Last week Macy’s announced they will be setting a new strategy for Generation Y shoppers. The news could raise retail eyebrows – a Gen Y-specific strategy may seem drastic, but Macy’s make a pretty mean case for the cause.
Macy’s press release identified a series of initiatives they hope will capture the ‘Millennial customer’, who they estimate have spending power of $65 million a year. The two-tiered process will aim to affect product offering and organisational structure.
Macy’s identified two customer types, the ‘mstylelab’ customer, who is aged 13-22, and the Impulse customer, aged 19-30. Macy’s already cater for the Impulse customer, with dedicated instore space and product offering, but hope that a bigger push on omni-channel will appeal more directly to the complex needs of the new generation shopper. Their commitment to speeding up internal decision making and product development will help Macy’s compete with fast fashion retail competition, for which Generation Y is hungry.
So who exactly are these Generation Y shoppers and from where have they sprung?
The concept isn’t new, first appearing in the early 90s in reference to the children of the Baby Boomers. What may be new is the dawning realisation of just how different this tribe of consumer is. Speaking at the L’Oreal Melbourne Fashion Festival, Mike Shearwood of Aurora Fashions (Oasis, Coast and Warehouse) succinctly outlined the key characteristics. Being stimulation junkies, whose social lives are cemented in technology, this is a consumer group who don’t seek uniqueness, they aim for acceptance. Gen Y-ers thrive on control and instant gratification and their friends are their key influencers. The relationship between Gen Y and their parents is interesting too: children treat their parents more like friends, sharing tastes and seeking approval. The effect of this close communication is that Generation X is picking up Y’s characteristics – doubling the importance of retailers and brands to be Y-savvy.
So how do brands respond to this stimulus-hungry group? Actually, many are doing it pretty well already. Look to ASOS‘s multi-faceted output: blog network, Fashion Finder, social presence. Add in their video-catwalk, Skype driven stylist appointments, constant stream of new products and Facebook ‘Like’ functions, all of which appeal to the characteristics identified, and you have a Gen Y-ready model. Topshop excel too, with their Tumblr, instore pop-ups and events. Aurora have exciting plans up their sleeves too, in which they will seamlessly blend customers’ social data with their instore experience to create a truly stimulating offering.
The high volume of product output from key retailers caters directly to Generation Y’s need for newness. Using our product database, which tracks over 8 million product SKUs, it becomes apparent that in the last 30 days both Zara and H&M dropped around 700 new products. Topshop, dropped 1,351 new products in the same time frame but the crown goes to ASOS with their 6,217 new arrivals in the last 30 days.
This market, with its demand for product deemed ‘acceptable’ by friends, pays close attention to changing trends. Happily for us at EDITD, they’re the most vocal online fashion commentators around, providing a wealth of information that drives our data! Brands and retailers had best get tooled up in the battle to win Generation Y round.