FOMO, or ‘fear of missing out’, has become a phenomenon among the millennial generation.
Millennials are spending more, travelling more, and seeking experiences more than any other generation, with Gen Z close behind. Of course, millennial instincts for sharing are well documented, as they are constantly in search for places to post about their experiences. Social media only adds fuel to their FOMO fire, enticing them to spend ever-increasing shares of their disposable income on experiences so they feel like they are keeping pace with their perpetually posting peers.
While these behaviours may strike fear in the heart of retailers attempting to capture their share of millennial disposable income, they actually point directly toward new and unprecedented opportunities to differentiate. For perhaps the first time in my lifetime, price is no longer the defining factor in purchase decisions. In fact, just the opposite is the new norm: millennials are consistently willing to pay premium prices for products, when they are accompanied by engaging experiences.
Taking full advantage of this unique opportunity requires more than the occasional loyalty perk, trunk show, or Instagrammable moment. Building a dedicated community of loyal customers requires one to become an active part of that community. And there really are no shortcuts. Joining a community takes time, dedication and persistence. If retailers ultimately want to bring the community to their brand, they first have to bring their brand to the community.
To date, few retailers have capitalised on this rare opportunity to differentiate on something other than product or price, generally by investing in mobile engagement strategies that extend beyond the smartphone. Those who have succeeded at becoming a meaningful part of their communities, have done so through innovative content tactics that engage with people who share a core set of interests, beliefs, and behaviours:
1. They develop a sense of purpose for their brand, and they design brand experiences that reflect that purpose, to create connections with people who have similar lifestyles and values.
2. They consistently go where their customers gather and bring their brands to them through pop-up experiences and shopping opportunities.
3. They develop a mindset and culture that embrace mobile engagement first – and then design each experience accordingly.
Creating a reason for millennials to connect
In a world of endless choices filled with new competitors around every corner, brands that have lived by the ‘one-stop-shop’ mantra are being picked off one by one. Meanwhile, more focused niche brands are thriving. These brands – which most typically have a clearly defined sense of purpose – understand that “finding your tribe” is critical to developing meaningful connections.
Finding your tribe requires that you identify a community based upon shared interests, values, beliefs, and behaviours. Doing so can reap both short – and long-term – benefits for the business:
- Developing and nurturing a tribe can help brands identify, establish and design experiences based upon a value proposition that is relevant to and resonates with their target community.
- Identifying with people of similar values and lifestyles can help nurture authentic relationships that tend to be durable and long-lasting.
- Relationships built upon common beliefs and shared values typically engender feelings of loyalty that can lead to greater long-term recurring revenue.
Brands that will thrive for the long term will do so by recognising that they must continually contribute to and empower their communities, which will result in deeper, more meaningful relationships.
Nurturing relationships requires a commitment to being an active part of the community, and retailers can no longer rely solely upon their stores as the centrepiece to their community-building strategies. Once again, we can learn from the emerging niche brands. Most emerged as digital natives, but they quickly learned that physical, ‘in real life’ (IRL) connections are critical to nurturing community, particularly with the millennial generation. Many have looked to pop-up shops as a key element of their IRL engagement strategies, and the pop-up industry is suddenly booming.
As the experience economy continues to expand, the number of opportunities to connect where your community gathers grows exponentially. Festivals, for example, exist to bring like-minded people together. Today, people – particularly millennials – gather in large numbers at Harry Potter festivals, craft beer festivals, cat video festivals, yoga festivals, chocolate festivals, duct tape festivals, The Big Lebowski festivals and, yes, even FOMO festivals.
From portable canopies at local events to elaborate temporary shopfronts in high-rent city centres, savvy retailers are investing in imaginative pop-up experiences that bring their brands directly to those places where people gather. By their very definition, pop-up shops – temporary, soon-to-disappear experiences – are perfectly suited to capitalise on Millennial FOMO. Unsurprisingly, pop-ups have grown into what many analysts estimate to be as much as a £60B industry.
Creating connections that last
Whether it be through pop-up shops, permanent shops, social media or digital channels, retailers need to connect with millennials on their own terms. Each experience must be designed to reflect the values, behaviours and aspirations of these FOMO-fearing shoppers. Because FOMO is here to stay. It’s simply time to learn how to benefit from it and to create connections that last beyond the next promotion or offer.
Retailers can tap into this rapidly expanding opportunity by considering their audiences values, finding where they gather, and becoming an active, engaged part of their community.
Otherwise, I fear it’s retailers who will be missing out.