to make more frequent grocery store visits to shop for meals they make.
For grocers, this means “shifting dollars away from the middle of the store,” where most boxed and canned food is, Mowitz said, and more into the freshly prepared offerings.