Millennials are the world’s most powerful consumers: Now, what do they want?

The world’s two billion millennials have come of age.

They are no longer merely the largest demographic in the world – they are also the largest consumer group. Morgan Stanley refers to them as “the most important age range for economic activity.” Brands can’t afford to ignore them.

But who are “millennials” exactly? What do they value? And what experiential and in-store marketing strategies can brands employ to appeal to this vast consumer group?

Who are millennials?

Broadly speaking, most research centres and think tanks see millennials as anyone born between 1981 and 1996. Not that it’s quite that simple. The Wall Street Journal, for instance, have them pegged between 1980 and 2000. President of the Pew Research Center, Michael Dimock, rightly said, “cutoff points aren’t an exact science.” But precise dates are not the only bone of contention when it comes to defining the generation.

As a demographic, they’re an extremely broad subset, to the point that many have questioned the validity of the term entirely. Depending on your definition, the oldest millennials could be pushing 40, while the youngest are still in their teens. So much changed in this period, from socio-economics to technology, that the age gap between top and bottom seems even wider.

Without doubt, it’s a problematic phrase. No marketer worth their salt would look at someone in their early 20s through the same lens as someone in their mid-30s – such vague boundaries don’t make for effective segmentation and personalisation. That hasn’t stopped people using the term – far from it. The press, in particular, has become addicted to the term – where it seems to have morphed into a catch-all phrase meaning, basically, ‘young people’. And more often than not, the term has snidey, negative connotations – they’re blamed for the death of everything from napkins to sex (and much more besides).

Despite the obvious flaws, however, ‘millennial’ is a helpful term to consider a generation of people, not bound by the usual demographic detail, but more by a set of beliefs and life experience. They’ve grown up surrounded by technology, for example. They’re internet savvy, entrepreneurial; they care about environmentalism. They’ve been hugely impacted by the boom and bust of global finance. They’re renting, not buying; they’re lumbered with debt. They’re settling down at an older age, having fewer children.

These trends are, to reiterate, broad strokes. Where we think the term comes in more useful is thinking about the millennial mindset – a group of consumers that are increasingly experiencing similar socio-economic conditions. The wealth gap between the rich and poor widening, the middle class shrinking, wages stagnating, volatile politics, rising awareness, and concern with social issues – this all feeds into a new mindset that transcends age and into something bigger.

Millennials and the retail experience

So, what about the retail sector? The death of the high street has been widely reported, and while it’s true that many large retailers have run into problems – not least House of Fraser, BHS, and M&S – in some ways this feeds into the dwindling middle ground that’s become a feature of modern society. All those brands – and you can add to that Toys ‘R’ Us, Mothercare, Maplin and plenty of others – sit firmly in the centre.

In March 2018, Deloitte pointed to this disparity in what they called ‘The great retail bifurcation’. Their 12-month study revealed a renaissance in retail, not the apocalypse many have suggested. And while the report is US-focused, it’s difficult to argue that the trends are much different from the rest of the Western world.

The facts are stark.

Brands at the lower end of the spectrum compete on price – it’s where your Walmarts, Targets, Lidls and Asdas sit – all of whom are raking in profit. At the higher end are the brands which play on luxury. In food suppliers, that could be someone like Fortnum and Mason who recorded a fifth consecutive year of double-digit growth in 2017. Despite the disparity in cost, brands at both ends are embracing similar consumer trends. Provenance and environmental credentials are two.

Lidl’s environmental policy says: “We believe that the efficiency and leanness of the discounter model naturally helps to drive sustainability, bringing greater control to our consolidated supply chains and driving the efficient use of resource”.

Kering – the international luxury group that owns Gucci, Yves Saint Laurent, Balenciaga and Alexander McQueen (among others) states that “we will CARE about our impact on the planet, on climate change, on natural resources; COLLABORATE for the good of our employees, suppliers, clients; CREATE pioneering ideas to safeguard our rich heritage, and empower future generations”.

Environmentally friendly retail

The two brands, despite obvious differences, are difficult to tell apart when it comes to environmentalism. Why? Well, ‘millennials’ believe that global warming is the world’s biggest problem, they say sustainability is a shopping priority, and they buy products they believe are eco-friendly.

Simply, the demands of consumers are being met by brands. And don’t forget, millennials aren’t merely the largest consumer group, they’re also taking over the workforce, too. Brands focus on sustainability not just as a result of external pressures, but internal ones, too.

One caveat about environmental thinking: belief is one thing; behaviour is another. Yossi Sheffi, the Director of MIT’s Center for Transportation and Logistics and author of Balancing Green: When to Embrace Sustainability in a Business (and When Not To), found that while people say they want brands with sustainable chops, we don’t tend to put our money where our mouths are. Sheffi writes: “Although a number of surveys show that most consumers say they want sustainable products, sales data show that only a small percentage are actually willing to pay more to buy sustainable products.”

However, attitudes are changing. And the millennial mindset is the catalyst. Baby boomers, for instance, are investing far more heavily in Environmental, Social and Governance (ESG) investments, more people of all ages are volunteering than ever, brands, as we’ve seen, are placing sustainability at their hearts.

Beyond environmentalism

Perhaps one of the most interesting millennial trends is that of the local, artisan, craft and independent stores. The high street has diverged, and out of that has sprung, according to The Telegraph, a group of thriving independent retailers.

So how are these brands making a go of it in such a tough climate? Personalised experiences are one area the article highlights, and certainly something large brands have similarly focused on with their marketing efforts.

Accenture surveyed 6,000 consumers, 1,707 of whom were millennials. Their studies showed that new consumers want a cohesive brand experience between online and offline. Contrary to popular belief, this didn’t mean eschewing brick-and-mortar stores entirely, more that the experience had to be complementary. One respondent claims that “[Y]ou want to see it; you want to touch it; you want to smell it; you want to pick it up”.

RetailMeNot CMO Marissa Tarleton agrees, and recommends that retailers capitalise on their stores as a “benefit,” incorporating personalised experiences. She adds that brands need to ramp up their mobile marketing efforts “quickly”.

The second element of success The Telegraph pointed to was community engagement. These independent stores have been particularly proactive in their local areas, and big brands, too, have been similarly proactive, albeit harnessing a much wider community. From Coca-Cola’s public policy on engagement to XBox Ambassadors to Sephora’s Beauty Insider Community, brands are latching on to the power of the group.

The final, and most interesting, point (for us at least), is in-store spectacles. Emma Woodward, quoted in The Telegraph piece, is the co-founder of Aspire Style. The first store opened in Warwick over 10 years ago, and the brand now has shops in Oxford, Solihull, Stratford and Coventry. How are her stores thriving? “Providing an element of entertainment and in-store theatre is key”, she says. “We have daytime events that include free refreshments, games and prizes and link to specific things, such as the Royal Wedding”. The store also puts on regular after-hours events, such as fashion shows and live music.

Brands and retailers are increasingly breaking out of the mould of being a transactional space. Experiential marketing is nothing new, of course, but it’s one effective way to break out of the middle ground for top end retailers, independents, lower end stores, and everywhere in between.

How can you bring experiential marketing to millennials?

You can read our 10 key principles for experiential marketing the right way in full, but it’s worth pulling out some of the key points here as they are specifically designed with this savvy consumer in mind.  

  1. Customer first

You might like the experience you have in mind – but does your customer? A firm grasp of the end user – the retailers and consumers – is essential.

  1. Ideas over technology

Tech is a tool, nothing more. VR, AR, AI, apps and games – they can all be engaging, but not without a creative concept or idea. Wow them with ideas, not with gadgets.

  1. Engagement is everything

Is your marketing passive or active? Experiential marketing has to be active. You’re not just giving out product or information for the customer to receive. You’re inviting the consumer into your branded world for a part of their day.

  1. Aftercare isn’t an afterthought

Experiential campaigns lead to an uplift in immediate sales results. But they offer the opportunity to create something longer-lasting. ROI isn’t simply what happens on the day. Experiences can stay with people, building brand equity in the long term.

  1. Smiles are currency

Do you delight? Does the visitor come away from the experience beaming? They need to. Smiles are a powerful trigger: the physical movement of the face triggers a psychological reaction, and the customer feels happier, lighter, and more engaged with the day.

  1. Think about impact first: the reach will follow.

Word of mouth referrals are the best form of advertising. 84% of consumers trust recommendations from influencers, friends, family members and peer networks – so make something that people want to recommend.

Brands need to break out the mould of labelling millennials and start thinking about a new consumer with a new way of looking at the world. This purported age group are not that different to everyone else, but in many ways they represent the state of things to come. For consumers, sustainability, provenance, authenticity, community, a sense of fun and experiences that cut through the incessant chatter of the modern digital world are the things that stick in the mind.

The way to break through is with creative thought, impeccable execution and empathy with the people you want to engage.

 

To find out how we helped other brands cut through, check out some of our case studies here.

The four Ps of experiential marketing: Place

By Andy Youings. 11th September 2018
The four Ps of experiential marketing: Place

The four Ps of marketing – product, price, promotion and place – have been the core tenets of the marketing mix since they were first proposed by E. Jerome McCarthy in his 1960 book, Basic Marketing: A Managerial Approach.

Why have they stood the test of time? Because they’re fundamental. What you’re selling, how much for, where and how you promote it are the crucial things you have to get right to make your marketing strategy a success. Marketing evolves as any discipline does, so another three Ps have subsequently been added – packaging, people and positioning – but it’s the core four we’ll focus on here.

We’re interested in how those four foundational pillars align with the goals of experiential and in-store. For this first part of this four-part series, we’ll focus on place – how the right venue, position and execution can have a huge impact on success.

Experiential marketing

Marketers have to consider place. Adverts have to be on the right billboards or social media channels – if your target demographic views the world through Instagram, it’s no use putting time and money into Facebook, for instance. If you have a premium product, you don’t want it side by side with the discount retailers in Lidl.

Equally, the choice of venue for an experiential campaign has to be spot on. There are two things you need to understand in cast-iron detail.

The first is your target audience. Who are you trying to reach? The second is the options available. What are these venues like, what else is going on, and what will you be up against?

Will doing something experiential in the middle of a shopping centre get the right kind of exposure? What other shops are in that shopping centre? Are they right for the brand? Is there a ‘trendy’ bit of town that might be better?

Perhaps an event or festival might be a better bet? If you’re a food and drinks brand, look up food fests and county shows, which often draw in the same ‘foodie’ demographic. If you’re after the alternative healthcare crowd, branch out into music festivals.

It also pays to understand what else is nearby. If you’re launching a new bottled water at £2 per bottle, and one of your target venues is surrounded by stores running meal deals and offers with free water, it doesn’t matter how amazing your product or your experience are: people looking for water will likely go elsewhere.

In-store

For in-store, you need to ask yourself a similar brace of key questions. Firstly: are you in the right space for your consumers? Supermarkets, department stores and pop-ups have different dynamics and guide people to different actions. Secondly: are you in the right place in the space?

Answering the first one is a matter of brand alignment. If you’re pitching a bargain product with a lot of stylish potential, do you want to be in a supermarket that draws customers in purely on price?

Your target demographic will also have an impact here. If you’re trying to attract millennials, you have to recognise that millennials spend less time in shopping centres, department stores or hypermarkets. As Target have discovered, they prefer to shop at small, focused express-style stores that emphasise an understated, affordable offering with a little name credibility. This is why Gap and Macy’s are closing stores, but Old Navy continues to thrive; it’s also why pop-up shops are booming, turning over £2.3 billion in trade during 2017.

The second has a more complex answer. You want to be near the product, so people can walk away with it in hand ready to buy, but beyond that: where in the store should you set up? Near the entrance? At the end of aisles? Near the back? Where will get the most footfall?

To work that out requires research. Fortunately, we have access to a great deal of that. Retail psychologists and behavioural economists have many, many ways to track, map and model how consumers shop.

The classic talking point that consumers more often look to the right when first entering the shop is only the beginning. It’s also not strictly true: it’s the layout of the whole shop which guides the consumer’s eye. If consumers are moving clockwise around the shop, they look both ways when they come in, and keep looking toward the centre, remembering more products.

Consumers also move differently depending on how long they’re planning to be in store: there are fourteen routes around a typical supermarket that correspond to consumers taking short, medium or long shopping trips.

Other research indicates that the straight line ‘gridiron’ layout of supermarket aisles may not be as common-sense or straightforward as we think, and an experiential presence which introduces a curved detour might disrupt on a subtle yet powerful level. Think about IKEA’s walking tour, with routes through displays that feel more like an ornamental garden than a big shop.

However, the best way to find out where you should be in-store is to ask the store. The dead spots, and the liveliest spots, will vary depending on which branch you’re in, and the only way to know for sure where people stop and shop is to find out from the people who work there. This is yet another reason to get the store management on your side, as we’ve advised before – they know their own space better than anyone.

Place is a cornerstone of marketing for a reason. Your message has a target audience; you need to put it where they’re going to look (or listen, or taste…). Experiential marketing is no different. Be where your target demographic are going to be; don’t be where their attention isn’t. Know what you’re up against and learn as much about the space you’ll be in as you can.

To see how we’ve put the four Ps into practice for our clients, take a look at some case studies.

Segmentation and personalisation in experiential marketing: Can you be all things to all people?

Right now, companies can discover demographic data and buying habits, and pitch a product before customers even think about buying it.

Despite this, only 7% of organisations make personalisation their top priority. To compound the problem further, research by Infosys suggests 31% of consumers wish their shopping experience was more personalised, while Segment’s 2017 State of Personalisation Report claims only 22% of shoppers are satisfied with the personalisation they see.

Put those together and you discover that advertising, marketing and shopping aren’t personal enough. One more stat to prove the point: 53% of consumers are willing to share personal data in exchange for personalised shopping experiences.

The question for field marketers is, can an in-store event be personalised and, if so, to what extent?

Who’s doing personalisation well?

Let’s talk about Share A Coke first – a massively successful personalised marketing campaign that blends user-generated content, social media and experiences.

The campaign kicked off in Australia in 2012, followed by the UK the following year and the US in 2014. Experiential kiosks set up in public areas allowed visitors to customise a Coke mini can for themselves and send another to a friend via Twitter.

In 2015, personalised glass bottles became an option as e-commerce came into the campaign. In 2016, song lyrics found their way onto the cans – in 2017, surnames. The specific names, nicknames and group names on the cans and bottles change around, targeting new market segments every year. At its initial launch, 76,000 virtual cans were shared online, while baseline consumption of Coca-Cola went up by 7%.

Argos’ Kid In The Ad campaign drew attention, too: the retailer produced over 20,000 personalised Christmas ad slots in December 2017, putting individual customers – or rather, the people who mattered most to the customers – into the key shots at the centre of the ad’s narrative.

Argos secured the buy-in from parents by taking advantage of its customer insight: the firm knew the majority of its customers had children aged 5-15 and were willing to share photos on Facebook, so that’s where Argos asked them to join in.

After a custom Facebook chat experience, plus a short editing and screening process, the personalised ad was #ReadyForTakeOff – and even prompted the customers to share with a trackable hashtag. The ad was well received – Kantar Millwood Brown’s end of season survey, which tracks twelve proven purchase motivators, placed the campaign top for engagement, and Argos saw record sales growth across the last quarter of 2017.

Segmentation – key things for brands to think about

These campaigns work because the brands behind them know their target audience. Coke didn’t have to guess which 200 names to print on cans. They were targeting Millennials, i.e. people born in the 1980s and 1990s, so they could look up birth registrations and know which names would be most widespread in that demographic. Argos knew that their customer base had children and used Facebook – so that was the basis for their campaign and the platform they used to reach out.

The same basic principles work for an in-store or on-street experience. All you have to do is think about:

    • Audience. Who are you actually targeting? This is the key to everything – you need a consumer profile so you know who to entice to the stand, how they like to be spoken to, and what they’re likely to be buying on the day.
    • Goals. What is the next action the in-store activity wants these people to do? Buy something? Sign up for something? Share something? Pitch an action that your target segment is likely to take.
    • What is the experience? If it’s for Millennials, it’s probably worth leading with technology, and emphasising something real and authentic. If it’s for older consumers who are less impressed by tech, a VR headset is probably not where you want to go.
    • The aesthetics of the stand. You’ll have brand guidelines – look, style, tone of voice and so on – so apply them, and customise them if you can. If there’s a specific change you’ve made to your brand’s look for a particular product, have that follow through to the stand. Make sure there’s something there which invites people over and promises something unique.
    • Staffing. The people running the event are as important as the event itself. If you’re aiming at retirees, perhaps older people manning the stand would be preferable to on-trend Gen-Zedders?

 

 

Segmentation or personalisation in field marketing?

You can’t be all things to all people. Your field marketing should be highly targeted based on the demographic you’re interested in. But targeting is very different to a personalised experience.

So how can you make something ‘in the moment’ personalised to the people who might be there? One way, potentially, is technology. Could you offer people a QR code via email or app that they can bring with them to an in-store event? That code could trigger something individual and special in-store – melding the physical and digital in delightful ways.

It depends on your brand, of course. Involving customers in something more than simply trying before they buy – allowing them to create with you, and take something away with them – can be highly effective. In 2017, for instance, Lush Cosmetics launched Creative Showcases – a series of in-store events which invited fans of the brand to come and get their hands dirty, not just smelling their products, but making them too.

Not only was this highly shareable on social media, it helped connect the individual with the brand in an exciting way. It wasn’t personalisation in its truest form, but it was an individual experience in which the customer was the star. It was so successful that they approved a series of events in 2018, too.

Another nice example of this is Extract Coffee (Bristol) who offer home barista courses where you get hands-on, brewing your own coffee and really experiencing the brand.

So events can be personalised in a number of creative ways. But it’s perhaps the after events where personalisation can come into its own. If you capture the right data from your customer conversations on the day of your field marketing activities, you can personalise and segment your follow up marketing.

You can go beyond the “use their first name” and actually talk about something they said, something they shared, something they told you, proving that your brand pays attention.

Experiential marketing benefits from segmentation – in fact, every form of marketing does – and offers unique, one to one opportunities to collect the data that makes for top-end customer profiles. It might help question (or back up) some of your existing consumer preconceptions, showing you how you can take the rest of your marketing to the next level

Segmentation for in-store and on-street marketing is the result of customer research into the type of consumer you’re looking for. So naturally, your choice of venue, staff and… well, everything… comes down to your target. You just need to know them, and put that knowhow to good use.

Personalisation requires more thought and more innovation to make it truly original to the individual. It’s possible, and as Coke, Lush and Argos showed, the results can be spectacular.

To see how we’ve helped brands up their marketing game, take a look through our case studies.

Image credit: http://www.quoteswave.com/picture-quotes/317127

Experiential marketing: Breaking the habits of a lifetime

We’re all creatures of habit.

We frequent fewer than 25 places in our day to day lives, and form close relationships with five people. We walk around the supermarket and put exactly the same things in our trolleys, week in week out. We stick with the same brands, because – well, better the devil you know.

The challenge for brands is in breaking those habits.

They’re up against a fundamental principle of human psychology: risk aversion. Change means a loss of control over our circumstances, a loss of face as the things we’re used to become less than desirable, and a concern that the new way of doing things won’t work. Understand that and you understand why most of us prefer a sure outcome, avoiding the grey area where things might or might not be OK.

There’s another factor coming in the opposite direction. Habits are efficient: we form them because they’re more efficient than processing situations and making decisions as though it’s our first time every time. The cognitive loop between cue, routine and reward becomes encoded in our procedural memory, and we keep doing the thing that worked the first few times we did it.

For many brands – particularly new ones, but also incumbents with similarly-sized rivals – these are the deep seated psychological routines that you’re fighting against when you’re trying to get consumers to try a new product.

Why would they change? Why would they want your product over the one they always get?

How brands break the habit

A change in habitual buying patterns can be extraordinarily powerful. The same study which identified the 25 place limit also revealed that people can change. It’s the number of places that stays constant – if people start to frequent a new place, they usually stop going to another, and the overall number of regular haunts stays the same. In other words, if you can persuade people to buy a new product a few times, it can become part of their routine.

The Sainsbury’s “Try something new today” campaign was aiming for £2.5 billion in revenue growth – and achieved it when they worked out that this target boiled down to a trifling £1.14 per customer. Encouraging every customer to pick up one thing they wouldn’t normally consider made the difference, permeating Sainsbury’s marketing messaging and increasing profits by 43%.

It worked because Sainsbury’s understood how people shop: they do it on autopilot, paying so little attention to their surroundings that a literal man in a gorilla suit can pass them by. The supermarket looked into why routine ruled the day in food shopping, and found that 74% of their customers cooked the same things every week, lacking practical inspiration for midweek meals.

Sainsbury’s offered simple ideas for upgraded recipes – adding an ingredient to the sort of meals people throw together on a rainy Tuesday night – in a convenient form, with idea cards at the store entrance and point of sale displays reinforcing the suggestions. They made the change small and simple and easy to execute, showing that there was another way to do things – even if it’s just adding apples to sausages.

It’s these small touches that disrupt habitual thinking, presenting a small change that makes people re-appraise their automatic decisions and think, “is this really the most efficient thing to do?” Pack design – something that’s visually distinctive and makes a disruptive claim – can do the trick, as can apparent innovation, but there’s still an awful lot of noise on the shelves, and the boldest of signals will often struggle to cut through.

The experiential answer

A great experiential campaign can cut through all of this. Real change can come through the personal experience of the consumer, disrupting their routine more directly and offering more incentives to try something different.

Yes, the potential purchaser has to like the product, but a great experiential campaign can create the right environment for enjoyment. Activating all five senses goes further than reaching out to one. Smell and taste in particular are powerful disruptors of the day to day shopping experience, and become the basis for significant memories, experiences around which a future habit can be formed. If the experience can posit a single, repeatable action that ties to a predictable, repeatable cue, the habit formation process can begin within days.

The key to changing habits, according to behavioural analysts at the Interaction Design Foundation, is to identify the cue and reward that reinforce the behaviour, and substitute them with something else. An enjoyable, active, easily repeatable experience can become a new reward – the challenge for experiential marketers, really, is to put their product into the context of the customer’s life, attaching that reward to a new cue.

There are few marketing options that can break and remake customer habits in one go, but experiential marketing comes close. At the very least, it can disrupt the routine into which shoppers fall and take them off purchase autopilot, putting them in a position where they have to make and evaluate a choice – and that’s the stuff of which a future buying habit is made.

Image credit: (CC) Tnarik Innael, via Flickr: https://www.flickr.com/photos/tnarik/2238942024

Iceland is cool: Is your in-store marketing?

By Joanne Walker. 23rd August 2018
Iceland is cool: Is your in-store marketing?

Iceland is cool. Really, really cool.

As trends among British 18-30s shift away from hard partying and toward mini-breaks, new experiences and Instagram opportunities, Iceland’s become a more popular tourist destination than the Bahamas, Brazil and China. US travellers have been drawn in droves, too – Iceland is more affordable than ever, and has unprecedented media exposure after everything from Game of Thrones and Rogue One to Black Mirror and Noah filmed scenes there. Millennial travellers are drawn to Rejkjavík’s live music scene – dozens of bands following in the wake of Sigur Rós and Of Monsters and Men – and to its unique, no-chains café culture.

Basically, it’s hipster heaven – and it’s drawing over two million visitors a year, transforming the Icelandic economy. Challenger brands from outside the country have recognised the boom, and are bringing a honed, powerful in-store marketing experience that’s aligned with the emerging consumer demands. It’s not just that they understand what the tourists want – they’re offering an experience that’s new to Icelandic consumers, and shaking up the retail scene as a whole.

The new retail experience – and why Millennials want it

Iceland’s retail environment has been shaped by high prices and limited choice, so big-name brands from Europe and the US already have economy and novelty on their side. Beyond this, however, they’re offering something else – a different kind of shopping. They understand that lower incomes and e-commerce options have turned the high street from a ‘buying things’ place into a ‘finding things to buy’ place, centred on discovering and experiencing products.

Despite the hue and cry about how they’re killing this industry or that, Millennials do actually love shopping. 41% of them ‘showroom’ – they check out a product on the high street, but shop for it online to find the lowest price. They touch, smell and handle merchandise because they don’t like buying sight unseen, and cross-reference that experience with online offers and reviews. If they feel courted by a brand, particularly a brand that treats them like a valued customer and leans in to this “try in-store, buy online” shopping system by offering a personalised discount, 95% of them will become loyal customers.

Millennials

Millennials also go for different kinds of shops. Pop-ups, which provide distinctive products for a short period, often outperform traditional department stores. They’re more curated and personal, better equipped to provide the courtship experience. Learning zones – environments where the consumer can try out the product, like taking sporting goods for a spin in a fitness studio – also do well. The Boxpark concept – shipping containers that convert into revolving or semi-permanent retail spaces, coworking studios and entertainment venues – offers a blended experience, equal parts work, entertainment and shopping.

Millennial consumers live in a bigger world than before – they’re more connected, they’re always online, but they ‘ache for a sense of unique contribution’. They’re self-advocating, strong-minded, and they don’t believe what they hear from the top. They have to be shown why a product is special, not just told – and that’s why in-store marketing works so well for them.

What Icelandic brands bring to the storefront

The challenger brands who have entered Icelandic retail are used to this experience-driven approach to retail. As a result, they’re beginning to edge out local brands, who aren’t used to foreign competition and, according to McKinsey’s study of the Icelandic economy, have developed in an insular, localised, demand-driven market.

It’s also a small market, and the McKinsey study explicitly references “substantial constraints on how much companies can grow without gaining a dominant market position”. In other words: never mind room at the top, there’s not masses of space for brands underneath it.

What these new brands don’t have, however, is as deep a knowledge of Icelandic culture and retail as the incumbents. Icelanders call each other by their first names, put a specific sauce on almost everything, and are compulsive spenders, working harder and shelling out more than most Europeans.

Culture can easily get lost in translation, particularly with a language that prefers to coin its own words over adopting them from outside and a ruling body concerned about ‘digital extinction’ of its vocabulary traditions.

For instance, signs for Icelanders have to be written in Icelandic – when H&M announced its grand opening in English, it was actually breaking the law. Tech support for Icelandic is poor – Google eventually adopted Icelandic speech recognition, but Apple and Alexa don’t support the language at all, and social media platforms generally implement it poorly. Brands in Iceland are walking a tightrope – they have to be understood by an Icelandic Millennial audience that sees American English as cool, practical, international and reliable, without eroding the sense of attractiveness, relaxation and authenticity that’s attached to the Icelandic language.

In the face to face world of in-store marketing, those values matter. Native brands who can align their Icelandic virtues with the hands-on, “try here buy online” retail experience preferred by Millennial audiences can create something above and beyond what the challengers can offer.

To see how we’ve helped brands build face-to-face in-store experiences in the UK, check out our case studies.