As the number of retail store closings grows, the weight of blame placed on Millennials increases exponentially. Millennials are a new generation of shoppers which are equipped with resources that generations before them never had. Millennials are trending to enjoy more interactive and testing environments in the retail stores they’re shopping in. Despite this fact, many people still assume that Millennials only point and click on websites such as Amazon. These “traditional” stores have had to make large investments into their future with backing next generation technology.
Since Millennials are the first generation to have online shopping, the perception is that they over-value convenience. Because of this perception, it’s portrayed throughout the media and exposes people’s lack of knowledge of economic issues. This has fueled major retailers to innovate and evolve to enhance customer experience. To fully understand the arguments, certain terms must be defined. A big box retailer is a retail store that occupies a large amount of physical space and offers a variety of products to its customers, such as Wal-Mart (Investopedia Staff). Brick and mortar stores are defined as a businesses that operate conventionally with physical locations and face to face interactions rather than over the Internet (Investopedia Staff).
As new generations take the reins as young people in the workforce older generations blame them for their problems. Millennials were the first generation who grew up and began to utilize the internet for the purpose of shopping specifically. When older generations observe Millennials online, weather it may be for work, entertainment or the news, the older generations may assume that the Millennials are shopping. The perception now is that Millennials only shop online, are lazy and don’t go out to retail stores anymore. This assertion is backed up in the media as writers influence public opinion. A story published in the Daily Mail by political commentator Piers Morgan stated that “The tragic truth is that America’s Millennials are a bunch of phone-addicted, selfie-obsessed, hashtagging, snapchatting, kale-munching, twerking, lazy, whining, ill-informed, politically correct, cosseted narcissists who find absolutely everything mortally offensive” (Morgan).
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Another article published stated that “Millennials are lazy and think basic tasks are beneath them” (Hoyle). These negative statements published in the media encourage stereotypes and directly influence the way older generations think about Millennials. This perception that Millennials are lazy, don’t go out to shop at big box retailers and brick and mortar stores, and only point and click, emphasizes a critical reason why Millennials are being blamed for killing retail stores. Every different retail store has a different story for closings and not all are alike.
Millennials are blamed for killing retail stores because of the rise of closing department stores, layoffs and a lack of knowledge as to the true reason that these stores are closing. This year alone saw Toys R Us go bankrupt and close 735 stores, Sears and Kmart close approximately 100 stores and Radio Shack close 550 stores; the list goes on and on (Kestenbaum). These mass closings pose the question of why, who or what caused all of this? The popular answer that many people have jumped to is that Millennials are the source of these closings. In the case of Toys R Us, a large big box retailer, the reason for the closings is because of the amount of debt they had accumulated, and their failure to evolve and adjust accordingly to consumers’ needs. Toys R Us had a long history of debt even before they filed for bankruptcy.
After they were acquired and taken private by a few venture capital financing firms, it was reported that the retailer had $5.3 billion in debt (Isidore). This debt did not allow the business to recover and make changes, at the same time as Walmart and Amazon’s share in the toy retail marketplace grew. Sears and Kmart offer a different story for their closings. For Sears and Kmart, the reasons for closings is poor leadership from CEO Eddie Lampert. Lampert, who is a billionaire and often video chats into meetings at headquarters, is a “Wall Street man” who has the vision of having a “asset light” company with physical stores as well (Peterson). Lampert likes to discuss Sears as if it is a tech company and it’s often “his way or the highway” during meetings. This hostile culture is more to blame than any other reason.
While the average person may blame Millennials for these closings, these stories reveal other significant facts which produced the closings. Through all the blame put on Millennials for their killing retail stores, it seems as though things have only been getting better for consumers. With the coming of Millennials as the primary consumers in American society, customer experience has been enhanced significantly. More specifically, we can look at Kroger and Walmart. Kroger, the largest supermarket chain in the U.S, appears to be a traditional supermarket, but when taking an in depth look at the retailer, one sees a sophisticated tech and data collector. Kroger looks at their competitors in the online shopping industry and grocery delivery markets and asks itself how it can do better.
The answer for Kroger is to shorten their customer waiting times and make brick-and-mortar shopping more interactive. Cameras and infrared sensors are now being used to monitor foot traffic, to then analyze this information and understand customer behavior. Kroger did not stop at the entry doors, as they now have smart digital shelves with embedded sensors that track where shoppers are going so they can offer a more personalized experience (Pezzini). Making the shopping experience more personal for Millennials is helping Kroger as this is the trend of individual personalization Millennials want. The improvements Kroger has made will not only help Millennials, but also every consumer and will pave the way for Kroger’s future. Kroger is not the only retail mega-giant that is making adjustments for the future, as Walmart innovates with technology. Walmart has added services, such as online voice shopping and free two-day shipping. There is more to come from Walmart in the future.
To combat shoppers getting frustrated or lost in a retail store trying to find an item Walmart has added facial recognition technology to see how customers feel about their shopping experience (Hyken). While some may find this invasive of their privacy, this technology allows for positive benefits. For example, if a customer is looking for a particular item and is having a hard time finding it, this system permits store personnel to be made aware of the issue, with an employee approaching the customer to resolve the problem seamlessly. These innovations Walmart and Kroger have made will help them survive in the future.
Millennials are not typical shoppers who just purchase without thinking about what they’re buying. Retailers have been adjusting so they can survive for the future with Millennials new shopping preferences. Brands such as Lululemon, a yoga-inspired athletic apparel company for women and men, have adopted the practice of experiences over items offering free in-store fitness classes, incentivizing consumers to purchase items because of this added perk (McGee). Millennials search for purpose while identifying a retailer or where they want to spend their money. This has fueled the rise of stores that are ethically transparent and have a mission towards making the world a better place. Brilliant Earth, a company that designs and sells engagement rings and other jewelry that it certifies as being ethically sourced make this consumer promise to make the jewelry industry safe and humane (Baird).
Giving Millennials purpose in a purchase pays off as well as it is reported Brilliant Earth makes $33 million in annual revenue (Owler). All of the features that have been added to the retail industry by stores have helped pave the way for a good future. Businesses will always have to adapt and adjust for future conditions. Millennials are not the sole or primary reason for killing retail stores. The environment that Millennials have been placed in as the first generation with online shopping allows the public and media to target Millennials for blame.
Is it really true that overwhelming numbers of Millennials shop online only? A March 2017 survey, which examined the Distribution of Amazon Prime members in the United States by age group it was found that 39% of those that used Prime were 18-34 (the Millennials), 34% of those that used Prime were 35-54 represented and 26% of those that used Prime were 55 and older. While Millennials made up the largest group of Prime shoppers, they are not the sole group of Prime shoppers and therefore it is incorrect to blame them for the failure of brick and mortar retailers (Statista). Also, as discussed, older generations tend to simply blame Millennials based on false assumptions or perceptions. In truth, there are many reasons for the failure of retail stores. Millennials aren’t killing retail stores, and are only making the future of shopping better.
