Business advice: Generation game

Marketing consultant Hayley Simmons looks at why niching down in order to attract a greater share of the millennial market could pay dividends for retailers.

It’s been a tough few years for retail, and the general feeling in the KBB industry is that consumer demand is a challenge. Many small retailers are finding it harder to market themselves, express their point of difference and command a sufficient price premium.

Things will inevitably pick back up, but there’s more to be examined around consumer behaviour and the long-term opportunities for the independents when it comes to changing buyer demographics.

Here, I explore whether more small independent retailers should leverage their small size and adopt the strategic, albeit seemingly paradoxical, approach of attracting a wider, more generationally diverse audience by becoming more niche.

A large part of the early buying journey is now online and competition for a buyer’s attention is fierce. Our brains are continuously inundated with stimuli even when we’re not in shopping mode and thanks to clever algorithms, the more we browse online, the faster the options multiply before our eyes.

Overstimulated consumers 

This means we increasingly rely on visuals and short messages to stimulate interest. We have the time it takes to scroll the length of a phone screen to engage with an advert or a post.  

Zooming out a little, the Millennial generation is maturing and so is their spending power. GenZ customers will soon be entering this market too. ‘Brand’ is much more important to these groups than previous generations, which poses both an opportunity and a threat to business owners.

The growth of online KBB purchases shows us that the showroom experience is not as important to a growing proportion of the market. There are many exceptions, but a large proportion of showrooms try to appeal to all tastes with USPs often centred around full project management and a reliance on local reputation. 

Younger audiences don’t place the same value on local relationships in the way that older generations do, which will present a challenge to the large segment of the independent market that almost exclusively serves customers aged 50 to 75. These businesses have typically grown via ‘real life’ word of mouth and not the digital signalling that younger customers rely on.

The market’s perception is that independent retailers are more expensive than national ones. This means the value placed on face-to-face service must be very high to pull them in through the doors, creating the opportunity to sell.

I‘m not saying that service isn’t important, of course, it’s imperative and it must be part of the marketing story. On its own though, it will become harder to cut through the noise with the attitudes of the changing buying population.

In areas with a high density of retailers, should more independents niche down with their target audience and become the specialists among specialists, to give themselves an edge?

It’s easier to resonate with people when you focus on smaller groups. Being the very best business to a smaller group of customers, as opposed to a good one for many, could be the key to unlocking growth.   

Businesses can differentiate in several ways. Strong, considered branding is one. The impact that this has on consumers shouldn’t be underestimated.

If this branding also marries nicely with a signature design style, you have a business that has a strong ‘brand identity’. A strong identity means that you can quickly and impactfully describe what you do and who you are for. It’s the visual elevator pitch for today’s hijacked attention span.

Compelling story

There are retailers who are doing very well by only focusing on one style. Yes, they will be alienating part of the market, but it also positions them as the trusted experts in the eyes of the customers seeking that look. ‘Price’ and ‘purpose’ offer other ways to stand out. Offering a design solution in a more cost-effective or sustainable way are selling points that can create a compelling story. 

In the 2023 JKMR Overview Report on the UK Fitted Kitchen Market, reference is made to this shift in specialisation, with the prediction that; “Over the next decade, studios will shift their supplier relationships to a two-way brand ambassadorship, driven by the gradual loss of ‘Baby Boomers’ and the rise of Millennials in the client base, with a greater emphasis on products that reflect their own beliefs rather than solely a ‘quality’ or ‘heritage’ story.”

It seems that buyers have become harder to sell to as their values become more intangible. However, this is also an opportunity. By creating stronger reasons to buy that outweigh a showroom’s location, combined with the increasing acceptance of virtual buying, there’s opportunity for more retailers to scale beyond the typical geographical area into strong, specialist ‘micro-brands’.