“A millennial will let any little differentiator impact their buying decision. They will not rest until they find the perfect item,” said Gerald Tempton, president of Liquidation Channel. And with millenials representing about 80 million Americans, spending upwards of $600 billion a year, they are a group that businesses are zeroing in on. Millennials are being studied as much as their parent’s generation—the baby boomers. It is no wonder why. They are an incredibly influential demographic, and businesses that want to stick around need to tune into their shopping habits.
Tempton, Liquidation Channel president, said that the way millennials make their buying decisions is very different from past generations. With such rapidly changing technology, combined with increased buying power, these younger adults are a shopping force to be reckoned with. But businesses can only profit from millennials if they can keep them interested long enough to make a purchase. NPD Group, Accenture, alongside the Shullman Research Center recently explored what is driving these shoppers.
Time reports that Marshal Cohen, the chief industry analyst for the group, referred to millennials as the “most exclusive generation, and the most challenging to keep engaged.” He adds that these shoppers are the most selective set of consumers, as well as the most “economically challenged.” As such, they will shop until they find exactly what they are looking for, and are not likely to settle for anything less.
In light of this unique shopping habit, retailers are seeking out ways to continually engage millennials. Tempton of Liquidation Channel explored the latest reports and offers some crucial insight on keeping this powerful group interested and ready to purchase.
They like to shop. Just because they are selective, this does not mean millennials do not enjoy shopping. Rather, the opposite is true. Nearly 60 percent of consumers between 18 and 33 reported that they “love to shop,” as compared with only 40 percent of adults at large. The report showed that this demographic is more inclined to purchase goods online than their older counterparts. However, millennials also enjoy visiting stores in person.
They are loyal. Accenture’s study reveals that approximately 40 percent of retail industry leader respondents said that their primary concern was millennials’ lack of loyalty. However, the group found that this demographic has the potential to become fantastically loyal shoppers if they have been treated well. These shoppers require a consumer-focused experience. Every step of the process must be tailored to their desires and needs.
“There is [something] about the product and its cost, but there’s also a big part about being treated like a valued customer,” one shopper told Accenture.
At least 95 percent of millennials want their preferred brands to actively court them. They want coupons sent to them directly. They want to feel important. Even more, 97 percent of millennials say that receiving a discount before shopping would influence them to return to that retailer in the future.
They use mobile. Last holiday season, retailers like Liquidation Channel turned their sights to millennials, knowing they would be a strong source of revenue during the biggest shopping season of the year. In fact, Google reported that 88 percent of all millennial smartphone users intended to use their device for their seasonal shopping. This is a big proportion, as compared to 76 percent of all other smartphone owners. Furthermore, one in three millennials planned to make purchases on their phone, which is a near 30 percent increase from 2012.
In addition, Accenture revealed that mobile channels also have an impact on more than 50 percent of respondents in terms of how they choose to shop.
“Mobile is huge in how they buy. Mobile is absolutely the future of retail,” said Mr. Tempton of Liquidation Channel.
He said these changing trends and emphasizes the importance of making mobile shopping not only available, but also easy, intuitive, and consumer-centric. Since this group wants to be catered to, retailers must develop strategies to make mobile both accessible and simple to use. It needs to feel like the shopping experience was made for them, wherever they are.
“Online commerce is still a smaller portion of total holiday sales for many retailers, but it’s growing, particularly on mobile,” reported Google retail industry director, Scott Falzone.
His study revealed that both online purchasing, as well as online research, conducted on mobile devices was expected to boom in 2013, as compared to 2012.
They like luxuries. Affluent millennials love to shop and are fairly loyal to the brands they do business with. Even more good news for retailers—especially luxury brands—is that among adults with household incomes of at least $75,000, millennials were more likely than older generations to purchase luxury services and goods in the past year. Millenials with large amounts of disposable income also plan to make more luxury purchases in the next year.
To tap into this powerful demographic, retailers must absolutely cater to the needs and shopping habits of millennials. In light of this, Tempton of Liquidation Channel urgesd retailers to reassess their purchase funnels and marketing plans to make shopping more consumer-friendly, more enticing, and much more mobile.