How is the iGeneration going to shop in 5 years from now:
We are talking about 2014.
In 5 years, the generation entering the consumer segment is the iGeneration. Their main features as consumers:
- Hard shoppers. Their level of expectation is very high and economic hardship makes them think twice before buying.
- peer group is not constrained to geographical/cultural boundaries
- don't like going to the store. Prefers the store that comes to them.
- value of Intellectual Property is being questioned, iGeneration prefers to produce their unique ideas and share it instead of being just passive consumers of ideas.
- store environment has to be intelligent and adaptive, reacting to the consumer based on clues given by himself and by his social context (facebook, second life, myspace, twitter)
- Level of expectation is very high because they've been exposed since early age to sophisticated gadgets and enormous variety of products at very low price.
How can we attract and retain them?
- intelligent store. Reacts instantly to consumer needs and is adaptive. Instant feedback.
- Virtualization helps breaking physical limitations of the store
- every point of contact with the consumer has to keep track of consumer actions to build knowledge of consumer's ecosystem.
- provide new points of contact with consumers: phones, games, social networks, internet appliances, even competitor's sites
- massive data collection and analysis, including biometrics.
- commitment with consumer experience.
- partnership with consumer. Store needs a personal identity and this identity has to be credible enough for the consumer to invite it to his social environment
- store has to provide tools for the consumer to share his experience with others.
We are talking about the late members of the "echo generation" or the millennials and the beginning of a new generation, made of kids that were born and grew on a highly connected society, where the pillars of our economy are being deeply questioned and the value of intellectual property is dropping dramatically.
Certain basic patterns of behavior will still exist. Young people will still shop as they 've always done: they want to buy whatever is popular among their peers and they want to make sure that they made the best choice. The difference is that now their circle of friends is not constrained by geographical/cultural boundaries and they are used to be exposed to very complex technology and concepts that are served to them in a simple, easy to learn interface, obfuscating the complexity involved and affecting their perception of cost.
They got used to computers and programs doing the number crunching, all the repetitive and boring work for them and they want their shopping experience to be as easy as everything else that is being simplified by heavy use of gadgetry.
It's easy to drive in an unknown place using a GPS navigation system that today is easily available on your cell phone. Most users of this technology are not aware of all the intricacies of complex technologies involved to make it possible, all the network of satellites, radio signals, antennas, repeaters, switches, cloud computing, sophisticated geo referenced databases, pattern recognition, adaptive software, image processing, etc. Still the can be very critical if the user experience is not perfect. While the previous generations would put up with flaws and sub par user experience because they were in awe with all the "magic" of the technology playing together ("wow, I'm having a video chat with someone that is in Japan, and it's live! Even if the connection wasn't too good and the sound was out of synch and the image would freeze from time to time), this generation that grew up in a very complex world is always expecting more and more to come. They are growing accustomed to revolutionary changes happening at light speed and they won't settle for less. They switch service providers at the first flaw, they trust no one besides their own feelings.
This has a profound impact on their shopping experience. Buying something from someone, be it goods or services is basically a result os a trust relationship. The shopping decision happens when the shopper is sure that the needed or desired good is found and that is the best deal I can get. The concept of "best" is heavily influenced by intuition and perception of rational than pure reasoning.
Checklist/price battle won't lure the consumer anymore. They grew expecting that everything has to work flawless. Digital clock mechanisms of today are more precise and perform much better than the majority of their mechanical ancestors. The fact that a watch can keep the time accurately is not a deciding factor in a buying choice. In this scenario, all sorts of "intangible" values become more and more important for the consumer.
Globalization produce a system where there is no much difference in what goods are available in store A and store B and there is not even much difference in price.
In contrast with all that, this generation is being overwhelmed by their own high expectations. They are going to grow tired of the highly competitive environment fostered by the Millennials. They are realizing that we can't be that thin, we can't work out that much, we can't be perfect students, perfect athletes, perfect white teeth, perfect job, perfect car, perfect gadgets. This will inhibit their will to buy, to avoid the frustration of not being able to meet such high expectations.
What counts more than that is the shopping experience. What counts now is what my buddies are buying, is what message I will be able to transmit to my peer group. As it has always been the case, but with the difference that now my peer group is something fluid, that is not constrained to a geographical area, demographic or culture.
When iGeneration goes shopping, they don't want to see features and prices side by side to make the choice. They want to let the computer to do that comparison and tell them: "buy this one and you will be happy". They want the vendor to prove to them that they will be happy with their buying decision. They want to try before they buy, they want effortless decision process, they want to be assured that, if they regret their decision, this can be mended, they want to have a a second chance, a second life, if things go wrong. The same way they do at their video games.
The fluidity of the social groups that were shaped on the WEB 2.0 fabric gives to the vendors a wealth of opportunities. There is so much information being shared and publicly available that it has never been so easy to learn about the context of each consumer. The consumer will be glad to share information in exchange for a simplification of their shopping experience. I don't want to get to a store and find out where things are by looking at signs and guidelines. I want to tell the store what I need and the store will have it for them when they need it. I want the store to tell me what I'm missing, based on my Augmented Social Knowledge. My social context will allow the store to realize what I'm looking for when I give some clues. It will allow for instant behavior recognition and taylor made market, breaking the barriers of the market segmentation.
How can we reach them:
With an intelligent store, that "speaks" on a personal level with the consumer. Every detail, from the layout to sms/mms messages, to how we greet the costumers has to be thought carefully in the context of the user experience.
The physical barriers have to be surpassed by virtualization. Displays have to reconfigure themselves depending on what the user needs. Before the user physically navigates around the store, she can virtually roam around on a map on her cell phone and plan ahead what she is going to do. If I see a piece of clothing that I like, I can virtually try it on a digital screen to see if it is worth the trouble of getting undressed in a fitting room. Or if I'm on a fitting room and I need one size smaller/bigger or I'm wondering if it comes in other colors, I can touch the screen, see my options and request my choices to be brought to me.
The consumer can sense the smell of the different fragrances by approaching the shelf where the perfume is. Everything that I can think of will be there. The consumer has to leave the store with the feeling that they thought of everything.
The retailer has to keep track of every consumer interaction with any point of contact. Retailer has to provide several points of contact: around the store, on the internet, via phones, games, gadgets, social events. And the store has to provide the means for the consumer to publish her experience to others. In the digital fitting room, I can see how the slimming dress looks like and I can send an mms to my mother's cell phone so she can see how good I look in it. She will call me back and reassure me that I'm buying the right dress. The buyer found a good deal on a store and he instantly tweets about it and all his followers will be instantly alerted by it. But if the buyer forgets to tweet about a good offer, the store can facilitate this interaction by giving him the opportunity to do so at one of the points of contact. The consumer is most likely to make a buying decision if he is able to get reassurance from his peers that this is the right choice. The retailer that is confident about his offers, will facilitate this interaction.
The consumer wants to share his ideas with the merchant and with other consumers and he wants to get an instant feedback on what he said. So the retailer needs to be able to capture consumer's ideas on any type of outlet that they use, from written forms to twitter.
The store has to be a living being. It needs a personality and it has to be likable enough that the consumer will invite it to be part of his life. Like any living being, it will change with seasons, with times, and with the consumers. It will be the personality that each consumer wants to attribute to it and that better fits their needs.