Millennials are the roughly 65 million Americans between the ages of 18 and 34, a coveted demographic for brands and merchants. They spend a lot of money, even if they have little discretionary income. See “Ecommerce Merchants Should Not Ignore Older Shoppers,” my recent article, for additional information on the relationship between baby boomers and Millennials.
Characteristics of Millennials
Most Millennials are college-educated. They have an unemployment rate in excess of 15 percent — counting those who have dropped out of the labor force and are no longer looking for work. A substantial number are underemployed, working only part-time. Yet their spending habits do not reflect their financial reality. Most are not interested in saving.
While Millennials spend heavily on clothing, food, electronics, and entertainment, they often have little interest in owning houses or automobiles. Online shopping is certainly more convenient than purchasing at brick and mortar stores if one does not own a vehicle and Millennials are very comfortable doing a substantial amount of purchasing online.
Fifty two percent of them are more likely to make an impulse purchase than older shoppers, according to Hanover Research. Seventy eight percent of Millennials are more likely to select a merchant with a loyalty program than one without such a perk. Though many brand manufacturers and retailers fret that Millennials exhibit no brand loyalty, these shoppers will continue to show interest in a brand that continually rewards them. It also helps if their friends and influencers provide buzz on social media sites about a particular brand.
Millennials are typically voracious users of coupons and always look for deals before purchasing. “Millennial shoppers have the lowest shopping conversion rate because they are the most selective as well as the most economically challenged,” according to Marshal Cohen, chief industry analyst of The NPD Group, which published a study on millennial shopping this summer.
Mobile devices and social media are an integral part of their lives and they rely heavily on both for product and price information. According to a survey conducted by Research Now, 58 percent of millennial respondents acknowledged engaging in showrooming, nearly 10 percent more than older shoppers. And over 19 percent of millennial shoppers have been in a store and purchased an item via their mobile phone from a different retailer while still in the store, twice the rate of all other respondents.
According to the Google 2013 Holiday Shopping Intentions Study conducted in September 2013, 95 percent of Millennials planned to use the Internet as a holiday shopping resource and 88 percent of all Millennial smartphone owners planned to use their devices for holiday shopping this year (versus 67 percent of smartphone owners over age 35). Millennials both research and purchase via mobile devices at a higher rate than older shoppers.
6 Tips for Merchants
- Millennials desire a seamless shopping experience so make sure your site design accommodates the same screen on all devices.
- Don’t spend money on television or print advertising. These media are mostly ignored by Millennials.
- As for social media, don’t rely solely on Facebook. Have a presence on all social media platforms. According to a study of female millennial shoppers, performed by Edison Research in November for social media solution provider NetBase, while Facebook is the most consulted social platform, it does not have the most influence over buying decisions. Blogs and message boards are most influential, followed by Pinterest and then Facebook, Instagram, and Twitter. Eighty three percent of 18 to 24 year olds say they consult at least one social media platform before purchasing a fashion item according to the Edison study.
- Provide plentiful information. Millennials don’t purchase without doing substantial research and, because they are underemployed, they have the time to browse.
- Make your marketing efforts visual. Millennials prefer visuals, especially in the accessory and clothing categories.
- Millennials want to feel special. They want brand manufacturers and retailers to court them. You can do that with promotions that show you are aware of their product interests. Personalized coupons and emails can make Millennials feel connected to a retail brand.