We’ve all heard the news. USA Today reported last week that Payless , the global shoe retailer, is closing all 2,100 stores in the U.S. and Puerto Rico by May of 2019. Their e-commerce division will be dissolving as well. An official estimate of the number of jobs that will be lost has not been released yet, however, after retailers like Gymboree, Charlotte Russe, KMart, HHGregg, seem to be experiencing a similar fate, it begs to question, is this the result of an economic crisis or the changing landscape of retail here in America? Probably both, but I also have another theory.
Retailers Are Ignoring Millennials
I think we’re missing a key component of the discussion: millennials. With almost 80 million millennials in the U.S., Payless couldn’t find enough of them to buy shoes? Something’s not right. First, only 11%
of millennials actually purchase items in an actual brick-and-mortar store. So I can see why their physical stores may have been struggling, but wait, doesn’t Payless have an online shopping option? They do. Hmm, so what’s the deal? I believe that traditional retailers are ignoring the largest generation in the workforce, millennials. They’re getting older, having kids, settling down and when it comes to where they’re going to spend their money, millennials are very particular. That doesn’t mean, however, that stores can’t do more to attract and retain millennial customers. Payless is in the news right now, but I’ve handpicked some other brands who I predict will have the same fate sooner rather than later.Related: Why Killing Performance Reviews Was a Mistake
Predictions: Millennials Will Kill These Brands Next
I researched some notable brands that have tanked over the last few years and I think that part of their challenge has been staying relevant to millennial consumers. Here are my predictions (none based on hard data or empirical research) for the brands that will die within the next 5 years if they don’t think fast about how to remain relevant to millennial consumers. Macy’s- Why not just become a discount retailer? The amount of money being spent on t.v. commercials to tell us that there’s another sale “this weekend” is a waste. I’m annoyed at Macy’s before I even step in the store. Their marketing is hurting them. Lenscrafters- This retailer has horrible employee reviews on Glassdoor. That’s typically the first sign that the leadership of an organization is out of touch with the needs of the company. I don’t think they’ll be around much longer. Office Depot/OfficeMax- Staples may last a few years longer, but for Office Depot/Max, I’d rather go to Walmart to grab supplies than subject myself to the extreme lack of customer service their employees provide. Best Buy- Again, their model is best for consumers who aren’t tech savvy. Millennials don’t need a sales associate to walk them over to the Mac Notebooks. GenXers and baby boomers can now get their children and grandchildren to buy their electronics online, so they’ll be obsolete soon enough. Their customer service is horrible as well.
Top 3 Things Retailers Can do to “Millennial-ize” Their Brand Provide an Engaging Customer Experience-
Retailers don’t have to be on Disneyland level, but they do need to create a purposeful and consistent in-store experience. Each of the retailers mentioned above have failed to create a customer experience that makes millennials want to return over and over again. You walk into most Office Depots and it’ll take you 5 minutes to find an employee. Macy’s departments are disorganized and sloppy. You’ll never know how long you’ll have to wait to see an optician at Lenscrafters. They’ll ask you to aimlessly browse frames until they’re ready to see you. Millennials aren’t putting up with a lackluster buying experience. So, who gets it right? Target is a great example. It doesn’t matter what state you’re in. When you go to a Target store, the layouts are similar, the store is clean, the products are beautifully merchandised. You can tell that Target is very clear about who their base/target customer is. Everyone can shop there, but they’re taking time to design a shopping experience for their core patron first. I think Payless, Best Buy and others have failed to narrow down that customer avatar, and it’s showing.Related: The Inconvenient Truth About Corporate Layoffs Require Stellar Customer Service-
Customer service is a part of what attracts return customers. Millennials won’t stay at a company that mistreats them, and they surely won’t spend their money at a store that mistreats them. I think the most significant issue that retailers face is the consistency of their customer service. One day you have a great experience, and the next day you’re ready to strangle a sales rep. That’s unacceptable. The issue here is a lack of adequate training for employees. Typically, retail employees are considered “low-wage workers”. They usually work more than one job, are seasonal, or are only working at a retailer temporarily until they find a job with more opportunities for growth. Leaders within these companies are usually reluctant to invest in training and development for these reasons. I completely disagree. The goal is to make sure that all customers have a welcoming experience by any means necessary. If that means paying for customer service training for employees who may not be present a year from now, so be it. It’s like insurance for your brand. Companies try to outspend their lack of training with marketing dollars and it NEVER works. You’ll get people in the door, but they won’t come back after one visit if the customer service isn’t stellar. Who gets it right? Chick-fil-A. They have the most consistent customer service. They have Summer team members and seasonal employees, they have part-timers who have other priorities and aren’t planning on building a long-term career within the company. The only differentiator that they have is their values. Chick-fil-A values ALL employees while they’re there. Retailers who are dying almost always have a customer appreciation issue. Innovate or Die-
My gosh! What does it take for a little innovation and creativity these days? Baby boomer leaders can sometimes be slow to adapt and change, and it shows with some of these brands. For example, Office Depot/Max should turn their stores into mini co-working spaces so that people from the community can work on their businesses while shopping for office supplies and making copies. Lenscrafters should set up digital kiosks that take customers’ pictures so they can digitally try on frames. Best Buy should turn the different areas of their stores into more experiential experiences like Ikea does. So instead of TV’s on the wall, have an in-store man cave or living room, instead of the random computer aisle turn it into a dorm room or mock office. As for Macy’s?….. They just need to shut down. Seriously, I got nothing for Macy’s.