Avgol outlines fundamental retail shift of Gen Y
Avgol, a global leader in the manufacture of high-performance nonwoven fabric solutions, has explored how the nonwoven hygiene supply chain has adapted to the changing buying habits of Millennial ('Generation Y') consumers.
As the millennial market moves into prime spending years and retail practices evolve to adapt, Avgol has identified six key motivators for engaging the core Generation Y demographic.
Nick Carter, Director of Market Business Intelligence at Avgol, commented: “We’re seeing the emergence of industry trends that have fundamentally shifted the world of retail, including in the hygiene product category. Retailers and brands today do not just have to meet product functionality requirements, the market is now largely value-driven. Everything filters down from core brand positioning.”
Following research from leading business intelligence agency Accenture, which identified that millennials now account for almost a third of all retail purchases, Avgol has looked at how changing buying habits have impacted the hygiene supply chain from substrate to the retail store.
“It’s important to note the change in marketing focus to reflect the shifting consumer mindset,” continued Nick. “Products, such as diapers, now have to meet value-based needs, as opposed to purely functional requirements, meaning the market must continue to drive development and encompass innovation.”
In the findings, Avgol highlighted the key values of convenience, choice, value, sustainability, innovation and experience, as buyer ideals that have fundamentally changed the pattern of consumer behavior and ultimately, the retail landscape, as well as the supply chain that serves it.
A major pillar of modern-day convenience is wellness. As the buying public takes more care with their health and wellbeing on a holistic level, it has become an expectation that optimal wellness will be ingrained in product design from the outset. This has resulted in an innovation spike in the material substrate industry. To ensure built-in advantages to appeal to millennial consumers, hygiene product manufacturers are increasingly turning to materials that build these marketable qualities into the product construction at the earliest stage.
With brand switching now so common, a crowded marketplace has made it more difficult for brands to stand out. Technological advancement and innovation in nonwovens has been driven by the need to offer differentiation to the market, from the material stage onwards, with many brands and supply chains innovating in new areas to 'see what sticks'.
Avgol notes that the role of value has spurred change in pricing structures so that the focus is on adding quality and features to justify costings, rather than reducing costs from the outset.
Sustainability & Innovation
One hallmark of Generation Y is an increased interest in environmental causes - a key motivator when it comes to purchasing and brand loyalty. The real-time impact for the global hygiene market is that in order to flourish, the product has to be sustainably managed and honest, doing exactly what it claims to do.
Avgol identified that millennial customers do not want to purchase products, they want to purchase experiences. This becomes evident in the post-purchase stage and in the dissemination of information. Experience is the next major shift in marketing, spurred on by the demands of the market. Customers now become part of the brand through experience; they share thoughts, ideas and feedback. This value highlights the growing trend towards Marketing 4.0, where offline and online environments meet to form experience, and the hygiene industry is no exception.
In considering the impact of value-based purchasing on the hygiene product supply chain, Avgol hopes to encourage a deeper understanding of brand led decision-making, in order to keep the hygiene supply chain innovating and finding new ways to appeal to the growing millennial audience.