MILLENNIALS The generation reshaping travel and shopping habits - June 2018 - Roland Berger
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
18-34
MILLENNIALS
The generation reshaping travel and shopping habits
June 2018
Photo AdobeStock / Ekaterina Pokrovsky
Global Blue Roland Berger
Alexis Gardy
Group communication & Editorial Senior Partner, Tourism & Leisure
Domitille Pinta Gaëlle de la Fosse
Head of Group Communication Partner, Retail & Luxury
Ella Collier Sébastien Manceau
AVP - Editorial Principal, Retail & Tourism
Alison Cerles Carolyn Breitenstein
Editorial and External Communication Officer Senior Expert, Consumer Goods & Retail
Pauline de Clermont Tonnerre Mame Sambou
Corporate Communication Coordinator Marketing & Communication Advisor
Gwyneth Holland
Contributing Editor Roland Berger
62-64 rue de Lisbonne
Data 75008 Paris, France
Mathieu Grac rolandberger.com/fr
VP Intelligence Strategy @BergerParis
Studio & Publishing
Fabio Gervasoni
Art Director
Yuese Shi
Senior Designer
Global Blue SA
Route de Crassier 7,
CH-1262 Eysins, Suisse
globalblue.com
@globalbluegroup
2
CONTENTS
CONTENTS
THE NEW GLOBE SHOPPER
4-5
Who is the Millennial?
15-17
Millennials lead the way
6-7
Interview with Sébastien Manceau
18
City focus
and Laurent Delmas
THE NEW GLOBE TRAVELLER
19-21
New retail
9-10
A new traveller 22-23
New connections
11-13
A new offer
THE NEW GLOBE EXPERIENCER
25-27
Going glocal
28-29
Make Paris cool again
30-31
About us & aknowledgements
WHO
WHO ISIS
THETHE MILLENNIAL
MILLENNIAL?
Who is the Millennial traveller
in 2018? What are they looking
for when they travel abroad?
How do they differ from other
generations?
4
IN BRIEF
born between Digitally minded generation Global community
1984 - 2000 Security is top of mind Tech savvy
18/34
source: WMFC
Achievement Optimism
years old
Avid consumers Street smart
High morals Looking for experience
WHAT DO THEY REPRESENT?
1.8bn
Millennials
300m-330m 2 long trips
travellers per year on average
source: Nielsen, 2017 - UNWTO, 2016
1/3 4 long trips
Millennials per year
50% $350bn $
$
$
shoppers in the travel retail market value of market
SHARE OF WALLET WHEN TRAVELLING
CHINESE AMERICAN FRENCH
source: Expedia Media Solutions, 2017
18% Shopping 8% Shopping 10% Shopping
19% Other 18% Other 21% Other
11% Attractions 11% Attractions
14% Flights 16% Attractions
16% Food 15% Food
20% Flights 20% Flights
17% Hotel 16% Food
27% Hotel 23% Hotel
5
JOINT INTERVIEW WITH SÉBASTIEN MANCEAU
AND LAURENT DELMAS
Sébastien Manceau Laurent Delmas
Principal At Roland Berger, Global Blue Chief Operating
Retail and Tourism Officer, South Europe
What are some key characteristics defining Laurent Delmas:
the Millennial globe traveller and shopper These differences between a younger set of consumers and
older generations do not stop at the travel industry. In terms of
compared to other generations? shopping aspirations also, Millennial Globe Shoppers display
distinctive characteristics. Regarding luxury shopping products
Sébastien Manceau: first of all, our data show that Millennials prioritise leather
goods and accessories over fashion garments. If anything, it
In few sectors have Millennials had more impact than in travel suggests that they first access to luxury through the purchase
and tourism. Their expectations and behavior are significantly of a staple designer bag, probably because these items are
different from their parents’ and older generations’. more heavily branded and identifiable than clothes. In terms of
Their whole travel journey has changed, from the initial shopping location also, their search for convenience, smooth
inspiration phase to the actual travel and holiday experience. shopping experience and additional services drives them
The importance of social media as influencer on the choice of towards department stores more frequently than other any
holiday for example, the quest for authentic holiday experiences other generation.
and off-beaten track adventures, the demand for personalized
services, their awareness of security threats…. Changes are Budget wise, at 3,000€, if Millennials’ spending is below
happening along the entire value chain. average (3,300€), it is still in line with their parents’ and highly
promising for the luxury industry when the entire group will
Millennials are changing the way industries used to function, have reached its earning peak.
mainly because they are the first generation to handle
everything digitally. The travel and tourism industry has Even better is Millennials’ use of Tax Free Shopping (TFS). In
already undergone a massive digital transformation with offers 2017, they represented almost a third of all TFS transactions
like Booking.com and Airbnb being the new normal and the emitted in the world, an impressive +14% growth compared
expectations of Millennials are fueling further changes. to the year before. They have become the leading users of
TFS, far before baby boomers and the gen X. Jumping in on
But if Millennials have set a new (digital) standard, their Sébastien’s remark about their use of the digital, again, it is
requirements have spread to other generations and today, it is their absolute need for convenience which attracts them to
difficult to tell who is driving change in consumer behavior. digital TFS solutions. For brands, this new attitude towards
What is sure is that Millennials are bringing a huge momentum TFS has the potential to generate additional sales in store.
to the travel industry.
6
What is the impact of the Millennial traveller Other generations are permeable to the Millennial effect; they
have started to imitate their offsprings’ demands and likings.
on the tourism and retail industries? For the retail industry, this phenomenon is a great opportunity
to review its product design and retail model to address a wider
SM: scope of consumers.
Firstly, Millennials impacted the overall destination mix. They
have helped revive city trips as most of their expectations How can companies and organisations from the
towards holidays find an answer in a city environment. Some travel industry best adapt themselves to these
cities have cleverly adapted their marketing and offers to this
target group. On top of that, international companies such new consumers?
as WeWork or Regus offer global travellers solution to mix
leisure and business. This increasing “bleisure” trend helped SM:
cities take the lion’s share of tourism growth.
(Millennial) travellers are looking for new experiences,
Secondly, Millennials have forced historical travel players combining a new destination with unusual activities, where
to adapt their communication. While in many industries they authentically explore a city or a country and combine
Millennials are “only” seen as a communication target, travel getting to know locals and local customs with enjoying typical
and tourism players have deeply re-invented their model activities on site.
to correspond to Millennial expectations. For example, Serving these needs for new destinations, personalized trips and
AccorHotels is accelerating the digital transformation of the local activities will help appeal to the new consumers.
entire company, enriching its offering with the acquisition And it does not have to be stiff or in a formal way. In contrast,
of lifestyle hotels (e.g. Mamma Shelter), developing a new Millennial travellers feel at ease with a relaxed and informal
accommodation format (Jo&Joe) or setting up a Millennial hospitality style as long as the service is excellent, and they get
shadow cabinet to impact senior management decision making what they want.
process.
Last but not least, Millennials have set the ground for
new business models in previously non-existing markets. How can retail brands benefit from Millennial
Companies, such as Airbnb (with their accommodation and travellers’ expenditure when they shop abroad?
“Trips” offer), have been founded to serve needs initially
expressed by Millennials. Now these needs are becoming LD:
universal and Millennials do not necessarily represent a direct
business target anymore. For brands and retailers across the world, offering Globe
Shoppers innovative TFS solutions, digital especially, and
LD: services is a great incentive to stimulate Millennial tourists’
spending when they shop abroad. Global Blue’s portfolio
Millennials’ impact on the retail industry is unprecedented. includes digital solutions where Chinese tourists can receive
Their behavior has forced retailers to review their products, their VAT back instantly onto their Alipay or WeChat digital
pricings, services and the way they engage with them. wallet.
For brands, one of the greatest challenge is to provide a
differentiating retail offer to a volatile generation, accustomed In parallel, back in 2017, we launched Mobile Customer Care
to cross-border and offline/online shopping. (MCC), to bring real-time support to travellers. MCC relies on
a notification service where a series of personalized transaction-
The value they attribute to “experience” when shopping triggered emails and SMS are sent to Globe Shoppers’ phones
represents a great opportunity for retailers to win them over. to guide them from the initial TFS transaction all the way
In stores, these one-shot experiences take the shape of cultural through to confirmation of the refund payment. From July to
events, art installations, exclusive concerts at Selfridges in December 2017, we estimate that Millennials represented 40%
London or sports classes at Saks 5th Avenue, New York. of all MCC transactions.
Outside the stores, iconic brands have at heart to promote
their strong heritage by way of opening their own fashion We have also developed a suite of services targeting high
museum such as Prada in Milan, when invited to display spending shoppers. Spread across key European shopping
their own fashion archives such as Dior a few months back in capitals, our VIP lounges offer an exclusive experience in a
Paris’ Musée des Arts Décoratifs or when curating their own relaxing environment at the end of our customers’ spending
exhibition like Gucci in Chatsworth House, England. spree. Millennial Globe Shoppers were over-represented by
10% in the Milan lounge, which ties in well with their desire
Regarding products, much like when they travel off the for out of the ordinary experiences.
beaten-track on the lookout for extra-ordinary adventures
and encounters, Millennials apply this similar way of thinking More than ever, being able to offer in-store TFS solutions has
when shopping. Today, rarity is the new luxury. Several become a key leverage for brands wishing to make the most of
retailers have been quick to identify this trend. For example, Millennial Globe Shoppers’ increasing spending power.
British skateboard brand Palace has taken the road of a smaller
quantity of products manufactured in the bid to generate a
“must-have” sentiment. In parallel, collaborations between
Louis Vuitton and streetwear label Supreme for example create
a sense of urgency around these limited-edition products.
7
1 THE NEW GLOBE
TRAVELLER
Who is the Millennial traveller in
2018? What are they looking for
when they go abroad?
8
AANEW TRAVELLER
NEW TRAVELLER
M
illennial travellers display signif- And while older generations still consider nities for high-tech interactive experiences,
icantly different travel expecta- travelling to be a luxury, Millennials see it or simply as a way to capture moments,
tions and behaviours compared more as a necessity, becoming an integral through the omnipresent smartphone.
to other generations. From their favourite part of their lives. According to the Ameri-
travel destinations and preferred holiday can Society of Travel Agents, in 2016, Mil- Millennials are looking for new travel des-
activities, to the people they travel with lennials took 44% more holiday time and tinations and extraordinary activities that
and how they choose to spend their mon- trips than the average Baby Boomer. They give their holiday a unique feel. They still
ey, Millennial differences can be observed are now the fastest growing demographic visit the top sights of a city, but get to know
along the whole travel value chain. How- for the international travel market, rep- destinations by mingling with the locals in
ever, considering their large numbers and resenting around 20%, reports the World bars and restaurants, to ensure an authentic
the multitude of nationalities they include, Youth Student and Educational Travel experience.
it would be naïve to think there is only one Confederation.
type of Millennial traveller. This group has For this generation, sharing snaps of expe-
varied demands that are fuelling the trans- Travelling is no longer seen as an indul- riences on social media preserves precious
formation of the travel industry. Due to gence, but a great opportunity to develop memories as well as nourishing their care-
their spending power, as well as their influ- life and work skills. For the Millennial, ex- fully curated online identity. Instagram,
ence on surrounding generations, Millenni- perience is the new social currency. Facebook, Snapchat and WeChat are also
als clearly deserve the full attention of retail becoming key influencers on how and
and travel industry stakeholders. So, what For Millennials, the quest for new experi- where to travel. Rather than relying on tra-
are the key facts, preferences and needs of ences is a fundamental desire which can be ditional sources of information, social me-
this generation? observed across all moments of life, not only dia is shaping Millennials’ decision-making
when travelling but also when shopping process, often led by one question: “how
or eating. The fast-paced, digitised world “Instagrammable” will my holiday be?”.
Who are Millennials? serves this need well, by creating opportu-
Millennials, also referred to as Generation
Y, are the demographic group following
Generation X. Typically, demographers
consider Millennials to have been born be-
tween the early 1980s and the mid-1990s.
In 2018, this generation is aged between 18
and 34 years old.
According to WYSE and UNWTO fore-
casts, there will be 370 million youth trav-
ellers by 2020, spending over USD 400
billion. Around three-fifths of the world’s
Millennials are from Asia, with a third of
these coming from India and China, while
US Millennials are the country’s largest de-
mographic group.
Travelling: a seismic generational
shift?
Young people have different life priorities
compared to their parents. While previous
generations focused on acquiring their own
house and car, many Millennials are reject-
ing these traditional achievements, placing
a much higher importance on intangible,
life-enriching moments, such as travel.
9
Show me the money
Millennials have not yet reached their peak
earning period, meaning their budget is not
as ample as older generations. But it does
not mean they are more frugal. Instead,
they are strategic in the way they book their
flights, accommodations or activities, to get
the most value for money.
With the commoditisation of travel, it has
never been cheaper or easier to go abroad,
thanks to the rise of digital services from
Online Travel Agencies (OTA), tour op-
erators, hotel chains and accommodation
booking giants. To satisfy their need for
convenience, quality and value, Millennials
have developed strong online tracking skills.
According to Expedia, “convenience” ranks
as the highest driver for booking through
an OTA, at 23%, while being “cheaper”
follows at 16%. Most notably, “security rea-
sons” still drive 9% of OTA bookings.
Crusoe syndrome
Current geopolitical unrest means Millen-
nials are highly sensitised to security threats. To comfort worried travellers, brands are rity app indicating the security level for a
This impacts their travel destinations and offering tech-enabled reassurance. In re- location based on information from Interpol
habits: according to Carlson Wagonlit sponse to the increasing number of terrorist and the UN, as well as local users.
Travel, 29% of Millennial travellers have attacks, Facebook has launched the “Crisis With these worries, it’s no wonder that only
cancelled a trip for security reasons, com- Response” function to get information on 7% of Millennials travel alone. Half of them
pared with only 12% of Baby Boomers. nearby terrorist attacks with the possibil- enjoy travelling with their family, while
ity to activate a “safety check” answer to 42% go away with their partner or 37%
reassure family and friends when abroad. with their friends, according to Expedia.
Meanwhile, GeoSure is a personalised secu-
BLEISURE: WORKING OR LEISURE?
Bleisure is an attitude that blends business and
leisure. In travel terms, it means extending a
business trip into a holiday, a growing trend that
is driven by Millennial workers. Enabled by the
digitisation of booking and communication, 77% of
Millennials aim to mix business and leisure travel,
compared to only 43% of Baby Boomers, according to
WWGY research.
A prime example of the bleisure mindset is the
strategic partnership between WeWork, the worlds’
largest co-working company, and Millennial favourite
Airbnb. The companies are offering a “WeWork Day Pass”
to Airbnb booked business accommodations.
10AA NEW
NEW OFFEROFFER
The traditional tourism model has changed.
New digital advancements are disrupting the
travel industry, forcing key players to adapt to “As critical consumers,
the new standards demanded by Millennials Millennials are looking
for authenticity, not
Destination Marketing Organisations: genuine stories about a destination is much
the first window to your destination, more credible than using photoshopped advertising lingo. ”
pictures with perfectly worded messag-
digitally es. Instead, DMOs can follow the crowd-
sourced content model, by engaging the
The traditional role of Destination Market- local community as tourism ambassadors are also the ideal method for DMOs to pro-
ing Organisations (DMO) is to promote — a great way to gather honest testimonials mote shareable moments, so popular with
their territory as an attractive tourism des- and develop storytelling around the desti- Millennials.
tination, bringing into the limelight the nation, both key components of a success-
best of their locality, be it accommodations, ful branding framework. For visitors, it also
transport networks, events, festivals or oth- generates a more personal and sentimental
Online Travel Agencies: embracing
er attractions. The digital world is creating attachment to the destination. digital experiences
both upheaval and opportunities, leading
many organisations to rethink their role Here, the medium of communication is as Millennials are known to be savvy travellers,
within the travel industry ecosystem. important as the message it is sending. Bro- looking for the best value, optimising con-
chures and visitor guides are less relevant venience and doing in-depth research when
Millennial travellers are gravitating towards when promoting a destination to digitally planning their holiday. Cost and value re-
more authentic experiences when holiday- savvy globe travellers such as Millennials. main key drivers when deciding on a des-
ing, and many don’t perceive the voice of Facebook, Instagram, Snapchat — there is a tination, especially with Millennials, who
DMOs to be relevant or genuine. As crit- plethora of digital and promotion-friendly may have smaller budgets than Gen X and
ical consumers, Millennials are looking for platforms to choose from, especially rele- Baby Boomers. They now have advanced
authenticity, not advertising lingo. Sharing vant to the image-led travel industry. They tech tools to aid their research, such as aug-
11mented (AR) and virtual reality (VR) expe- As well as offering excitement, AI and AR This has consequences for airline loyalty,
riences. Brands across the travel industry are can offer reassurance. These technologies where the airline’s brand is less important
using these immersive tools to support the offer a way to relinquish the stress and en- for Millennials than its flight prices.
curiosity of a more demanding customer hance the experience around booking a
eager to be better informed prior to book- holiday abroad, while ensuring travellers So where does this leave air companies?
ing an expensive trip abroad. are still in control of the itinerary. What opportunities can they leverage to
encourage air ticket purchases?
Artificial intelligence (AI) and digital tech-
nologies are reshaping the way travellers
Transport: show me the way! One way to capture their interest is be-
research and book their trip. Booking.com ing explored by Air France KLM, who
predicts that immersive experiences will Due to the success of price comparison launched “Millennial airline” Joon in De-
reach the next level in the coming years, and review websites with Millennials, the cember 2017. Joon introduced itself as “a
“with travellers looking for technology to commoditisation of air travel has led to an fashion brand, a rooftop bar, an entertain-
help better understand a destination or ac- industry-wide race to the bottom in terms ment channel, a personal assistant… and
commodation before they book”. of price, transforming loyal customers into also an airline.” Inside, cabin crew uniforms
bargain-hunters. On the same level, low- take inspiration from Millennials’ beloved
Hence, 29% of travellers confirm they are cost carriers such as Ryanair or easyJet are athletic leisurewear, while the bar serves
willing to let algorithms plan a trip based increasing their market share. smoothies and virtual reality entertainment
on their travel history. A further 50% said is available for business class travellers. Six
they did not mind speaking with a person Millennials have started destinations will be served in the first year
online or a virtual service as long as all their booking trends which of the launch — Barcelona, Berlin, Lisbon,
questions are answered. Surfing on the AR have quickly spread Porto, Fortaleza and the Seychelles — all
trend, Millennials will increasingly be able across the market. top of Millennials’ travel lists. Compared
to “try before they buy” thanks to VR pre- Consumers of all to Transavia, the low-cost offer from Air
views, while immersive glasses or helmets ages are now us- France KLM, which is also popular with
could be great incentives to promote excep- ing aggregator Millennials, Joon is a fresh offer which
tional destinations and experiences. These apps to find the takes inspiration from Millennials to
devices could help adventurous and less ex- cheapest op- serve the needs of travellers of all ages.
perienced travellers to discover uncharted tion possible.
territories and get off the beaten track.
12Accommodation reboot
The challenge for hospitality companies is
to address a multi-faceted consumer whose
travel perceptions and needs are constant-
ly changing. Millennial travellers can offer
a great source of inspiration for hoteliers
to renew their offer, going beyond simply
selling a place to sleep, to becoming all-en-
compassing experience platforms.
AccorHotels has done exactly that, by
launching a range of initiatives to cater to
the new target group, from involving Mil-
lennials in senior management decisions to
launching new brand Jo&Joe, and updating
the food & beverage offer. Likewise, Hilton
Garden Inn’s new hospitality strategy focus-
es on three pillars: product design, food and
beverage and guest service. In a bid to get
away from a standardised
hotel offer, the company
has launched six new pro-
totypes around the world, “Insider access is one of the ments, one of the greatest luxuries a hotel
can now provide for a traveller is insider
each with different rooms, access. Affluent travellers need to feel they
décor and menus to reflect
the local culture.
greatest luxuries a hotel can are in-the-know. The future challenge for
hoteliers will be to get away from the run-
The hospitality industry is
provide for a traveller” of-the-mill activities found in travel guides
and on OTA or DMO websites, so that they
also moving away from the can provide luxury thrill seekers with curat-
traditional, stiff approach to luxury accom- ty. Hoteliers around the world are adapt- ed and shareable first-hand experiences.
modation, with its formal communication ing their luxury service approach towards
style and service offer that no longer fits to- a more nuanced and personalised offer, so Technology is incrasingly part of the travel
day’s needs. The new goal is to treat guests they can address the full spectrum of guests experience, so it was only a matter of time
as individuals and provide a more down- they encounter today, Millennials included. before the smart home concept invaded the
to-earth hotel service by becoming more hospitality industry. From lighting, heating
informal, more relaxed and more personal While luxury used to be defined by refined, and voice control to sound and air condi-
— without neglecting the service quali- highly polished experiences and environ- tioning devices , automation systems are be-
coming mainstream conveniences in hotels,
as a way to make visitors’ lives easier. Hilton
is currently working on tying its Hilton
Honors app to room controls and entertain-
ment, aware that well-considered room en-
tertainment, content streaming on the TV
or a simple digital key can add great value
to a customers’ stay, especially to tech-savvy
Millennials. These smart hotel rooms an-
swer customers’ need for a more personal-
ised and enhanced hotel experience.
However, it is important that technology
does not replace guest interaction, but is
used to enhance guests’ hotel experience.
Such tech services have benefits for both
hotelier and guest: the qualitative and quan-
titative data collected can provide valuable
insights to maximise customer experience,
encourage repeat visits or even identify
cost-saving measures.
132 THE NEW GLOBE SHOPPER
Millennials are the most analysed,
most targeted and most vilified
generation ever. Why are they so
powerful, and how is their influence
affecting retail, luxury and other
consumers’ demands?
14MILLENNIALS
MILLENNIALS LEAD THE LEAD
WAY THE WAY
M
illennials are a market obses-
sion because they are the largest
generation in Western history,
the first generation to grow up with the
internet and smartphones, and a driving
force in international travel. These factors
make them hugely influential, not only in
terms of how they spend, but also the im-
pact of their preferences on service, pricing
and product. Their spending power is set
to grow considerably: according to UBS,
Millennial wealth could hit $24 trillion by
2020, approximately 1.5 times larger than
the value of US economy in 2015.
Millennials are more globally minded than
ever before, thanks to increasing levels of
international travel. The UNWTO reports
that the number of annual tourist arrivals
has doubled from 674m in 2000 to 1.3bn
in 2017, and is expected to reach 1.8bn by Experience classes and events, while sportswear brand
2030. Sweaty Betty’s London flagship also offers
Famously, Millennials value experiences fitness classes alongside its clothing.
Consumers are looking for foreign travel over things, an attitude that is having ma-
to expose them to new experiences, brands jor repercussions on the retail industry. But Meanwhile, bringing culture into store
and products. Expedia research found that how can retailers attract Millennials, when — in the form of music events and art in-
US, UK and Chinese consumers enjoy they are less interested in products than ex- stallations — finds favour with Millennial
travels which offer unique and cultural ex- periences? consumers. A master of retail experience,
periences. This extends to their shopping Selfridges runs a program of installations
behaviours: as more brands become availa- For many, it comes down to the experience and pop-up shops that tap into the zeitgeist
ble back home, it is essential that shopping around the product, with a growing num- and offer unique points of view. Events
abroad offers something different – some- ber of brands creating immersive events and range from the “bodega” store curated by
thing they cannot get at home. store environments, but for others the focus hip-hop star A$AP Rocky, to the Radical
is about creating a valuable experience first, Luxury concept, which explores new fron-
and promoting the brand second. Iconic tiers in luxury, and the recent Astrolounge,
Price vs. quality brands are emphasising their unique prod- which keyed into Millennials’ interest in all
ucts, heritage and quality by creating exhi- things mystical.
The value equation is clear for Millenni- bitions and even museums devoted to their
al consumers, as they consider price and creations.
quality to be equally important. It’s a tough Drop culture
expectation for retailers to meet, so brands Gucci recently sponsored and curated an
are trying different methods to demonstrate exhibition at the historic Chatsworth House Millennial demand for unique products and
both factors. in England, while museums have hosted experiences is driving “drop culture” — lim-
exhibitions devoted to brands ranging from ited edition, much-hyped products and col-
For example, Louis Vuitton focuses on em- Comme des Garçons and Azzedine Alaia laborations that are only available for a short
phasising the quality of its products by in- to Dior and Balenciaga. Saint Laurent has time or in a particular location. Streetwear
troducing “journées particulières”, an initia- gone one step further by opening a Par- brands such as Palace and Supreme, which
tive where consumers can meet and observe is museum showcasing different eras of its only produce goods in small quantities, are
the artisans making the brand’s famous bags. iconic fashion. key proponents of drop culture, and Su-
Other brands are exploring the price angle, preme has collaborated with leading luxury
with labels as diverse as Longchamp and Brands can also introduce experience into brands such as Rimowa and Louis Vuitton
Off-White introducing items and collec- the retail environment by playing on Mil- to create even more sought-after products.
tions with lower entry prices, while others lennials’ key interests in store. Wellbeing is Likewise, collaborations between designers
have launched accessories that offer afforda- important for this generation, and depart- and sportswear brands, such as Off-White
ble luxury, like Fendi’s furry bag charms. ment stores such as Saks 5th Avenue and and Riccardo Tisci’s collections for Nike,
Debenhams are introducing in-store fitness and H&M’s popular designer collections,
15create a sense of occasion and urgency
around products, which many Millennials
find irresistible. These collaborations are
key to attracting the attention of younger
consumers, enabling brands to profit from
increased brand awareness, and even a cool
new edge.
Redefining luxury
As the leading force in the luxury market,
Millennials are redefining what luxury
means. Not only are they changing the way
luxury goods are being purchased, they are
also challenging what luxury means.
Since many young people consider luxu-
ry to be a feeling, rather than a category,
they are finding a sense of luxury in unusu-
al places. They are no longer relying solely
on famous international luxury brands to
provide a sense of luxury, but looking to
limited-edition, bespoke and sustainable
products too, or those which have a strong
personal value. For Millennials, exclusivity
is now about the rarity of the experience.
With this mindset, Millennials are shifting
the luxury product mix into a more casual
realm, turning away from formal dressing
towards low-key pieces such as t-shirts and
sneakers. Many brands have been quick to
GENERATION NEXT
Millennials may be the biggest generation current-
ly living, but they’re not the only focus for brands
and retailers, and as Millennials begin to move into
their late 30s, attention is turning to their suc-
cessors, Generation Z. Born between the mid-90s and
2010, Gen Z will account for 33% of the global popu-
lation by 2020. They exhibit many similar character-
istics to Millennials – the pursuit of experience,
savvy shopping behaviours and a need for uniqueness –
but they also have distinct preferences of their own,
which retailers need to prepare for now.
Growing up with devices in their hands, Gen Z ex-
pect fast, seamless and smart digital services, with
research by the IBM Institute of Business Value and
the National Retail Federation stating that 60% of
Gen Z will not use an app or website that is too slow
to load. The research also found that Gen Z place a
premium on quality, which is the deciding factor for
66% of their decisions, and on product availability,
as 66% want very few products to ever be out of stock
– an especially important consideration when search-
ing for sought-after brands and products abroad.
They also expect even more interaction with brands
than Millennials and they’re also much more influenced
by social media stars than conventional celebrities,
according to Google, as they value word-of-mouth mar-
keting and relatable spokespeople.
16recognise this shift, introducing more lines We’re all Millennials now tion products, niche brands and experien-
influenced by street- and sports-wear, such tial environments. Millennials’ demand for
as Balenciaga’s down jackets, Louis Vuit- Millennials are increasingly impacting high-value products is pushing many brands
ton’s chunky sneakers and Dior’s slogan how other consumers behave, what’s being to improve the quality and sustainability of
t-shirts. called a “Millennialisation” of the market. their products, while keeping prices fair.
Their demand for unique products and
Millennials’ easy-going approach to luxury engaging experiences has made shopping Whatever the target market of a brand, it
is also leading to another major shift for the more transparent, more efficient and ex- is important for brands and retailers to un-
industry – the rejection of head-to-toe lux- citing for consumers of all ages. Millennials derstand the needs of Millennials, not only
ury dressing. Millennials are keen on mix- are not only transforming their own shop- due to their size and purchasing power, but
ing their luxury labels with niche brands, ping behaviours but those of their parents, to meet the growing needs of consumers of
premium labels and even mass-market as they become more tech-savvy. all ages.
brands, so they can reflect their own style
rather than that of a major brand. This “Millennial state of mind” is perme-
ating product design, services and stores,
Luxury brands that are able to tap into Mil- as Boomers and Generations X and Z also
lennials’ needs are already seeing the ben- benefit from Millennials’ preference for
efit, with Kering chairman Francois-Henri youthful fashion, seamless online/offline
Pinault stating that 50% of the sales of its services, and stores that offer limited-edi-
booming Gucci brand come from Millen-
nials, while the turnaround at Saint Laurent
has been boosted by increasing its customer
base to 65% Millennial.
17CITY FOCUS
CITY FOCUS
T
ravellers’ love affair with French This is a trend prevalent amongst Chinese
high fashion remains unabated as Millennials in particular. This group wants
the Fashion and Clothing catego- to find the ultimate ‘cool’ French souvenir;
ry accounts for 30% of Millennials’ spend a product from Paris that they cannot find
in Paris. And, with high average spends of anywhere else and that displays this senti-
€22,000 (Elite shoppers*) and €1,800 (Fre- ment in a unique and fashion-forward way.
quent shoppers*) amongst Paris’s Millennial
Globe Shoppers annually, this is an undeni- Several local brands have understood and
ably important demographic for the city’s capitalised on this demand; for example,
fashion brands. Chanel Beauty launched its latest range ex-
clusively in Paris, a month before any other
store in the world, giving visiting Chinese
“Savoir faire” versus “à la mode” Millennials the opportunity to be one step
ahead of trends. Another example is offered
While its heritage fashion brands have made by the much-loved concept store, Merci,
the city famous, Millennials are demanding whose “Merci”-engraved bracelet has be-
a more contemporary Parisian experience, come an icon, resulting in queues of young
forcing brands, both new and legendary, to Chinese travellers looking to secure their
continuously reinvent their offering. Parisian keepsake at the store.
Indeed, recent Fashion Weeks in Paris have
seen many of France’s landmark labels pre- Retaining the fashion capital crown
senting designs that speak directly to the
Millennial market, from eye-catching ac- While Paris’s luxury brand heritage is a
cessories to mix and match looks. draw for fashion-fluent travelling Millenni-
als, the message is clear: to keep this savvy
Beyond the catwalk, Paris’s historical luxu- and experimental market enticed, Parisian
ry maisons, famous for their “savoir faire”, brands need to continuously update their
still attract Millennials thanks to their high offering. But as brand heritage is no longer
quality. However, the quest to discover the the only concern for Millennials, the focus
‘soul’ of the Parisian shopping scene is om- should shift to offering unique and inter-
nipresent, as Millennials seek an authentic esting products, which can be showcased
experience they can share, or a unique sou- through social media, or released in exclu-
venir they can show off. sive “drops”.
* Frequent shoppers: shoppers who have done more than 3 trips in the last 24 months
Elite shoppers: shoppers who have spent more than €40,000 over the last 24 months
18NEW RETAIL
NEW RETAIL
Millennials have not only strongly impacted the travel industry, they are also fuelling
changes in the retail industry. A new wave of retail innovations is being launched
that serves convenience, excitement and exclusivity.
Changing landscape Phygital retail around AR is leading consumers to demand
added-value interactions in store. Hence,
While there is much discussion of Physical and digital retail are blending into Digi-Capital forecasts that there will be
Millennials driving online shopping, they “phygital”, uniting the best of online and 900 million AR-enabled smartphones in
are still keen on the in-store experience. offline shopping in the store environment. circulation by the end of 2018, rising to 3.5
The majority of Millennials visit billion by 2022.
a physical store at some point in
their path to purchase, whether
to research new products, check
“Augmented reality is emerging Many retailers have developed
AR apps to help consumers
out how items feel in real life, or
to make a purchase. It just has to
as a technology that is both picture their products in their
homes — like the Ikea Place
be an enjoyable and convenient
experience. useful and exciting as it adds app, which allows users to see
how products might look in
their home — and on their
While they are in-store, extra layers of information and faces — like L’Oreal’s Make-up
Millennials are harnessing Genius app. It’s also proving
technology to make payments
and to make product comparison
entertainment to the real world.” popular in store environments,
to help consumers choose and
easier. Brands such as Farfetch and personalise products.
Tencent have unveiled ideas for the “store Augmented reality (AR), geolocation and
of the future”, full of Artificial Intelligence smart personalisation are all being employed Zara is rolling out AR displays in 120 stores
(AI), magic mirrors and virtual reality: to capture Millennials’ interest in-store, and around the world, to attract Millennials
this technology can offer opportunities make the shopping experience seamless. inside. By holding up a smartphone to a
to capture valuable shopping behaviour sensor in store, shoppers can watch models
data, but for customers, technology is only AR is emerging as a technology that is wearing key looks and click through to buy.
useful when it makes shopping easier and both useful and exciting for consumers, Nike is employing AR to help consumers
replicates the best of online shopping in as it adds extra layers of information and create personalised trainer designs, through
bricks-and-mortar spaces. entertainment to the real world. The buzz the Nike Makers’ Experience. At the Nike
19By You studio, visitors can choose images, Luxury department store Nordstrom takes Taste makers
colours and trims to create their shoe, which the idea even further with its new local
can then be projected onto a blank shoe to concept store in LA, which carries no Making stores that are welcoming,
help users refine and envision their designs. inventory at all. Customers go online to memorable and unique is key to capturing
Mark Smith, Vice-President of Innovation book a session with a personal stylist, who Millennials’ interest — and their spend.
Special Projects at Nike said, “The Nike will order in clothes for their specific needs. One approach proving popular with food-
Makers’ Experience is a fast, fun, interactive, The 3,000-square-foot space has only a obsessed Millennials is the introduction
one-of-a-kind design experience. It takes meeting space, styling room, and 8 dressing of foodie spaces into fashion and lifestyle
most people longer to come up with their rooms. stores. Luxury brands have been pioneers in
idea than it does for us to make it. In our creating chic eateries that allow fashion fans
minds, this is tomorrow, today.” to discover what their favourite brands taste
like. Ralph Lauren has introduced
Online/offline “The future of retail is multi- Ralph’s Coffee bar, a Manhattan-
style deli, into its New York and
faceted, leveraging technology
London stores, while Gucci has
Click-and-collect is proving to be created a fine dining restaurant in
one of the simplest –— and most its new Florence outpost, Gucci
effective — methods of blending
online and offline shopping. Part
as well as localism, exclusivity, Garden, and Tiffany & Co has
opened the Blue Box Café at its
of the appeal of click-and-collect
is its combination of the choice of
brand immersion and home- New York flagship.
online shopping, with the ability
to get your goods whenever and like experiences.”. A tasteful blend of food and fashion
is proving particularly popular with
wherever you want. Asian Millennials, as food and drink
continues to drive mall visits across Asia, as
Retailers are now adapting the method in And while technology is key to the retail well as in Europe and the US. Chanel has
new ways. Hip US eco-brand Reformation landscape - just as it is to consumers’ lives created a pop-up concept called Coco’s
only offers the top 20% of its products on – it is not the only factor changing the Café, where shoppers can try out new
the shop floor, but shoppers can check shopping experience. The future of retail is beauty products with a complimentary
out the full product range on touchscreen more multi-faceted, leveraging technology drink. The shop/café hybrid has so far
mirrors, and order product in their size as well as localism, exclusivity, brand appeared in Hong Kong and Singapore.
directly to the fitting room. immersion and home-like experiences. Key luxury brands are also creating café
concepts exclusively for their Chinese
20stores, with Vivienne Westwood running together at 86 Champs, where patissier recently launched its Residence concept, a
a Shanghai café and Mercedes opening a Pierre Hermé and beauty brand L’Occitane fully furnished apartment where consumers
space in its Beijing showroom where local have collaborated on a 10,000 sq ft lifestyle could book a night, just like in a hotel,
restaurants can showcase their skills. store that includes wellbeing products, to test out appliances, mattresses, home
a terrace restaurant, in-store perfumery, entertainment tech and furniture.
Niche brands are also bringing food into coffee, cocktail and macaron bar.
their stores to allow shoppers to fully In Paris and New York, womenswear
immerse themselves in the brand. The new brand Sezane’s L’Appartement stores aim
Marais store for beauty retailer Buly 1803 Apartment stores to immerse shoppers in the brand, through
houses skincare and make-up products as plush seating, a screening room, café and
well as a café and Japanese bakery, while In their effort to make stores more library, while the personal shopping area for
dinners at the café of New York lifestyle welcoming to Millennials, retailers are online trunk sale retailer Moda Operandi is
store Guild receive a card that details all of creating multifunctional concepts that feel a classic New York townhouse, filled with
the dinnerware and cutlery used in their like home and offer an indulgent way for refined furnishings and selective products.
meal, and where it can be found in store. consumers to interact with products.
Meanwhile, two French icons have come British department store John Lewis
INTERVIEW WITH GUILLAUME DE ROQUEFEUIL,
EUROPASS FOUNDER & CEO
In 2 years, EuroPass has become a major player in the
European digital payment industry. Guillaume de Roquefeuil,
Founder & CEO of EuroPass, explains this success.
What motivated the launch of EuroPass? How are brands and institutions responding to this
The creation of EuroPass came with the realisation that upon
new technology in Europe?
arriving in Europe, Chinese travellers were not able to use We-
Chat, their digital wallet WeChat Pay, WeChat Moments and In France, we really noticed a difference in brands’ interest in
the numerous other services and functions within the platform. our solution during the second half of 2017. Merchants and
For brands, it caused a major communication gap with their institutions are attracted by EuroPass because we provide an
clients, who they usally target through marketing banners, ge- all-in-one solution mixing digital payment and marketing ca-
olocation adverts and drive-to-store notifications in China. pacities alongside geolocation facilities that send relevant drive-
to-store incentives to Globe Shoppers’ mobile phones.
It was obvious there was room to innovate and propose a solu-
tion benefiting both retailers and travellers in Europe. Europass In addition, thanks to EuroPass, Chinese customers may flash
also allows us to work with other stakeholders in the travel ex- and share the QR code of a brand they have spotted locally.
perience, such as railway companies, tour operators and muse- This is another way for local brands and international mer-
ums, to develop solutions that can engage with travelling Chi- chants alike to benefit from the social media platform and surf
nese Globe Shoppers in a more strategic way. the brand advocacy trend.
How is EuroPass changing the retail and tourism Can you tell us more about upcoming developments
landscape in Europe? and projects for EuroPass?
In Europe, we support brands with their digital communication EuroPass has successfully created a Chinese digital ecosystem
and payment solutions. We set up marketing and communica- in Europe. Our recent collaboration with Global Blue has
tion strategies targeting Chinese Free Independent Travellers strengthened our position in France and we are already work-
(FITs) or create brand-certified WeChat accounts in Europe. ing with over 100 clients from the retail and tourism industries
For passing tourists, it means they no longer have to download across the country.
the brand’s local app, but simply log into WeChat and look for
the brand’s account, just like they would back in China. We are also developing other shopping - and travel-friendly
solutions and multiplying our partnerships with the retail and
We also offer an online and in-store mobile payment solution travel industry. In parallel, we are looking to extend our ge-
by handling all transactions to allow brands to accept payments ographic footprint across Europe, beginning with the United
in yuan while collecting the payment in their local currency, Kingdom, Spain and Italy, followed by Germany and Switzer-
without being subject to banking commissions. land.
21NEW CONNECTIONS
NEW CONNECTIONS
Brands are connecting with savvy consumers by satisfying their needs for exciting
and enlightening experiences, as well as their demands for exclusive access and
personal advice. The best ways to engage with Millennials offer a combination of
smart digital tools and in-person interactions.
Spheres of influence Leandra Medine and Mr Bags have used this
power to their own benefit and have built Particularly popular in China, livestreaming
Undoubtedly, one of the biggest stories in their own fashion empires, as well as collab- allows an all-access view of retail events,
the fashion and lifestyle industries in recent orating with major brands to create special where consumers can buy directly from the
years is the shift in power from professional collections. stream. Retailers and influencers livestream
opinion leaders such as fashion editors and key events direct to their followers, with
retailers, to social media stars and self-ap- The power of influencers has become so links to the products featured in the stream,
pointed influencers. great that brands are now collaborating so viewers can immediately buy anything
with virtual influencers too, such as Lil Mi- they like.
Their power comes from Millennials’ trust quela, a computer-generated model with
of personal recommendations over brand almost a million followers on Instagram. According to a 2017 report by China Inter-
advertising. This makes recommendations Miquela has modelled for leading make-up net Network Information Center, 47% of
on social media such as WeChat, Instagram, artist Pat McGrath and influential magazine China’s internet users (344m people) have
Snapchat and blogs more powerful influ- Interview, as well as featuring in Prada’s lat- watched a livestream. Key platforms in-
ences on consumers’ shopping choices. est digital campaign. clude Tmall, Taobao, Meipai and Yizhibo.
According to research by L2, 69% of glob-
The lifestyles and preferences of popular so- al beauty brands have used a livestreaming
cial media figures, known as influencers or
Exclusive for everyone platform in China, with Maybelline selling
KOLs (Key Opinion Leaders), are becom- 10,000 lipsticks during a 2-hour livestream
ing increasingly influential and are driving Consumers have become used to gaining hosted by KOL Angelababy.
significant traffic to stores, niche brands and access to products and environments pre-
limited-edition collections. viously reserved only for the elite, thanks ShopShops is a platform connecting US re-
to live catwalk show streaming and be- tailers to Chinese shoppers by livestreaming
Many brands are now harnessing the power hind-the-scenes Snapchat Stories from their events from American stores for 2-3 hours.
of influencer recommendations by inviting favourite influencers and brands. Now, The platform reports an average of 15,000
them to appear in their catwalk shows, ad brands are finding new ways to offer ex- viewers and $8,000 in sales per event, with
campaigns and even co-create products clusive glimpses of hyped-up products and as many as 160,000 viewers for special
with them. KOLs such as Chiara Ferragni, events through livestreaming. showcase events.
22Brand immersion other inspiring places. The feature allows and learn in a way you haven’t been able to
fans of the brand to immerse themselves before. It’s also a place where we can build
As well as experiencing brands through in the inspirations and lifestyle of Gucci, as a far more personal relationship with our
trusted influencers and livestreams, con- well as serving as a chic travel guide. customers”.
sumers are increasingly willing to jump into
the world of a brand, if it means adventure,
excitement and discovery. Now, leading
Building relationships Selling service
brands are creating tools and experiences
that allow consumers to get inside their fa- Augmented experiences, brand immersions, An important way to build relationships
vourite brands. influencers and KOLs are all in the service with Millennial consumers is to offer es-
of creating a deeper relationship between sential support and seamless service. Main-
Footwear brand Converse recently created a consumers and brands. Knowledge-sharing, tenance and repairs are essential services to
London pop-up hotel to immerse consum- advice and support are becoming another offer consumers, especially for high-cost
ers in the culture surrounding the brand. key way to build stronger connections with products, or those particularly prone to
The One Star Hotel featured rooms curated consumers. wear and tear, such as luggage. At its Paris
by different artists, as well as performances flagship store, luggage brand Rimowa has
from new musicians such as Princess Nokia, “Shop, do and learn” is the founding princi- introduced a repair shop where customers
IAMDDB and Skinny Macho, and exclu- ple of British department store John Lewis’s can have suitcases fixed for free, regardless
sive product offerings. new 230,000-square-foot store in London. of when they were originally bought.
As well as the retailer’s famously knowl-
Gucci is another brand focused on creat- edgeable staff, the store includes a Discov- Hermès has turned laundry into a chic expe-
ing an interesting life for its customers and ery Room where shoppers can learn how rience, with the introduction of its pop-up
fans. Its app features exclusive artwork from to perfectly light a room or integrate smart laundromats. Owners of the brand’s icon-
Gucci collaborators such as Coco Capitan home technology, as well as beauty and ic silk scarves can drop off their cherished
and Gucci Ghost, as well as its Gucci Places cookery demonstrations around the store accessories to be professionally cleaned and
feature, which highlights buildings, stores and a Style Studio for individual or group re-dyed, with advice from Hermès-trained
and institutions that have influenced Guc- fashion consultations. colour specialists. Even less delicate items
ci’s collections. Gucci Places currently rec- need expert maintenance: Dutch brand
ommends Castello Sonnino castle in Rome, Paula Nickolds, Managing Director of John Denham has created a denim maintenance
bookshop Maison Assouline in London, the Lewis said, “This shop demonstrates our lat- shop in its Tokyo store, where owners can
Los Angeles County Museum of Art and est thinking on how the department store see their favourite jeans be altered, mended
the Bibo restaurant in Hong Kong, among can be a place in which you can shop, do and laundered by denim experts.
233 THE NEW GLOBE EXPERIENCER 24
GOING GLOCAL
GOING GLOCAL
Millennial travellers are pushing back the frontiers of the travel industry, as they
look for ways to get under the skin of their destination.
The travel industry is starting to get The app also includes
used to the idea that pre-planned
holiday tours no longer attract the
the “Meetups” function
where Airbnb users can
“Today, Millennial travellers
crowds. Today, Millennial travellers
are looking for the authentic, un-
meet each other, and
“Nearby Now” to re-
are looking for the authentic,
discovered and fascinating reality of
their destination. There has been a
ceive community-cu-
rated information and
undiscovered and fascinating
shift from travellers just talking about advice. reality of their destination.”
what they saw or did to who they
met on location, as they’ve realised Airbnb fully embraces
local insights make for deeper, more this generational shift
unique experiences. But while expe- currently reshaping the
rience is a key driver of Millennial travel industry, where travellers feel Bringing back meaning to travelling
travel, how is this trend developing? less like tourists but more like locals.
Millennial travellers express a strong
Millennial travellers: feeling more than It suggests a more personal approach desire to connect with their destina-
to travelling, away from standard- tion’s community. The challenge to-
just tourists ised tourist tour packages and guide- day lies in bringing back meaning to
Millennials are out to experience books.
cities’ multi-layered qualities just
like locals, be it the food and culture
scene, the local craftmanship or the
best sightseeing spots and parks.
Back in 2016, home-sharing giant
Airbnb launched “Live There”, its
largest communication campaign to
date, as a way to help travellers feel
like locals, “in response to the grow-
ing dissatisfaction and disappoint-
ment with standardised tourist offer-
ings that have become the hallmark
of modern tourism”. Along with this
campaign, the company introduced
peer-to-peer platform “Places”. The
concept relies on locals’ tips, gathered
into highly curated “Guidebooks”, a
collection of recommendations for
the best places to visit in every city,
as seen by Airbnb hosts. Recommen-
dations include getting your morn-
ing pastry at Tartine Bakery in San
Francisco, going for an afternoon
walk on London’s Hampstead Heath,
siping cocktails in Amsterdam’s Bar
Bukowski and enjoying a candlelit
dinner in Rio de Janeiro’s Zazá Bistrô
Tropical.
25You can also read
