By Stephanie Crets
Cause marketing campaigns have become a trend this back-to-school shopping season. A study by The Case Foundation found that millennials develop social consciousness earlier in life than former generations and have a strong desire to help others, offer funds to charities and generally want to give back to their communities. Thus, retailers are taking advantage of this during the back-to-school shopping season to inspire millennial shoppers to give back with their cause marketing and loyalty programs. For example, Target partnered with the Kids in Need Foundation, Macy’s has Fashion Pass, which allows customers to get 15 to 20 percent off a purchase for donating to various charities and TOMS offered a “Give Back When You Go Back” promise to its shoppers that it will help one person in need for every product purchased.
RM spoke to Brandon Rael and Andrew Billings, two retail consultants of the North Highland Company, about this topic and the two offered a lot of great insights.
Why is back-to-school (B2S) one of the best times to target millennials for these loyalty programs, since some of them may not be doing any B2S shopping?
Loyalty programs are traditionally powerful tools to establish a long-term customer relationship, and millennials represent the most critical customer segment for many fashion retailers. While millennials may not be “back-to-school” shopping July through September, many utilize this same time period to stock up on the latest fall fashions and exhaust a significant portion of their annual personal shopping spend.
Like other customer segments, millennials are looking to take advantage of the B2S promotions through large purchases, and retailers know large transactions often increase the likelihood of customers joining loyalty programs. But regardless of the shopping season, anytime is a good time to encourage new members to join a loyalty program.
Do you think retailers target millennials during the holiday shopping season as well? Giving back is definitely a theme during the holidays.
Yes! Retailers understand that millennials connect with brands that align with their interests, and during the holidays, giving and community are on the mind of most millennials.
As millennials express that social purpose is among the key factors that influence purchase decisions, leading retailers are connecting consumers to their social/community platforms across the brick and mortar and digital channels. Millennials desire to be a part of the movement, and providing one that they can own and be passionate about is the sweet spot for retailers.
Have these cause marketing campaigns been beneficial to the retailers so far, or is that data not available yet?
The next generation of spenders, the millennials, spend money differently than previous generations, and marketers need to adjust their strategies.
How are retailers using these campaigns to target millennials?
What worked five years ago, doesn’t work now with millennials, in terms of marketing, selling and advertising. Many are seeking personalized, targeted promotions and discounts as the price for their loyalty. To reach Millennials on the various social media channels, retailers and their brand must become a routine part of their conversations concerning product information, updates and special offers.
Can retailers tie loyalty programs and social responsibility campaigns together?
Absolutely. Today’s millennial consumer is demanding an increased social responsibility from the retailers and brands. Combining social responsibility with a retail loyalty program is more appealing to millennials as they show a preference towards nonmonetary benefits, compared to prior generations. This trend has lead customers to look for companies and brands that are doing their part to help the world by supporting a cause.
Do you think millennials are more likely to shop at places that are more socially conscious?
Without a doubt, yes. Millennials have proven to consider much more than just the quality, materials and price when deciding which products or services to purchase. A retail company’s social and/or environmental commitment is a significant consideration for the millennial consumer.
Millennial consumers are more likely to build long-term relationships and reward retailers that are socially and environmentally responsible and active. That being said, retailers must still present an overall value to the consumer that is competitive with the broader market to thrive in the long-term.
Brandon Rael is a New York-based retail strategy and operations Principal with deep experience as an industry leader for retail and global consulting firms. Brandon has led global delivery teams to help clients achieve operational efficiencies and sustainable profitability improvements, and he has defined transformational strategies to leverage technology solutions that address complex omni-channel business challenges. Brandon has partnered with global and iconic retail companies as they face the challenges of a very dynamic marketplace.
Andrew Billings is a senior manager of retail and consumer products at the North Highland Company. He has 8 years of management consulting experience, all within retail and consumer products industries. He brings deep expertise within the areas of Product Lifecycle Management (PLM), Product Development, Strategic Sourcing and Supply Chain Transformation. His project experience spans across Strategy Definition, Process Improvement and Systems Implementation. Andrew has served a multitude of retail clients, including vertical specialty retailers, global fashion brands, department stores and big-box leaders.