Facing a changing consumer, Barnes & Noble College transforms stores into high-touch engagement points

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Just as millennials caused retailers to make dramatic shifts in how they operate, Generation Z will be no different, says Lisa Malat, chief operating officer of Barnes & Noble College. Broadly speaking, members of Gen Z were born around 1995 through 2012. The youngest are in elementary school while the oldest have graduated from college.

With 1,400 campus bookstores across the United States, B&N College has a front-row seat to the retail preferences of changing demographics — much of its consumer base changes every four or five years.

“Because of their desire and pressure to be unique, to put a stamp on their own brand, [Gen Z is] looking to retailers and manufacturers and brands that they support to be aligned with their values,” Malat says. “They want the companies they do business with to be relevant and aligned with their own values and to feel that they can make a product unique.”

That means ensuring each store is “reflective of the individual markets we serve,” Malat says. “In Chicago, for instance, we serve a number of different colleges and universities, but we need to make sure we reflect the experiences of that specific college. We have to make sure each location is highly customized.”

CHANGING DELIVERY

It’s not just the consumer that has changed. The entire college experience has shifted with digital textbooks and online learning. For B&N College, that means refocusing on the underlying goal. “We’re all about student success and making sure the students have everything they need to learn and be successful on the first day of class,” Malat says. “As the industry has shifted to digital, it pushed us to adapt and innovate faster and develop new products and services that will serve the markets in new ways.”

In 2016, the company developed a proprietary digital system for students that’s immersive and interactive, providing progress indicators, test questions and videos to students and instructors, “so faculty can see how a student is progressing and where they’re getting stuck.” The cost is about $25 per course per semester, addressing another issue of concern to Gen Z: affordability.

Physical textbooks remain the top preference, but “that is rapidly changing,” Malat says. The company has developed what it calls “inclusive access,” which delivers all learning materials to students digitally. “That’s not just about a digital textbook or e-book or PDF. This is really about seamlessly delivering the content so the students are prepared to learn.”

With less space needed for physical textbooks, B&N College has reimagined its retail locations into what Malat calls “dynamic, interactive hubs.” That means more than 3,000 local events in stores, beginning with when students get acceptance letters.

“We welcome the new students in our stores so they can get what they need and have fun and met their peers,” Malat says. “We take this through to events that we host, holiday parties, graduation, tailgates. These events not only help us build that bond and relationship with our consumers, but they’re also a large driver of revenue. Students are coming in, feeling welcomed and seeing products they need to succeed.”

When done right, bricks-and-mortar retail can draw in Gen Z, Malat says. “Although this generation grew up online, they value rich in-person experiences that round out their lives and learning opportunities. Many look to retail environments in this light and choose to shop in-person with friends or chat with them digitally while they shop.”

It’s not just college bookstores; she points to athletic clothing retailer Athleta, which hosts yoga classes and wellness events along with the exercise wear it sells. “Retailers need to think of it from a lifestyle perspective, not just a commodity. The commodity they can get online,” Malat says.

“Success is in identifying the need and producing the exclusive product. That’s the draw of bricks-and-mortar, to deliver that experience that aligns with their values and lifestyles.”

The bookstore has become something of a campus hub, where more than books, pencils and spirit wear can be purchased. “We’re highly focused on what’s most meaningful to our students today,” Malat says. That means wellness, technology, a beauty shop within the stores and, of course, Starbucks cafés. Study areas, learning labs and study tools and products also are on the agenda.

“We’ve given them an opportunity to learn about and engage with these study resources, to meet up with their professors and study groups, creating this sense of community within the four walls of our bookstore.”

LESSONS LEARNED

If B&N College is at the forefront of serving the next generation of shoppers, some of what the company has learned might be useful to other retailers, particularly as Gen Z enters the workforce. “Retailers have to make sure that they are accessing this demographic through multiple channels,” Malat says, pointing to research about consumers using multiple channels before making a purchase. “I have to imagine for Gen Z it’s even more intense. Retailers have to make sure the messages pulse through consistently to get through.”

Those messages do need to land appropriately. The company has a “really robust” panel of students who share opinions about themselves, what products they want to see in the stores and how certain creative approaches work.

“We don’t do anything without having their voices in our head,” Malat says; Barnes & Noble also has advisory panels of alumni and parents. “To have the consumer voice in your head as you navigate the transformational time not just in retail, but in education, which is our other market — we’re at that intersection of education and retail, both going through huge transformation.”

And remember, it’s not just a one-way conversation. A key hallmark of Gen Z is a desire to have their voices heard — and to effect change. “All the feedback that we receive, we report back on,” Malat says. “They want to know that we heard them. That goes back to their core value of change, to feel like they’re agents of change.”

Sandy Smith grew up working in her family’s grocery store, where the only handheld was a pricemarker with labels.

Meet Generation Z

Barnes & Noble College, which operates 1,400 campus bookstores nationwide, has probably spent as much time talking to Generation Z as anyone. The company regularly uses a panel of 10,000 students (and 5,000 parents) for feedback and inspiration. It also hosts conversations on college campuses and conducted an online quantitative survey asking 1,500 Gen Z college students about who they are as individuals, digging into their values, aspirations, struggles and how they look at life and themselves.

Lisa Malat, chief operating officer of B&N College, identifies three big trends the research revealed.

Identity. “They have a strong sense of who they are as individuals, as a generation. They define themselves by kindness and empathy and individualism. They have a strong belief in themselves and their potential to do anything.”

Empowered. “They found the power in their voices at a young age with social media, and 70 percent say they’re not afraid to share what they believe in. They use social media as a great connector. It allows them to interact and engage across the world.”

Aware. “Because of social media, they were connected at an earlier age to understand what’s going on a national and international stage. With that comes a certain amount of stress. What’s happening in the world is top of mind for them in many ways because they are so aware. Because of that, they really have this strong sense of responsibility to be global citizens, to see what they can do to address national and global issues.”

Other key findings:

• 91 percent believe everyone is equal and should be treated that way
• 53 percent say they are open minded
• 37 percent say they are driven
• 32 percent say they are leaders
• 45 percent say the nation is worse because of the mistakes and negligence of previous generations. They believe their generation must address racism and prejudice, gun control, cost of college and global warming
• 68 percent believe their individual voice can effect change
• 57 percent say social media has helped expose them to different kinds of people

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