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Retail is adapting to the digital preferences and habits of consumers

Image: Imagerymajestic; Freedigitalphotos.net

If you look at age demographics, there is an amazing stat: 50% of the world's population is under 30 years old! No one under 30 remembers typewriters and carbon paper, but they know what a carbon footprint is. More importantly, younger people tend to be "Digital Natives". The "Natives" have adopted a digital lifestyle and changed their shopping habits that are entirely different from those of us who grew up on typewriters. What does this mean for retail stores who were built with cash registers?

Digital "Natives" versus the rest of us still scrambling in a digital world

For those of you who read this blog regularly, you know that I'm a big fan of Kevin Coupe and The Morning News Beat. Kevin had a recent post entitled: The New Generation Gap. I was struck by Coupe's description of "Digital Natives" versus "Digital Immigrants" … and what that means for retailers.

By definition, I'm "older than dirt". That means that I grew up before the digital age. When I started my college teaching career, there was no "PowerPoint". You had to type handouts on a typewriter. Because it was too expensive to "Xerox" copies, you actually typed "mimeographs" and had to correct each mistake with some magic purple fluid that made your hands look like a zombie. There were no spell checkers, or auto fill fields. As a result of this scarred past, I and my peers are literally "immigrating" to the digital world.

Key behavior & value differences between "Natives" and "Immigrants"

Image: Imagerymajestic; Freedigitalphotos.net

As a definite "Digital Immigrant" (someone 30+), I can testify that I think about and use technology differently than my kids. A smartphone is still a phone first, which I can then use for the internet or GPS if I have to. My preferred form of communication is email, not texting. If I can't reach you, I'm most likely to leave you a voicemail. I still use credit cards for most purchases and I write checks to pay my credit card bills. While I own a tablet for photos and some music, my most trusted digital device is a notebook PC with a real key board.

Digital Natives are those that grew up with digital gadgets. Think of your kids or those under 30 today. They just think and operate differently. They also behave and shop differently. In short, Digital Natives can do anything and everything on smartphones or a tablet. They are "always on". They text instead of talking or email. They don't read newspapers. They look up everything they need on their smartphone, including best prices while standing in the store. If they have checking accounts, it's only to get a debit card … and would pay digitally by their phones if they could.

Digital Immigrants

Classrooms with chalkboards
Played music from records & tapes
Went to theaters to watch movies
Learned to type on keyboards
Used dictionaries to check spelling
Have and use checking accounts

Digital Natives

Preschools with tablets
Always had digital music
Stream movies or watch YouTube
Swipe strokes to text on digital pads
Rely on auto spell check
Use PayPal accounts

Retailers built in analog age will struggle to compete for Digital Natives

Most retailers that exist today built their stores when consumers paid by cash or check. So, stores were designed with cash registers, which forced consumers to cue up to check out. Signs are printed and reprinted as products change. Price tags have to be replaced every time promotions are run or prices change. In short, even most technology retail stores are "analog stores" built for the older "Immigrants" before everything went digital.

And, along comes Amazon and Apple. Both are retail concepts conceived as the Digital Natives were coming of age. Apple stores in fact only celebrated their 10 Anniversary in 2012. Apple stores were conceived in a digital age for the Natives who thrive in a digital world of gadgets. In contrast to checkout lines and cash registers in Best Buy, Apple eliminated cash registers and waiting in line with checkout on an iPhone. There are few signs in an Apple store. Most product information is now digitally displayed on an iPad as the "sign". As for Amazon, consumers are shopping their store while standing in Best Buy's aisles.

Change is inevitable … Retailers must "immigrate" to survive

Perhaps the great journey in life is when parents learn from their children … and grandchildren. While people over 30 grew up in analog world, we are immigrating to the digital age. My children are getting us to "text" by showing us how to speak it rather than try to type it on a digital keyboard. Touch interface of tablets is enabling even the oldest to rapidly immigrate to digital consumption of media. Grandparents are using tablets to connect with grandkids on Skype versus phones.

Much has been written about "showrooming". Showrooming is in fact a classic case of Natives using digital technology to read analog barcodes in order to shop for a better deal online. Some retailers, like Best Buy, have tried to make their bar code stickers unreadable. The answer for survival in a digital age is embrace the behavior and preferences of Digital Natives. Some retailers are already accepting PayPal. There are many more opportunities:

Integrating "clicks and bricks" … buy online and pick up in store
Using digital signage and rich media within stores
Optimizing web sites and "catalogs" for tablets
Enabling mobile payment by phone within stores or online
Migrating from loyalty cards to mobility check in and offers
Digital CRM to offer consumers service after the initial purchase

Retailers do not have a choice but to adapt. The Digital Natives have arrived. They are today's consumers … and they are having kids whose first computer will be a tablet.

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