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Millennials: the force driving thrifting’s upsurge



What’s old is new again.

Need proof? One look at the resale market—particularly in clothing -- makes it abundantly clear that a change in market dynamics is happening.

A few months ago, GlobalData and online clothing retailer ThredUP released a study that estimated that the U.S. second-hand apparel market was worth $24 billion in 2018. Within 10 years, by 2028, the used-fashion market in the United States could explode, reaching $64 billion, an increase of 166 percent.

Goodwill stores and their ilk – church thrift shops, charity donation centers, etc. – have been around for years. That hasn’t changed.

But their ability to use technology to help categorize, price and display goods has exponentially increased. That, coupled with a burgeoning online presence has helped the segment grow.

But what has really made it popular is the millennial generation.


Millennials: today’s social conscience – and it shows in retail

Millennials are particularly attuned to being stewards of the planet.

As a result, the idea of using natural resources to create new products when used goods serve the purpose perfectly is anathema to these young adults.

Buying hand me-downs has a significantly smaller ecological footprint than purchasing new: According to thebalance.com, the annual environmental impact of a household’s clothing is equivalent to the water needed to fill 1,000 bathtubs and the carbon emissions from driving an average modern car for 6,000 miles.

Millennials also are extremely interested in supporting brands that share their personal values and tend to support purpose-driven companies.

So, buying clothing from a charity that supports low-income communities is a win-win for millennial shoppers.


Quality and value don’t have to be mutually exclusive

This generation is also focused on quality and value.

Buying a winter coat at a discounter may be the least expensive option, but its material quality is likely to be poor.

A better option might be a coat made of high-quality materials, but the price could be quadruple that of a big box competitor.

The best option, therefore, for these shoppers, would be a gently used coat from a high-quality brand.

Pricing will be drastically lower, with minimal degradation in quality.

For example, Patagonia's Worn Wear program encourages customers to bring in their old clothing to local stores for resale, in exchange for a gift card.

Many of those also include a note describing how the item was worn.

That creates a very special connection among the item, the seller, and the buyer.

Patagonia's mission: “To build the best product, cause no unnecessary harm, use business to inspire and implement solutions to the environmental crisis.”

The cost and quality of new items can never match the value proposition of cost and quality of used.

For example, a new dress shirt bought at a big-box discount retailer may cost the same as a used luxury brand, but the latter will last longer because of its quality construction. It may even be re-thrifted.

In addition, for truly vintage items, there is not only the appeal of "the hunt" for the piece, but also of its uniqueness.

For example, finding and wearing a Levi's red tab, sherpa-lined denim jacket from the 1980s has a special appeal.


Impact of ignoring the millennial mindset

Andy Ruben, a former global strategy exec at Walmart and founder of Yerdle, was a recent featured speaker on The Tony Robbins Podcast.

He warned of significant ramifications for retailers that did not recognize this Millennial mindset.

Retailers that ignore the customers' dedication to sustainability and their intense focus on value, as well as bespoke-type items, could result in a significant erosion of their customer base.

Recent studies report that sales of resold clothing will surpass the revenue of "fast-fashion" retailers, such as H&M, Forever XXI, etc.

In response, struggling department store chains could follow Patagonia's model and allow clothing "trade-ins."

Or, they could open a thrift-mart for luxury items, where customers could buy used items of highly desirable brands.

It's the same business model as that of a new car dealer that also owns a used car lot on the same property.

Another related concept that brick and mortar retail could adopt is one successfully launched by Rent the Runway, in which a woman can rent a designer outfit for a special occasion, spending far less money than if she'd bought the clothing.

Millennials are surpassing Baby Boomers in population; there are roughly 73 million in each group.

As a result, retailers' focus must evolve to take into consideration this generation's unique characteristics, including millennial's inclination to gravitate toward brands that are an expression of their personality.

Thrifting is environmentally conscious, budget-friendly and provides an opportunity to hunt for the just-right, uncommon item, which speaks directly to how millennials want to spend their money.

Knowing your customers and winning their loyalty: correlation or causation?



Customer retention is a huge challenge for retailers.

The cost of acquiring new customers is far greater —some studies suggest as much as seven times more — than keeping existing ones.

Creating a customer experience that is satisfying is a much more cost-effective strategy than constant prospecting.

Many find stopping customer churn to be a serious challenge but recognize the advantages of cultivating a base of customers: a 5% increase in customer loyalty can increase the average profit per customer, according to experts.

Retention can boost the average profit per customer by 25% to 100%, according to fitsmallbusiness.com.

Nurturing the emotional connection to your brand

Existing customers feel valued when they can participate in loyalty programs.

The programs foster a sense that they are getting a deal in appreciation for their repeat business.

Some businesses assume that by simply rewarding customers with discounts, shoppers will become more loyal.

However, cultivating a strong emotional bond between a brand and its customers is what makes it more likely that a customer will visit the store in the future.

For example, offering a sales discount as part of a birthday recognition personalizes the rewards experience to every member, making each feel special and recognized for being a loyalty club member.

Winning loyalty with new customers & millennials

While well-run loyalty programs that deliver customer satisfaction clearly improve retention rates, they can also be a means to attract new customers.

First-time shoppers can easily recognize a program that makes customers a priority and that anticipates and exceeds their needs as soon as they join.

Having a well-designed loyalty program not only keeps returning customers happy, but it also grows the retailer's customer base.

Millennials are the largest group of shoppers in the current market, and as a demographic, they are very brand loyal.

However, they are particular about what they are looking for in a loyalty program.

No punch cards for this generation — or trading stamps.

The key to success with millennials is building a relationship, and that's done through offering special experiences rather than coupons.

For example, a credit card that offers advance ticket purchasing for popular events; a coffee shop that gives members a heads up to seasonal drinks or a makeup line that provides VIP access to a celebrity Q&A on a social network are ways to make a customer feel special and want to be part of a loyalty program.

Loyalty programs are important to retain customers and attract new shoppers, as well as to help retailers forge deeper, richer, customer connections.

Happy customers spread the word, and prospective customers generally trust friends’ feedback more than advertisements or other types of marketing.

Loyalty programs help polish a retailer's image.

Humans want to feel known, and loyalty programs help retailers provide that experience.

By doing so, retailers reap the benefits of repeat customers while attracting new ones — and enhancing their brand's reputation.


Understanding the shopper in your data



An important way to achieve greater retail success is to be more data-centric.

Relying on retail analytics and hard data rather than guesswork helps companies make more educated decisions about the products they carry.

They can dig into point of sale information across the entire enterprise and send the right mix of products to the stores best suited to sell them.

Understanding the customer helps retailers improve customer satisfaction and earn higher profits.

Data collection is ubiquitous.

Ecommerce shoppers understand their information is logged and stored with each transaction, even if anonymously.

Brick and mortar retailers collect data through cash registers and gather geographic information by entering ZIP codes.

The information that can be collected is varied, but at a minimum includes customer, transactional, inventory, and shipment data.

There's also data to be mined in social media, location and in-store movement.


Social media

Retailers have always needed to pay attention to what customers are thinking.

Whether the buzz is about a hot brand, a rising trend, or a celebrity endorsement, savvy retailers are in-the-know.

Today, much of that type of information is just a click away, on platforms including Facebook, Twitter, Instagram or Pinterest.

"Social listening" requires retailers to pay attention to what target customers are saying.

Many use social media monitoring services to analyze their audiences and identify product gaps in their offerings compared with competitors as well as with customer expectations.


Site location

As they say in real estate, "location, location, location."

Retailers looking to expand can use current-store data to inform decisions when selecting future sites.

By studying where target consumers visit most frequently and analyzing movement patterns around specific areas, retailers can take much of the guesswork out of expansion plans.

Incorporating demographic information and personas into location vetting provides insights into consumer behaviors, helping to ensure that the ultimate site selected will have the "right" customers nearby.


In-Store Movement

Geolocation has been used for several years by retailers who use the technology to alert nearby customers to promotions.

Today, location-tracking technology can monitor shoppers with pinpoint accuracy, allowing retailers to know, for example, if a customer went to the fitting room but didn't make a purchase, or which cosmetic counters were visited.

Sales of location-targeted advertising could reach $21 billion this year, according to CNBC.

However, it's not the quantity of the data collected that is most important, rather it's knowing how to digest and use it that counts.

Collecting and consolidating all of that data provides a powerful overview of every action customers have taken – on their mobile devices, on the website, or in a brick and mortar store.


NRF2020 recap: Insight for people-first retail



It is no small thing that this year’s NRF was called 2020 Vision.

The show shed light on retailer’s perspectives and trajectories for 2020 – and perhaps more significantly highlighted what deeper visibility into your data can and should lead to: understanding your customers.



The conversation continued in full length at the Retail Pro booth, where specialty retailers of all shapes and sizes came to see what’s new in Retail Pro Prism and how it is that every day, ordinary, unsexy technology like POS turned out to be one of the most helpful to retailers for seeing your customers more clearly.


Retail is about people



No matter the trend, retail is – and always should be – about the people.

NRF sessions highlighted the sober truth that with the flux of rapid business expansion and the advance of technologies used in and around the store, attention devoted to customers tends to get ebb and flow congruently, sometimes resulting in neglected shoppers.

But in the immediate past, retailers’ use of technology has returned to its senses and refocused on the improvement of shopper experiences.



For example, we see more long-standing retailers taking on Retail Pro Prism on mobile devices, so associates can spend more time interacting with shoppers on the sales floor.

Mobility breaks the mental mold of needing to stand behind a counter at all times and releases the power of more personal interactions. Your customers get personal attention; you get a person’s loyalty.

Alex Genov, Head of Customer Research for Zappos, commented at NRF 2020 Vision: Retail’s Big Show on what customer-centricity means to Zappos.

“I’ve been on a mission to basically tell businesses and companies to understand their customers as people. Not as shoppers, not as users, not as callers. And there’s a subtle difference,” said Genov. “It’s all great to look at big data and statistics, but without understanding individual customers…it’s very hard to build emotional and memorable experiences.”

Well said, Genov.

How you frame our thinking about the people who shop with you will impact the technology investments you find yourself willing to make.


Uncovering insight



How you view your customers, too, will impact what kind of data you’ll be after, and what you’re going to do with it, and as one presenter infamously quipped, YOU NEED CLEAN DATA.

Let’s make another claim that just as painfully obvious, and just as operationally challenging: to actually understand your customers, you need to understand how they are interacting with you at all your touchpoints, and you need to look at that data holistically.

The Retail Pro solution gives retailers a head start with the ability to integrate all data sources, including everything from your POS to your social media, to get the kind of holistic insight on your fans and customers that you need to deliver memorable experiences.

It’s great that Marketing is looking at who’s clicking on your emails and SMS offers and whether they follow through to make a purchase.

And it’s great that you retail GM is looking at product sell-through.

But who’s looking at both of those pictures to see what it says about the interplay between the individual and the whole?

There’s a lot to learn about the unique, individual customer by looking at them against the backdrop of the whole customer base, and unifying your data will go a long way toward getting you there.

PetSmart, for example, is funneling their data into a solution of AI with indoor location tech to better understand and cater to their customers.

“Maybe you’re walking into our services area and we can tell in real time whether you’re a services customer or not,” said Dave Caldwell, PetSmart’s vice president of IT service delivery, in their session. “If not, would it be appropriate notify an associate to approach you to ask if you’d like to learn about, say, grooming? Or suppose a known cat owner is browsing the puppy food aisle. That’s a customer who might benefit from a new puppy starter kit, so maybe an employee should suggest it.”


Captivating with creativity



Brands are evolving as much in technology as they are in concept.

Many of the sessions at NRF2020 reflected exuberantly retail renewed flair for the colorful, with pop up concepts and creative ways to build community with your brand.

As a browser-based solution, Retail Pro makes it easy to launch a new mobile POS for your one-month pop up in the heart of NYC or your traveling VIP events.

The creativity for community challenge was highlighted especially in a session with Rod Sides, Deloitte’s vice chairman and U.S. leader for retail, wholesale and distribution practice, and Kevin Plank, executive chairman and brand chief of Under Armour.

“The question for retailers is, how do we create that stickiness? How do we create community? How do we remain relevant in the lives of consumers? It’s about promise. It’s the promise of, ‘Here’s what my brand is all about.’ It’s about being able to connect with the consumer in a different way, and it’s about being able to deliver on that brand promise.”

Plank comments, “Today we’re in 60 countries representing about 10 miles of storefront, or 170 football fields. So, we’re alive and we’re thriving, but we stay aware that you’ve got to bring it to life every day.” Under Armour has some 1,200 stores, 300 of which opened last year, most in the Asia/Pacific region running the Retail Pro Prism software.

Didn’t get to see Retail Pro Prism at NRF this year? See it in action for yourself with a free demo.



Need answers? Ask your POS.



Today’s retail is a broad spectrum of digital and brick & mortar options: great for the customer, complex and costly for the retailer.

Within the ambition for omnichannel, your team also has a lot on their plate in working toward increasing profitability, optimizing for operational efficiency, and all your efforts to delight customers across channels.

And they have lots of questions.

  • Which products sell better?
  • What sells better online vs in stores?
  • What sells better at which location?
  • Where is inventory turn too low?
  • How can I improve turn without losing so much on margins?
  • What am I losing by holding too much inventory?
  • What is the opportunity cost of out of stocks?
  • What is the cost of losing customer trust due to out of stocks?

Your retail data has the answers.

But how do you go from data to insight?


Get insight with Retail Pro


The future of retail is insight: not just knowing the customer; understanding the customer.

So give your team the technology every department will use and benefit from with the powerful Retail Pro POS and retail management software – named top POS worldwide for midmarket retail.

  • Get total data visibility across the enterprise worldwide
  • Centrally manage and regionally tailor all your subsidiaries and locations
  • Dig into integrated POS & ERP data to get the right products to the right stores
  • Empower associates to get answers for customers with lookup and orders on mobile POS
  • Discover shopper insights with unified POS, ecommerce, website, and social media data
  • Act on insight with AI-powered personalized marketing and promotions


POS as deep as your enterprise


With total visibility and powerful visual analytics tools in Retail Pro, you can get insight into how your retail customers shop with you and what they’re after.

Plus, Retail Pro gives you the power and flexibility to run your multifaceted business your way.

MULTI-NATIONAL Expand into new and emerging markets with globally trusted Retail Pro POS

MULTI-REGION Customize your Retail Pro POS to region-specific needs and requirements

MULTI-SUBSIDIARY Centrally manage data for each subsidiary in one application

MULTI-LANGUAGE Choose from 18+ built-in languages or easily plug in other localizations for your region-specific needs

MULTI-CURRENCY Accept multiple currencies and tenders in one transaction

MULTI-TAX Meet regional fiscal and tax requirements like VAT, GST, HST, and ICMS


Visit us at NRF booth 5573 to see how you can get insight on what your shoppers want in both goods and experience with the end-to-end, unified Retail Pro solution.



Just-in-time inventory strategies help retailers stay competitive



Keeping “just enough” inventory on hand to cover demand is a strategy retailers can use to keep more of a company’s value in cash, increase its liquid assets and offer more access to investing options.


The JIT model across industries


Just-in-time (JIT) strategies have been popular in the auto and manufacturing industries since the 1970s, but today are gaining momentum in retail, as that segment increasingly embraces business automation.

The methodology is being considered as a method for improving retail profitability and operations.

Toyota many years ago made the JIT inventory system a mainstream model of efficiency.

Instead of ordering excess product, JIT managers focused on ordering just the amount of parts that were needed to get through a production cycle, thereby reducing the amount of “buffer” product.

Unused buffer is, ultimately, waste; in retail, that buffer is excess inventory.


JIT works better with better data

One tool retailers can use today that wasn’t available in the 70’s is data analytics.

The collection and analysis of big data makes it possible for any retailer to forecast demand reliably.

Every item sold can be tracked, as well as when it was sold, how many people walked by the store, how many of those came inside, how foot traffic changed when it rained, etc.

Although major big box retailers such as Best Buy and Target may be able to easily afford large quantities of inventory to fill their shelves, new and boutique retailers don’t have such large bankrolls.

They often are challenged to keep up with demand without spending a significant amount of cash on inventory.

A JIT strategy of supply-chain management provides flexibility, because the model is set up to minimize inventory on-hand and in storage.

That lets them order to meet demand, and not be stuck holding inventory that doesn’t sell if trend forecasts go sideways.

JIT retailers won’t be tying up capital in inventory, so they’ll have cash on-hand to invest in competitive endeavors or in other opportunities.

Tying up money in inventory means a retailer can’t react swiftly to a sudden consumer trend, because there’s no liquid capital available.

So retailers are forced to respond by quickly offloading their old excess inventory to make room for -- and pay for -- products that are in demand.

Compounding the situation, the stale stock is usually sold off at a steep markdown. JIT delivery of inventory frees up space in the warehouse and reduces “dead” inventory.


Shorter lead times


Shortening lead times with suppliers also creates a JIT atmosphere.

Waiting one week rather than three for shipments means a smaller inventory buffer is needed to cover spikes in demand.

By working with suppliers and vendors, retailers can shorten lead times, and gain more freedom to run a lean inventory system.

When retailers err on the side of ordering too little, the result is a poor selection -- and experience -- for customers.

Data is the backbone of inventory planning function and is vital to providing a good experience that entices customers to return.


Bespoke is the new black

Luxury retail has always catered to the one-of-a-kind purchase: that piece of jewelry made expressly for her, that suit tailored just for him.

Today, that desire has filtered down to more everyday shopping.

Millennials are driving the bespoke movement — a trend that can differentiate retailers looking to stand out in customer service.


Super-charged customization


Bespoke is something made "just for you."

It is the shirt made on Savile Row, from the material selected by the customer and personally tailored for the perfect fit.

It is "super-charged" customization.

Today, bespoke suits are still prized, but today's workplace often has a casual style.

Millennials are leading the charge for a more dressed down look, while looking for clothing and accessories that allow them to stand apart from the crowd.

In addition, they are not expecting to pay luxe prices and are not as brand conscious as other generations, although they do consider brand "promise," or what they consider the brand stands for.

For example, NikeID offers a relatively inexpensive way to customize pairs of sneakers online and has an agreeable brand promise to bring inspiration and innovation to every athlete/body in the world.

Levi's also offers a bespoke experience to rival that of Saville Row.

Customers can choose from organic cottons, canvas and chino-cottons, as well as different weights of denim from 8 oz to 22 oz.

Shoppers can select rivets and special accommodations, such as removal of belt loops.

The bespoke service is available in the Champs Elysées Levi’s store in Paris, London, New York and San Francisco.

Being unique takes time, however; the wait time for jeans in London is roughly 14 weeks, including one fitting.

The price: Approximately $610 for the first pair, with every subsequent pair in the same style $550.


Revenue potential


Offering bespoke products is increasingly seen as a profitable means of brand extension for both affordable brands such as Nike and Levis, as well as luxury brands such as Gucci DIY and Burberry Bespoke.

Research by Deloitte in 2017 found that 71.4% of U.S. millennial consumers were ready to pay a premium to get a product in some way personalized to them, indicating a huge market potential.

Another benefit to retailers is the ability to learn what trends may be coming, based on the bespoke items being requested.

Discovering trends from these unique items can help provide market research for brands' future offerings.


Growing demand for bespoke


Bespoke is not new, but the growing demand for everyday brands to offer some interpretation of it is.

That push, driven by Millennials but embraced by other generations as well, is likely to motivate marketers to offer more customization in their products.

As retailers escalate their data collection efforts by adopting artificial intelligence and leading-edge business analytics, personalization will become increasingly granular.

Items that may not currently be offered as bespoke may be identified as not only possible but also as desired.

Buying off-the-shelf, customized and bespoke may one day be just a few choices of several purchasing options, even at the department store in the local mall. 

In-store inventory: Curating to compete against ecommerce’s endless aisle



One of the most difficult things for a retailer is understanding what items to have in-store and which could be successfully handled in online as part of an endless aisle strategy.

For brick and mortar retailers, physical in-store space is finite, and what’s available must be used effectively.

That is particularly challenging as brick and mortar retailers face the vast breadth of inventory that ecommerce competitors offer.

However, sometimes that enormous ocean of product can overwhelm customers.


Get insight into inventory


Traditional retailers can augment what’s in-store with online offerings, but one of the highlights of being brick and mortar is the ability to offer “look and feel” in a curated environment.

The “inner sanctum” of any retail store is the inventory area.

Making the most of that space will save any retailer money.

Storing inventory and supplies in a warehouse comes at a cost, especially if it eats away at display/retail space. Off-site inventory incurs rental and transportation costs, as well.

However, retailers must have “the right” inventory on hand so shoppers don’t leave stores empty-handed.

Retail inventory management keeps the backend in line with the front-end’s needs.

Good retail management software helps you see:

  • The quantities of each product in stock
  • A sense of when reordering is necessary
  • The number of items that should be ordered regularly
  • Best selling items
  • Items that are unpopular
  • The amount of inventory on-hand is adequate
  • If overstocking is a concern
  • If your inventory space is not big enough

Getting a handle on inventory management affects a business’ bottom-line, allowing it not only to continue operating, but also to grow.

Without a strong inventory management process, it’s easy to lose track of stock.

Mismanaged items are more easily stolen and seem to vanish without a trace – precisely because there is no traceability.

In a worst-case scenario, a retailer spends money on unknowingly replacing stolen goods, while paying to store an item that was ordered to replace a product that was never actually sold.

Additionally, not having a firm grasp on inventory levels can also mean running out of stock more easily, missing sales opportunities.

Today, many retailers offer a buy online, pickup in store option.

Not having inventory in sync with on-hand counts is a customer experience disaster.

In addition to keeping accurate inventory numbers, some stock management can be handled within the product displays.

The cost of storage depends upon the amount of inventory needed to be stored.

Planograms, or the blueprint of a store’s layout, can help retailers improve sales with visual merchandising.


Digitize the in-store experience


Today’s shoppers are used to a much higher level of convenience, choice and accessibility than in the past, because of the influence ecommerce has had on retail.

Therefore, it’s important for stores to “digitize” by providing personal recommendations, customer reviews and increased assortments, so that when customers enter a physical store, their expectations are met.

Planograms help to arrange merchandise in a way that catches the customer’s eye, organizing in a way that provides more room on your shelves, and helps estimate how much to place on the sales floor.

Brick and mortar retailers should focus on effective use of inventory space.

Too much is as detrimental as too little.

By employing retail management technology to count and manage products, they can offer what customers want, when they want it, while maintaining a healthy profit margin.




Is your omnichannel meeting customers’ expectations?


Today's customers often want a fast, efficient shopping experience, and retailers are increasingly providing omnichannel experiences that are refined to meet those needs.

While retailers hope to gain revenue and gain efficiencies in marketing, what do customers view as a successful omnichannel experience?

Origin of omnichannel

Ten years ago, a retailer might offer an online as well as a brick and mortar experience, hoping to catch shoppers who couldn't make it to the store.

In essence, e-commerce began as a way retailers could extend their shopping hours.

Today, for many, e-commerce has evolved into a preferred means of shopping for many common items, but it doesn't replace traditional shopping entirely.

That's where a strong omni-channel strategy comes into play.

Clothing, electronics, furnishings — those are items that customers typically want to see in-person before buying.

They may not want to purchase them in-person, however.

Additionally, shoppers often want opinions of their friends before committing to those types of purchases.

Best-in-class omnichannel retailing serves shoppers through multiple sales channels—primarily online, in-store and social media — in a way that is presented cohesively, no matter how or where the customer journey began.

The reality today

From the customer's point of view, most businesses currently provide a multi-channel experience.

There is a brick and mortar store, a website, a Facebook page, a Twitter account, and, perhaps, a blog.

Those platforms engage and connect with customers, but rarely as a cohesive unit.

In most cases, there is no seamless experience or consistent messaging across channels.

Many times, "buy online, pickup in store," or BOPIS, is unavailable, because inventory systems are disparate.

What it takes to do omnichannel well

A successful strategy should build a coherent, aligned experience across multiple platforms and involve stakeholders including the product, marketing, sales, customer support and customer journey teams.

Each shopping channel should work concurrently to provide a truly powerful experience through many shopping touch points.

Among the most important areas to align include:

  • Inventory: Online reflects in-store stock
  • Rewards programs: Use and earn points online and in-store
  • Shipping and delivery: Delivery status can be checked in-store or online

While the biggest changes have come primarily from the largest retailers, many smaller companies have actually driven the customer experience crusade, using social media platforms to engage directly with shoppers.

Start-up retailers generally have omni-channel "baked in" as a foundation, leaving larger companies challenged to compete.

Retail consultant McKinsey notes that an omni-channel transformation is the only way for a company to address rising complexity, provide an excellent customer experience, and manage operations costs.

A true omni-channel strategy improves communication within the retailer itself, because different departments are routinely updating statuses that are then reflected throughout the internal supply chain.

As a result, the strategy better meets the needs of today's customer.

Innovating millennial loyalty



Regular customers appreciate being recognized and rewarded for their repeat business, and loyalty programs typically offer discounts or exclusive deals to a retailer’s regular customers.

Many programs pretty much follow the same tried-and-true script: Make a purchase, get a reward.

Generally, those rewards are points that can be accumulated and spent or applied as a discount.

The oldest loyalty program is Betty Crocker's box top program, which debuted in 1929, and laid the foundation for today's loyalty programs.

But the times they are achangin', and brands know that the loyalty rewards programs of yesterday may not have what it takes to compete today.


Easier to earn, more fun to spend


Innovation is key to attracting and retaining customers, especially millennials, with rewards programs.

The hospitality segment has several creative programs.

For example, the Marriott Rewards program gives guests opportunity to earn loyalty points just by posting about their visits on Twitter, checking in on Facebook, or posting a picture on Instagram using a predefined hashtag.

Hotel chain Citizen M offers extras such as free on-demand movies, 10 percent-off each booking, free Wi-Fi and drink tickets which can be exchanged for free libations at the lobby bar.


Changing consumer sentiment


Whereas earlier generations may have had patience for collecting Betty Crocker's box tops, a majority of millennials do not.

Kobie Marketing's report, Loyalty in the Age of the Connected Consumer found that 4% of millennials won’t join a loyalty program if they consider the enrollment process for a loyalty program too time consuming.

They also want to reap the benefits quickly.

Accenture estimates the generation spends $600 billion annually, so crafting a loyalty program that appeals to millennials could indeed be profitable.

Traditionally, these programs have regarded customers with discounts.

But today, brands are learning that millennials prefer "experiences" to a discount punchcard.

Exclusive events or promotions are particularly attractive to young adults and is what drives successful loyalty programs such as Starbucks.

The coffee purveyor delights shoppers with music downloads, games, exclusive deals, advance notice of seasonal products and, of course, the occasional free coffee.

The variety and frequency of rewards encourages repeat customers.


Future of loyalty


Loyalty programs have enjoyed a long, rich history primarily because retailers have recognized shifting customer priorities and have adapted their rewards as appropriate.

While loyalty programs of the past have been viewed as a system to reward shoppers for simply making a purchase, the loyalty programs of the future leverage historical customer shopping patterns to entice repeat purchases and increase ticket values.

For many Millennials and Gen Z customers, even that won't be enough.

These customers have been exposed to social media, streaming digital media, and online shopping for nearly their entire lives.

With this comes an expectation to not only receive offers, rewards, and content personalized to them, but also that these offers be delivered via their preferred touch points (i.e. email, text message, social media, etc.)

Brands that want to continue to grow and include the millennial shopper will expand their loyalty strategies that highlight engagement, personalization and convenience.









Points of Sale








Points of Sale








Points of Sale