by Fronetics | Apr 25, 2016 | Blog, Strategy, Supply Chain
Image source: tomicpasko | Flickr
They are your employees. They are your customers. Pretty soon, Millennials will be the supply chain.
As Millennials now outnumber Generation X and Baby Boomers in the workforce, shifts in ideas and processes were inevitable. But this generation is having an even more palpable impact: They are reshaping the economy as we know it, forcing businesses to reexamine traditional methods of buying and selling to accommodate their unique preferences and experiences.
A 2014 survey found that 46% of B2B buyers were Millennials, and that number is on the rise. Their preferences and behaviors are having a noticeable impact on B2B buyer behavior as a whole. In short, the supply chain should be prepared to change the way business is conducted to account for this generation’s impact.
Who are Millennials?
The term “Millennials” describes the generation of Americans born between 1982 and 2000. The more than 83 million Millennials represent a quarter of the US population, and are more diverse than any previous generation, with 44.2% being a part of a minority race or ethnic group.
Millennials are generally highly educated, though often underemployed and saddled with debt. They are digital natives who are decidedly collaborative by nature. Having grown up in a time of rapid technological advancement, their expectations and priorities are much different than previous generations. They’re delaying marriage and parenthood in favor of higher education and travel, fueling their strong sense of optimism. And they generally are reluctant to make major purchases — like homes, cars, and even music — instead favoring services that provide access to products without ownership, fueling the growth of the collaborative economy.
Ads be gone
Bombarded with over 5,000 marketing messages a day, every day for their entire lives, Millennials are able tune out traditional advertisements. They are turned off by direct sales pitches and much prefer word-of-mouth recommendations or joining communities around brands they like to learn about products and services. They are easily incentivized and want to be rewarded for their brand loyalty with things like discounts, access to information, and personalized communications.
Reshaping retail
Millennials are highly attached to technology. More than half go online multiple times per day, while more than a third (36%) report going online “almost constantly.” Approximately 90% are active on at least one social media network. They expect brands and businesses to have a digital presence and engage with them online — especially if they have a complaint or problem.
Having the internet at their fingertips shapes how Millennials shop. Their constant access to product information, user reviews, and price comparisons allows them to favor brands and products that offer maximum convenience at the lowest cost. Catering to their proclivity for the best for the least, giant retailers like Amazon have reset expectations for shipping times, availability, and price.
Millennials have taken shopping mobile. Around 92% will use a mobile device while they shop, and 78% will use an app to shop. And the revolution is far from over : Artificial intelligence, robots, and drones represent a new wave of technology that many tech companies, driven by Millennial innovators, are just a short step from achieving.
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by Fronetics | Jan 13, 2016 | Blog, Strategy
Some believe that the collaborative economy is the biggest game-changer in the business sector since the Internet. You might ask, exactly what is a collaborative economy? Researchers Alexandra Samuel and Jeremiah Owyang define the term in their informative, 28-page report, The New Rules of the Collaborative Economy, as “an economic movement where common technologies enable people to get the goods and services they need from each other, peer to peer, instead of buying from established corporations.”
Peer-to-peer engagement is a powerful one, and it’s demanding that many traditional companies take note. Take Airbnb for example. This past summer, 17 million people stayed with an Airbnb host, compared to 47,000 people five years earlier in the summer of 2010. The company has revolutionized travel for millions of people, and it has shaken up the hotel industry.
Another game-changer is Uber. The ridesharing service was reported to hold 46% of total paid car rides in the first quarter of 2015, with taxis, limos, and shuttle services falling from 85% in the first quarter of 2014 down to 53% in 2015. There is no doubt that the car service industry is forever altered.
Samuel and Owyang report several interesting findings regarding the collaborative economy. For one, they found that 51% of Americans engaged in a sharing service via mobile apps or websites in 2015. And secondly, each of the defined categories — e.g., goods, services, money, transportation, and space — saw increases in consumer usage from 2014 to 2015, including crowd-funding (from 6% to 14%), spaces to stay (from 7% to 17%), and pre-owned goods (from 34% to 44%).
What does peer-to-peer offer that traditional companies can’t? Some people find these services helpful when they are engaged in a “spending fast,” or when they challenge themselves not to buy anything new for a year. At this point, however, most consumers say they’ll go with whichever route offers convenience, brand names and services, and a savings of 25%. So, the trend toward a collaborative economy could reverse if the conditions were right.
Some companies are adjusting quickly, realizing that the traditional equation of business to consumer (B2C) operations is shifting. For example: West Elm is curating and selling items from Etsy; BMW started Drive Now, an on-demand car-sharing service; and Home Depot rents tools and construction vehicles. Companies may only need to be aware, adjust, and enhance rather than start their own, new collaborative business.
The report provides for three paths to competing in the new collaborative economy:
Price
It’s no surprise that consumers are driven by price. Keeping an eye on the price points of items and the charge for services offered is critical for all businesses, whether sharing or traditional. After all, half of Americans are swayed by items that are 25% cheaper than competitors’ prices.
Convenience
People want things to be easier, clearer, simpler. One-third of conventional consumers will consider switching to sharing services if convenience is offered. Subscription offers that deliver on a regular basis and renting options are top on the wish list for convenience-seekers.
Brand
Like a lot of consumers, sharers like well-known names, and this gives traditional companies an advantage if they can add a sharing option to their current offerings. Crowd-funding and collaboration during early start-up phases, however, can help new sharing companies to build their brand and gain a loyal following.
Though not entirely revolutionary, a collaborative economy might mean better prices, convenience, and perhaps the added bonus of peer-to-peer engagement (e.g., recycling, helping, doing good). Traditional companies, be ready — a change is rolling in.
