How to prepare for the consumers of 2020

The drastic change in demographics that will take place over the next five years will greatly change the workforce as well as the consumer base. At AGTA GemFair, one expert shared 12 tips on how to understand and adapt.

Brecken Branstrator brecken.branstrator@nationaljeweler.com

Tucson, Ariz.--In five years, more than one-fourth of the population will be between the ages of 20 and 34, half of them will be women, and a growing number will be multi-racial or multi-cultural.

This demographic change means that not only is the workforce changing, but the target consumer groups and the way they are shopping and being targeted by retailers is shifting.

In an education sessions held at the AGTA GemFair Wednesday, Kate Peterson (of Performance Concepts but for the Diamond Council of America) discussed the changes that jewelers will see over the next half-decade and what it means for their business.

Here are the trends and prediction Peterson gave for what the workforce will look like by 2020, what it means for retailers, and how they can adapt.

1. It will be more diverse. Sixty-three percent of workers will be white while 20 percent will be Latino, and 50 percent will be female by the year 2020. Additionally, for the first time there will be four or even five generations working together at once.

What this means for retailers is that there will be new challenges in recruiting, training and engaging those various groups. The good news is that employers that leverage the wide variety and diverse backgrounds for a broad exchange of ideas and knowledge could see significant payoffs, Peterson said.

2. There will be more corporate social responsibility. In the future, even more emphasis will be placed on the importance of people and the planet. What this means for retailers that decide to actively participate in the community is that not only will the efforts benefit their local towns and cities, but also will help in recruiting efforts since so many job seekers gravitate toward companies that are socially responsible.

3. Businesses will rely more on social technology. With the rise and increasing importance of social networks and communication tools, there are even more ways for businesses to facilitate communication, learning and collaboration within and even across businesses.

As an example of a business doing it the right way Peterson told of a retailer who set up one-on-one Skype conferences between its best clients and a designer in the weeks before he was coming to the store for a trunk show. The conversations allowed the designer to get a better idea of what to bring and the types of clients they were

Banner will be right here …

selling to, creating a highly personalized experience that turned many people into buyers.

4. Workplaces will become increasingly more mobile. The rise of the smartphone means that it is easier for employees to work no matter where they are, and for employers to offer more flexible schedules. At the same time, this also can blur the line between work and personal lives. Employers need to make sure that they are offering their employees enough time away from their work and detached from technology so that they don’t get burnt out, Peterson said.

5. There will be a talent shortage. There’s a large gap between the number of people exiting the workforce and those entering. What this means is that many employers still are having trouble finding the perfect fit for their position, placing greater demand on them to train, develop and mentor to build and retain leaders for the future.

6. Different kinds of mentoring will arise. While successful companies will continue to use one-on-one mentoring, they also will look at different ways of guiding employees, such as reverse mentoring, which uses a new employee to talk about their shopping habits, ways of looking at things, etc. so management can also learn from them; and group mentoring, where training among different tasks is split up among multiple people.

It will be increasingly important for companies to offer this kind of learning as the talent shortage grows.

7. Employees will expect the democratization of information. They will be looking for more transparency at the companies they work for and to be a part of the process. This means that there’s more accountability on management’s end to put the business’s values and practices into place. “The payoff is much bigger than the risk,” Peterson said.

8. Personal branding will only grow. As more people use social networks and the Internet to build their own personal brand and messages, this will mean “bigger personalities” in the workplace. But this also can provide a good way to recruit talent, as well as build a company’s own personal brand.

And here is what the consumers of 2020 will be looking for, according to Peterson.

1. Custom will be king. “The ability to personalize will be among the most important purchase drivers,” she said. Being able to make custom pieces also makes it harder for the major retailers to compete.

2. They will expect “fast-laning.” Why is Amazon Prime so popular? Because consumers want the fastest and most convenient means to an end. For shoppers at a retail store, they also will expect preferential treatment when it comes to administrative tasks. Stores need to ask themselves what they've got on-site to make things easier for their best clients.

Along the same lines, consumers will be more comfortable engaging with technology and machines at the store, which can be beneficial on both ends--allowing store employees to spend their valuable time on more important tasks. One example Peterson gave was installing a credit kiosk in the jewelry store.

3. Non-cash payments will reign. No, this doesn't mean checks or even debit and credit cards. Mobile payments, like Apply Pay, are the way of the future. Making it easier for clients to split payments can also increase the odds of closing a sale, particularly when it comes to bridal or gifts. Check out Venmo for this. “Be ahead of the curve, not behind it,” Peterson added.

4. Appeal to currencies of change. Wanting to self-improve is natural, even if there often can be a gap between reality and desires. Instead of offering generic sales and promotions, why not offer personalized rewards and incentives that will speak to the consumers this way, such as a Fitbit with purchase instead of an iPad? Offering a more personal experience that helps them achieve their goals will only strengthen the relationship with the client.

Brecken Branstratoris the senior editor, gemstones at National Jeweler, covering sourcing, pricing and other developments in the colored stone sector.