What do millennial shoppers really want?
Millennials are at the forefront of using technology and it is reshaping the way they shop. However, contrary to expectations, 70 percent of millennials prefer to shop in a store instead of online and this is unlikely to dramatically change in the future, according to new research from CBRE.
CBRE has conducted one of the most extensive and detailed global research projects which surveyed 13,000 millennials aged between 22 and 29 across 12 countries to understand how they approach lifestyle choices through live, work and play and what this means for future trends in real estate.
Millennials are the first generation to be true digital natives. This immediate access to any part of the online world has driven an increased belief that immediate gratification is something to achieve in all aspects of life.
Almost half of the respondents want to be able to have a desired product immediately and they want to be able to see, touch, feel, test and try out the product in store. While a total of 27 percent of shopping is done online by the majority of millennials, popularity of online shopping varies dramatically by country due to the differing retail dynamic in each country.
In countries which have an established international network of retailers, it is likely that online penetration will be higher than those where retailers are more focused on local markets. When the ‘millennial shopper’ does buy online they want the items delivered to their own home. A significant two thirds of people said they preferred home delivery, followed by delivery to place of work while ‘click and collect’, lingered as a third option. Leisure is also an increasingly important part of a millennial’s life and 50 percent of their income goes on eating out, shopping, visiting the cinema and going to live events.
The findings from the report also reveal that this generation of young adults are facing significant challenges in finding affordable places to live. This is largely attributed to the high cost of residential property and rents coupled with a lack of suitable jobs. Nearly half (49 percent) of all respondents surveyed, still live at home with their parents and 74 percent say that wages are not keeping up with property prices, which is one of the main reasons that they are still living with family. A total of 65 percent cited the reason they rent instead of buying a property due to financial circumstances.
The survey also looked at what millennials want from a job. A total of 64 percent of millennials consider themselves fortunate to have a job and that working for a small number of companies during their career is something that they aspire to. However, the level of loyalty to a company is ranked low and workers will move jobs if the right salary, learning and development and opportunity to work with similar minded people arises. According to the CBRE research, 78 percent of respondents see the quality of the workplace as a key factor when choosing an employer. While salary and benefits remain the main draw when considering a job, when money is removed from the equation, work/life balance stands out along with other factors such as better office environments. In fact, 69 percent of respondents said that they would be willing to give up other benefits for a better office environment, underlining the increasing pressure on developers and landlords to create the optimum work environment for attracting and retaining top talent.
Andrew Phipps, Head of EMEA & UK retail at CBRE, said: “The findings of our global research have dispelled some assumptions and reinforced others. The fact that millennials have joined the workforce during a time of global economic change has had a profound impact on places they work, live and play. From a retail perspective it is a certainty that the physical store retains its position of importance in the shopper’s journey. Online is seen to complement the in-store shopping as opposed to a direct alternative. This means that the need for retailers to create compelling experiences to ensure shoppers have a reason to visit again and again has never been greater. It's a truism that millennials are the future and an in–depth understanding of what they want, and importantly, what they don't want, is key.”
Olesya Dzuba, Head of Research, Russia, CBRE: “People born in 2000’s today are already the major demand driving force for retail, and in five years this generation will form the basis of labor force. And this tendency is true for the majority of the developed countries with similar demographic model or reproduction population. That is why all retail market participants, both retailers and developers, need to take into account behavioural peculiarities of these people. For example, Russian millennials spend up to 50 percent of their income on leisure, entertainment and eating outdoor. And this is affecting the shopping centre tenant mix, where the volume of occupied premises of entertainment and food and beverage (excluding food courts) for the last five years increased two times to occupy 16 percent and more of shopping centre gross leasable area on average.”