Better Living Through Big Data

Shopping Experience Changing as Millennials Hit the Market

Ken Kaplan Executive Editor, iQ by Intel
retail mall

Online browsing may be the new window shopping, but in-store experiences have become product petting zoos that scintillate the senses of plugged-in shoppers.

This year, Black Friday and Cyber Monday broke beyond U.S. borders into places like the United Kingdom, France and China. As this end-of-the-year shopping frenzy goes global, it’s evident that more retailers are turning to tech to entice and engage smarter, more demanding consumers.

The National Retail Federation (NRF) estimated that 134 million people in the United States shopped during the Black Friday weekend, but weekend retail sales — both in-store and online — were down 5.2 percent from last year.

While Cyber Monday showed that online sales rose 8.5 percent in the United States compared with last year, it was slower year-over-year growth from the previous year, which showed growth of 20.6 percent, according to a report by International Business Machines Corp.

Still, NRF expects more than 1.3 billion people will shop this holiday season, spending a record-breaking $620 billion, a 41 percent bump from last year.

But there are riptide shifts in shopping trends caused by millennials aged 18-34 who shop by merging real and digital world experiences. Their attitudes and approaches to shopping are forcing retailers to go nonlinear, according to Joe Jensen, general manager of Intel’s Retail Solutions Division.

“Twenty years ago it was a very linear journey, where shoppers became aware of things through a national ad campaign, then they’d go to the store, maybe try samples, buy one and then become a loyal customer,” said Jensen.

“Now it’s a scattered journey. Not only that, it’s completely different for different people. Today most times people collect feedback from friends, family or online along multiple touch points on their path to making a purchase.”

shopping kiosk

Not only has the path to purchase changed, it appears more people are choosing shopping over sleep. According to Google, one third of all shopping searches in the United States happen between 10 p.m. and 4 a.m.

Millennials already account for half of the world’s population. The 2014 Cassandra Report: Consumed foresees this generation spending $2.5 trillion dollars on goods and services in the year 2020.

They tend to be cost conscious and brand loyal, but more than owning things they prefer access and experiences, according to Jamie Gutfreund, CMO of Deep Focus and lead researcher on the Cassandra Report.

To meet the digital and experiential demands of shoppers this holiday, retailers are turning to technology to bolster and intermix their online and in-store offerings.

“Synchronicity is important,” Gutfreud said.

“Seeing shopping as real world and digital world is old. People want to experience brand as a whole wherever they are. They want online inventory to match instore. They want the branding to match.”

Nordstrom’s in-store Pop-In Shop Gift & Go invites shoppers to check out “gifts as unique as the loved ones on your list.” Curated by the store’s director of creative projects, Olivia Kim, formerly of Opening Ceremony, these real life showcases are augmented with an online game to inspire shoppers.

Nordstrom graphic

Nordstrom also gets kudos from digital natives for marking items in their store that receive the most pins from the retailer’s Pinterest site.

One of Nordstrom’s best examples for fusing the online and real world experience is the touchscreen mirror in dressing rooms that tracks items brought into the room and can recommend other items available in the store.

Developed with help from eBay, the first “connected fitting rooms” debuted at Westfield’s Southcenter Mall in Seattle and Westfield’s Valley Fair in San Jose in time for the holidays.

These kinds of technologies are allowing retailers to use more data to provide better all-around shopping experiences, according to Jensen.

“It’s helping them get the right inventory online and in stores,” he said.

“Today about half the time shoppers find the right color or size they’re looking for on the store shelf. Young shoppers think anything’s possible, so they wonder why a retail store wouldn’t have exactly what they’re looking for.”

American Apparel found a way to get their online and in-store inventory right.

“Their RFID tagging system allows them to bump that up to 99.8% of the time,” said Jensen.

“And keep in mind that 60% of the time people are buying something that is not necessary [a.k.a. impulse buying].”

In addition to using technology for real-time inventory and to provide more personal in-store services, some stores are starting to use technologies that catch the eye, ears, nose and stomachs of store visitors.

“If you step inside an Urban Outfitters, there’s a lot going on. There’s shopping, a café and visitors can do other things inside,” said Gutfreund.

Costa Coffee is the number two coffee seller in the world. Working with Intel, they created a high-definition digital touchscreen coffee vending machine that brings the spoon and cup clinking sounds of a barista and fresh-coffee aroma to almost any venue.

“It’s like getting a real coffeehouse experience inside a store where you might be shopping,” said Jose Avalos, director of digital signage for Intel.

Avalos also mentioned McCormick’s, a 125-year-old food company based in Baltimore. It has a digital sign that lets shoppers play Guess That Spice, a game that tests the sense of smell.

Clever, sensational tactics and technologies might lure hard-to-please shoppers, but most know a bargain when they see one thanks to their online searches or smartphone notifications sent by Internet services or in-store beacons.

“Beacons are these low-power Bluetooth transmitters placed in stores that wake up mobile apps to inform shoppers on the spot,” said Jensen.

Macy’s, the 156-year-old clothing and accessories chain, is using beacons in its stores across the United States. The chain plans to send coupons, product videos and information to shopper’s phones.

“[Customers] are at the center of all our decisions, and our ongoing research and development will continue to help us understand how to personally engage with them,” said Macy’s CEO Terry J. Lundgren, in a statement published by ZDNet.

Along London’s 200-year-old Regent Street, some 130 stores are using sensors and wireless technology to send messages to shopper’s phones. The New York Times reports that part of a $1.6 billion improvement program for the famous shopping street was aimed at building stronger relationships with customers.

Beyond beacons, Jensen pointed to another technology that could improve retail experiences.

“Wearables that tap into a store’s security camera network to alert sales staff of what kind of help is needed,” he said. “Technology can help by observing just enough behaviors to help — then a store worker can help shoppers in a pleasant way.”

Avalos points to another promising technology: intelligent shelving.

store shelves

“It integrates advertising with helpful information about products,” he said. “When the shelf understands the products it is showcasing, it can participate more fully in the shopping process.”


Todd Krieger contributed this story.

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