Are Millennials Really To Blame For The Bankruptcy Of SO Many National Brands?
National brands that were once strong are now beginning to suffer. Some have even filed for bankruptcy. Are we to assume that the growing number of millennials are to blame? According to Pew Research Center millennials now outnumber Baby Boomers, with there being 75.4 million millennials versus 74.9 million Baby Boomers. With such a large millennial population, their spending habits and choices in shopping and dining have a great impact on the health of national brands. There are a few reasons why national brands are suffering because of this latest generation.
Many casual dining chains, such as Applebee’s, TGI Fridays, Ruby Tuesday and Buffalo Wild Wings, are having difficulty attracting customers and increasing sales. Unlike previous generations, millennials prefer to:
- Cook at home
- Order delivery from restaurants
- Order from quick-serve restaurants
For such reasons, it is easy to blame millennials for the downfall of national restaurant chains. But it is not entirely this generation’s fault that sales are slipping. Everyone enjoys the convenience of delivery or the convenience of fast-food. National chains are still playing catch up in this regard, and that can turn customers away.
National brands, such as Toys “R” Us, have seen a decline in sales to the point of filing for bankruptcy. Since millennials make up a large portion of the customer base, is it fair to assume they are the problem? First, we need to consider how people shop. Preferences and trends change with each generation. For instance, many millennials prefer online shopping and probably don’t remember a time when online shopping wasn’t available. It’s fast and convenient. Prior generations visited stores to buy items. Broader trends in shopping habits are the cause of declining sales. A single generation doesn’t cause the downfall of these companies that have been around for decades. But, because millennials are a large group, these trends are amplified.
Making A Comeback
Leaders within these national chains must recognize that millennials are adults and many are parents. Therefore, if leaders want to make a comeback, they need to strategize and know how to engage this large population of shoppers. For retail giants like Toys “R” Us, marketers need to take advantage of the nostalgia effect. For example, most millennials will remember getting the Toys “R” Us catalog in the mail and excitedly going through it, circling the best toys that they wanted for Christmas. This was almost a rite of passage for most kids. Now that many millennials have children of their own, this sense of nostalgia is what is needed to bring them back into the stores.
Innovation Is Key
National chains that have been struggling must choose to integrate and innovate. Technology is in everything we do and it is only going to become more prominent as time goes on. Therefore, retailers need to learn how to integrate technology into the shopping experience. If a retailer wants to stand out from the competition, then it is important that they innovate. Innovation should center around ideas that make the shopping experience fast, convenient and pleasant for the customer. Unfortunately, many national brands have had little to offer in the way of innovation. They seem to just copy what they see other retailers doing. This is not the best way to attract customers.
Millennials are being unfairly blamed for declining sales and bankruptcy filings in national brands. However, it should be noted that no single generation is the cause of the problem. Millennials get blamed simply because they make up a large part of the shopping population resulting in magnified shopping trends. Retailers need to learn to connect with millennials and innovate to make the shopping experience a better one in order to attract this generation.