Retail moves at the speed of culture, which means players sometimes quickly come and go. This speed is hastened by new technology and the group of shoppers using it the most – Millennials.
Millennials – The Rising Opportunity for Indian Retailers
A rising middle class ready to spend and a Millennial population dominating the population pyramid offers the perfect opportunity for Indian retailers to shape their strategies for the next five years. According to Morgan Stanley, Millennials may have the ability to buy as much as Rs 16 lakh crore worth of goods and services online by 2020.
Millennials The World Over Want Brands and Businesses With Higher Ideals and ‘Purpose’
Indian Millennials are no different from their global counterparts and want brands and businesses to take on higher human ideals and serve societies and communities across the world. A 2014 global survey with this segment revealed a strong desire for businesses to get directly involved in making the world a better place. Interestingly, the percentages reporting this was remarkably higher in emerging markets like India, China and Brazil as detailed in the exhibit below.
Four Strategies for Retailers to Win the Hearts and Minds of Millinnials With Purpose
Innate Motion’s framework below, or the ‘Human Canvas’, is developed from established theories of human motivation. It combines personal and social motivations to explain what are the emotional drivers of consumer behaviour, offering a strategic tool for marketers to connect with their target. Each ‘quadrant’ reflects a certain emotional ‘ethos’ that ‘purpose’retailers can play in and helps set the tone and direction of their ‘purpose’ driven strategy.
The BLUE QUADRANT reflects the ‘ethos of essence’ and is characterized by softer attributes of caring, nurturing and protecting what we have. It revolves around preserving and treasuring what is important and what is precious to us. Indian retailers who want to play in this space would go for strategies to promote ethnic and traditional products, preserve traditional retailing formats, campaign for activation strategies that help reduce waste and save the environment.
The GREEN QUADRANT is the ‘ethos of mastery’ and embraces the use of expertise and knowledge to stand out in our world. Retailer strategies here would typically involve the use of Internet technology to make shopping convenient and effortless for their target.
The RED QUADRANT is the ‘ethos of possibility’ and celebrates individuality, self-confidence, autonomy and self-expression. Retailers who want to play in this space would strive for empowerment of consumers by giving them platforms for self-expression and personal experiences.
The ORANGE QUADRANTis the ‘ethos of abundance’ and celebrates bonding, bringing people and communities together, reducing inequalities and disparities. Retailers who want to play in this space would formulate ‘giving’ strategies such as ‘1 for 1’ schemes, helping the underprivileged and needy. Support for fair trade practices and workers’ rights and upliftment would also be positioned here.
Examples from Real Retailers
We studied retailers in India and across the world, and found interesting stories to tell for each of the four quadrants. varied, from apparels to shoes, eyewear, groceries, to male grooming.
Each retailer had done something special, something outside the box that impacted humanity in a special way, and qualify them to become ‘purpose retailers’. We studied detailed strategies of four retailers, one in each quadrant, who had done a remarkable job with their value proposition that we felt resonates well with Millennials.
In a highly connected digital environment, Millennials seek social identities they can be known for and proud of. By celebrating the ‘India story’, FabIndia gives them a unique cultural identity to showcase to the rest of the world, and a feeling of pride and ‘purpose’ in preserving their traditional heritage.
The 2014 Millennial survey revealed Indian Millennials are concerned about the global impact on small businesses. The Aaram shop story addresses their inherent need to retain their personalized relationships with neighbourhood stores using modern technology, and offers an exciting model that will resonate well with this target segment.
The Axe pop up store, by offering a personalized grooming experience is a perfect example of enabling self-expression and authenticity (important values for Millennials) and at the same time giving an exciting customer experience in the retail environment.
The business model for Warby Parker came from three ideas: buying glasses should be fun and easy; it should leave you happy, looking good, and with money still in your wallet; and everyone has a right to see. This appeals to the Millennials’ inherent desire to help others while also allowing them to affordably look stylish in public. Warby Parker has built its brand and created loyal Millinneal customers through the power of earned social,
which isdigital word-of-mouth recommendation mechanism. Warby Parker’s social good makes the brand very shareable for Facebook users who want to project a socially conscious lifestyle, while still participating in a consumer-centric society.
3 Principals For Becoming A ‘Purpose Driven’ Retailer
Indian Retailers need to shift away from transactional thinking and adopt a ‘giver mindset’. This requires elevating from brand and product to human, culture and society. This requires asking the existential question ‘what is our purpose in the world’?
To thrive with purpose, companies need to learn to unlock and harness the contribution capacities of the communities they serve and depend upon. To do so they need to get their stakeholders to take on a ‘giver’ mindset. Most businesses are designed for delivering value to customers. What they still need to discover is how to design for contribution.
In crafting the principles that drive a transformation towards a higher purpose, we learnt many lessons not from other brands and marketers, but from great leaders and activists who have made a tremendous impact in the world. We looked at the strategies of Gandhi, Mandela and Mother Teresa and found three core principals to their strategy:
• PRINCIPAL #1: Pick a fight that matters to you – Find a purpose or higher human ideal that relates to your category, brand or service. ‘FabIndia’fought for preserving our heritage and ,‘Axe ‘encouraged men to respect themselves,‘Warby Parker’ fought for
democratization of the eyewear market and saving the world from poor vision and blindness. The ‘purpose’ or fight should sound authentic and relate to the business you are in, and not a ‘force fit’ like many ill-conceived CSR strategies.
• PRINCIPAL #2: Stage the battle – Effective story telling is important. It creates awareness for your cause and point of view. Find unique and new ways to stage it by picking a cause that matters to many people, not just a select few and create an impactful narrative around it.
• PRINCIPAL # 3: Engage others to join – Successful activists know that a point of view has to be translated into a point of action. In order to have any impact, action has to be scaled up and people need to be mobilised. Treat and encourage consumers to be active contributors instead of passive receivers.
Following these three principals will ensure you will have won the hearts and minds of the Millinnials. And Gen Z is on the way!