The last few years have been tough on J.Crew. Sales have slipped consistently, and only showed slight signs of improvement last quarter, mostly driven by J.Crew’s sub-brand, Madewell.
Meanwhile, the brand carries a heavy debt load, and has been a consistent feature on lists of once powerful brands now facing the possible risk of bankruptcy.
J.Crew, however, is not content to go down without a fight. Now under new management, the brand has been making big changes as it tries to hit the reset button. The stated goal, according to new CEO Jim Brett, is for the brand to build back its audience, particularly among millennial shoppers.
“You can’t be one price. You can’t be one aesthetic. You can’t be one fit,” Brett said, of the brand’s newly developed, more expansive purview.
The new “more is more” attitude has been mostly visible in two regards. The more publicized of the two is centered around styling. J.Crew is ditching the quirky/preppy look that has recently defined the brand in favor of offering a wider selection of look-types.
But less noted, though perhaps more noteworthy, the retailer is also thinking broadly when it comes to channels, as it has recently announced that will sell a limited assortment of items coming from its J.Crew Mercantile line of less-expensive clothes, about 2 percent of the brand’s total selection.
Teaming up with another retailer is not wholly new ground – some J.Crew and Madewell items are already on sale, and a partnership with Hudson Bay has already been announced. But the move is eye-catching, particularly since Amazon has spent much of the last year leveling up its apparel sales machine, particularly around developing private-label offerings. For many in retail, selling on their site is still considered an opportunity to trade exposure for data, and to ultimately come out on the losing end of that deal.
But, as one looks at the data around the core demographic group J.Crew’s CEO says they are trying to lure, millennials – particularly the older, more financially established subgroup that PYMNTS calls bridge millennials – expanding across digital channels is a must, and Amazon is a particularly beloved digital channel.
The Bridge to the Next Generation of Commerce
When PYMNTS dove into the data on highly coveted and sought after millennial consumers about six months ago, a curious thing emerged about the generation – which, in some ways, is more like two generations than one.
The older half of the cohort, the bridge millennials group, are 30 to 40 years of age, are younger than Gen X-ers but older than most millennials, tend to have finished their educations (and tend to be more affluent and well-educated), have settled into stable careers and are beginning to check off life milestone markers like marriages, families and home buying. And they are incredibly mobile-connected, particularly when it comes to making purchasing choices.
And, as Karen Webster noted in a commentary on the rise of the bridge millennials – and what it will mean – merchants are not wrong to be a little obsessed with this group of consumers.
“We believe the bridge millennial is the bellwether for how connected commerce will evolve over the next five to 10 years,” Webster wrote. “We also think comprehending their behaviors today is critical for retailers.”
Bridge millennials spend a lot, and often – particularly when it comes to clothing and accessories, making 18-19 purchases a year and spending $2,225 a year on average. Gen X-ers are still outspending them at $2,367 a year, but not by much.
And, the data shows, they are not just spending more and more often, but they are also spending quite differently. They are most clearly the Amazon generation – 25 percent reported their preferred online shopping portal is always Amazon, and nearly one fifth noted that Amazon is their favorite apparel retailer.
Additionally, they are attracted very differently than consumers of the past. Loyalty and rewards offerings rank low on their list of priorities – very low – outdrawn by convenience, having the right product for sale and offering it at the right price. And when it comes to payments, the additional points, offerings and inducements tied to store-branded cards don’t have much in the way of appeal – debit, credit and PayPal all outdraw store cards among this consumer group, with debit having a particularly strong appeal.
“What seems clear is that the bridge millennial’s shopping behaviors and patterns, like her baby boomer parents and Gen X siblings before her, are already well-established. Clothing trends may come and go, but her digital shopping habits seem pretty predictable as more connected devices deliver more opportunities for bridge millennials and brands to connect," noted Webster.
And those connections, data indicates, are becoming increasingly important across a wide range of retail experiences.
The Mobile Millennial
Bridge millennials, unsurprisingly, are leading the charge when it comes to mobile transactions, with 17 percent reporting that they use their mobile phone to purchase clothing and accessories, and nearly half, 48 percent, reporting a preference for making their clothing and accessories purchases online.
Lest that lead one to conclude that bridge millennials don’t want to go to stores and that the world’s physical merchants need to pack up shop immediately, it bears noting that according to the data, that group likes going to the store just fine – to look at goods. Bridge millennials are the most dedicated showroomers, with 14 percent noting they go to retail locations to look but not buy, a habit among only 11 percent of consumers in other groups.
And, as the PYMNTS Paying at the Pump study showed, those mobile devices are actually quite crucial to drawing in the bridge millennial shopper for a deeper retail experience.
Bridge millennials spend a fair amount of their time at the gas pump: 64 percent report filling up at least once a week, and they also buy gas daily at twice the rate of other consumers, 12 percent compared to 6 percent.
And the mobile device is deeply embedded in that process: 39 percent use mobile apps to find the best gas prices, 31 percent use them to find gas stations and 21 percent use them to get directions. The ability to pay at the pump using an app also rates highly among this age demographic, with 70 percent reporting they consider it “very” or “extremely” important to be able to do so using an app. That enthusiasm, however, does not yet translate into very high use rates – only about 6 percent have actually used apps to pay for gas in the last 12 months.
More than what the apps do today, however, the data also indicates that mobile app usage could encourage bridge millennials to extend their shopping experiences beyond the gas pump. Specifically, the study found that 24 percent said they always pay for additional goods when using a smartphone app to purchase gas, compared to 18 percent of the sample, while 28 percent said they pay for other items most of the time, slightly more than the rest of the sample at 26 percent.
And gas stations enhanced by mobile are not the only places for which bridge millennials are developing an emerging fondness. They are also developing an affinity for shopping with the help of voice-enabled digital assistants: About 5 percent of bridge millennials report using a voice assistant when making purchases of clothing and/or deciding what to buy, which is roughly twice the rate of other demographic groups, though they show little to no enthusiasm for chatbots.
The Fickle Consumer – and the Construction Challenge
Perhaps the most striking good news/bad news piece of data about bridge millennials is the fact that 30 percent report having switched to or at least trying a new retailer in the last month. The good news part of that equation is that means millennials in general, and bridge millennials in particular, are out there willing to be wooed – and apparently more enthusiastic to try new things than the average consumer.
Good news for a player like J. Crew, which is rolling out a whole new look, as it is an audience that likes new things.
The bad news: They are an audience willing to be wooed, which means someone else offering a stickier, more creative, more multi-channel or more rewarding experience can turn this customer's head pretty quickly and easily. With perhaps more leverage to try new things, the attendant risk is missing the mark and losing the fickle bridge millennial customer without ever getting a second chance.