By | Abhijit Bhaduri | Founder, Abhijit Bhaduri & Associates
Retail is experiencing a real churn. There are new competitors. New business models. New collaborations. The leadership roles in most companies are held by those who have years of experience. There was a time when experience was a good thing to have. Today? I am not always so sure.
It plays out like a Hitchcock movie. The sound of footsteps can be heard in the distance. The end is near. Your heart starts thumping to keep pace with the heavy footsteps. That is just what is happening in every industry. Amazon’s $13.7 billion purchase of Whole Foods will impact not just retail but many other adjoining industries. Retail has been reeling under the Amazon impact.
Retail-industry chief executives are consulting investment bankers to pitch takeover ideas aimed at fending off Amazon. Corporate deals hit a near-record $200 billion this month – much of it triggered by what Facebook, Amazon, Apple, Netflix & Google are doing. Just the thought that Amazon could enter the healthcare segment is sending shockwaves across. CVS could takeover Aetna to retain its foothold. Disney is looking to buy 21st Century Fox. Disney will stop streaming new content on Netflix.
Stop benchmarking your industry – that’s Analog thinking. In the Digital Tsunami, competition will NOT come from incumbents. Ask what would you do if you were <Facebook, Amazon, Apple, Netflix & Google>. That’s the answer.
Millennials love makeup and influencers
The New York Times wrote about the rise of Millennials & Influencers: <click here> There is a new trend among millennials. Always ready to click a selfie, they are buying almost 25% more cosmetics than they did just two years ago and significantly more than baby boomers, according to the research firm NPD. But NPD also sees the “millennials” (People between the ages of 18 and 34) as two distinct groups – older millennials and younger. Clearly 34 year olds are bound to be different from 18 year olds.
What makes them different? Younger millennials are spending tonnes of money buying makeup. They also spend hours applying it. Most of them use multiple products (upto six products). Younger Millennials devoted a greater share of spend to specialty beauty retailers compared to the total Gen Y population.
There are two other differences. Consider this
Kylie Jenner (@KylieJenner) runs Kylie Cosmetics. That company notched up more than $400 million in sales of cosmetics in the last 18 months. She spends very little on ads. Her sales come from the 99 million followers on her Instagram account. And did I mention that Kylie is 20 years old.
There are two things here that older leaders need to think of:
Visual content & channels
The media consuming habits of millennials is heavily tilted in favor of visual communication – but not every form of visuals matter. #Millennials get bored watching a 30 second commercial but can spend hours on YouTube video tutorials for make up. They spend hours on Instagram. Learning to communicate on Instagram (it has a different grammar, trust me) will be useful.
Millennials trust influencers
Millennials trust #influencers. And trust matters. Possibly some influencers are trusted more than brands. Influencers compare and rate brands that shapes choices for millions of followers. Brands are chasing influencers. How can influencers stay brand-neutral with the big bucks being offered? Will Direct To Consumer become the way to sell to millennials? Is this a new language to be learned by #brands, marketing people & communications professionals?
Love to know what you think. Leave your ideas and suggestions in the comments below. Thanks