Millennials are becoming retailers’ largest demographic in both population size and market influence with significant buying power due to their constant access to technology. Over 85% of millennials own a smartphone compared to 71% of the total U.S. population, and their mobile-first experiences are set to reshape the economy and change the ways in which consumers trade. Already, a quarter of millennials recently surveyed report 100% of their online purchases were on smartphones — and marketers in retail are taking note, but in some cases, not fast enough.
Are Retailers Prepared for the Millennial Effect?
Shopping preferences of millennials are unique and often include a combination of both online and offline. So how can retailers win the hearts of millennials? There are many critical components but seven steps to success include:
1. Customer Journey It’s important to think about the holistic customer experience throughout the entire journey. Brands should focus on weaving in the journey, which integrates consumer touch points before, during and after the transaction has been completed.
2. Seamless Interactions It’s important to provide seamless online and in-store experiences. Millennials like to converse and interact with retailers across multiple platforms without disruption, and their expectations of in-store and online interactions are similar. Most millennials will research options online before heading into a store and they expect the various channels to complement each other with relevant and consistent communications, allowing them to easily execute their purchases.
3. Visual Effectiveness and GuidanceVisual effectiveness is crucial as this will drive the first contact and initial impact to consumers. Brands need to think carefully about how they present product details along with images, emojis, stickers, ads, etc. Personalization is key to generate loyalty and to help consumers discover the most relevant content, guiding them along the path to purchase.
4. Device Agnostic Creating a shopping experience which is optimized for any device is key as millennials are known to shop on a multitude of devices. A mobile-optimized site or a hybrid app which is responsive and can scale on any device is imperative. Providing a mobile-optimized checkout process is just as important as the responsive site. Traditional long checkout process will not resonate well with the tech-savvy millennials.
5. Social SharingMany millennials seek advice online, and enjoy declaring purchases and opinions through social media. Social media sharing is a key feature and even a necessity for millennials, providing a social sharing option as a core component of brand marketing will help drive adoption.
6. Geo-Targeting More than half of the millennial population allows location data on their mobile phones. The younger generation is more receptive to geo-targeting than any other demographic as it provides more relevant and contextual offers at a specific instance.
7. Loyalty Programs and Coupons Millennials are heavy users of coupons and are always on the lookout for deals. Apart from coupons, loyalty programs are a major consideration for retailers to implement to keep them bound to a brand.
The Road Ahead
In order to remain competitive in the retail landscape, retailers will need to cater to the spending habits and tendencies of millennials. Accenture estimates that millennials in the U.S. spend approximately $600 billion a year, a number that will rise to $1.4 trillion, or 30% of total retail sales volume, by 2020. Born in the unique world of technology disruptions, this mobile-first generation has distinct media and shopping habits and it is poised to create a tidal shift in the retail industry. Their access to mobile devices, impulse buying behavior, coupled with purchasing power, greatly influence what, how, and where they purchase.
Retailers have a golden opportunity to tap into these patterns by understanding millennial shopping habits and by focusing their efforts on customer retention. Brands and retailers who fail to capture the millennial attention and loyalty today will be missing out on this evident trend and could impact business success in the near future.