Retailers must market to Millennials or miss out

Prof Roland Goldberg

Consumer patterns are changing and retailers must adapt to new dynamics if they are to survive. A major driver behind the shift in purchasing patterns is the generation born between 1981 and 1996: Millennials.

This is according to new research by Prof Roland Goldberg and Prof Johan Gouws from the School of Management Sciences.

Their study, titled "The preferred retail format of Millennials in South Africa", delves into the shopping preferences of South African Millennials. Their findings unveil a nuanced interplay between online and offline shopping choices, shaped by product categories.

What differentiates Millennials from previous generations, according to Prof Goldberg and Prof Gouws, is that they are often tech-savvy, diverse and socially conscious.

They grew up in a time of rapid technological advancement, with access to the internet and mobile devices from a young age. As a result, they have a strong preference for digital communication and are more likely to use social media and online platforms to engage with brands and make purchasing decisions.

Millennials are also the largest generation in the current workforce and are thus shaping the modern-day workplace.

"Moreover, they prioritise a work-life balance, seek out job opportunities that align with their values, and prefer a collaborative and inclusive work culture. This generation tends to have a strong entrepreneurial spirit, with a higher rate of self-employment and a desire to start their own businesses," the two researchers say.

Millennials are also known for being more frugal and value-conscious than previous generations. They are more likely to prioritise experiences over material possessions and have a strong interest in sustainable and socially responsible products.

Prof Johan Gouws

In addition, Millennials tend to be more brand-agnostic and willing to switch between brands based on convenience, quality and price.

Brick and mortar still have their place

Whether Millennials in South Africa choose to shop online or offline depends on the products they want to buy.

Although the development and use of online shopping platforms in South Africa are growing at an unprecedented rate, with more and more customers buying and browsing products and services online, brick-and-mortar buildings still have their place.

Customers prefer physical stores when shopping for fresh produce, high-value items and clothing, while favouring online platforms for budget-conscious purchases.

To capitalise on these trends, retailers need to be smart, the study suggests. "Shopping centres need to create more targeted and personalised marketing efforts in order to attract Millennials. However, for shopping centres to innovate and strategise in this regard, it is necessary for their management to have a good understanding of where Millennials currently buy and where they prefer to buy certain products."

Although footfall in shopping centres dropped dramatically during the Covid-19 lockdowns, the Eighty20 research consultancy has reported that the largest shopping centres in South Africa are now back to pre-Covid levels.

Retailers hoping to attract more Millennials should note that these shoppers judiciously select the type of physical retail store based on factors such as location and the products they want. For everyday essentials, they favour local neighbourhood establishments or quaint boutiques, particularly when they have time constraints or want a less congested shopping experience.

Evidently, brick-and-mortar establishments continue to wield a substantial allure for Millennials, especially considering their multifaceted shopping inclinations.

While Millennials themselves have a nuanced need, the message to retailers is clear: Market to Millennials, or risk missing out on their purchasing power.