The Millennial Buyer: Do You Really Know Her?
There are more than 83 million Millennials (which today includes those in their 20s and 30s) in the U.S. alone, and each year they spend approximately $600 billion. While Millennials are already a massive consumer base, their significance in the retail world will continue to grow as their projected spend in the U.S. is set to increase to $1.4 trillion by 2020 (that's 30 percent of total retail sales!).
Disregarding the Millennial shopper is not an option and neither is resisting the trends they’ve come to demand and expect during their shopping experience. In fact, when Millennial customers have a great experience, they’re willing to pay more – up to a 16 percent price premium. So retailers think about future investments, there is no greater opportunity than reimagining the in-store experience given 50 percent of millennials consider in-store shopping as their preferred method.
Even direct-to-consumer (DTC) brands and e-commerce first retailers understand the importance of a physical store. These online first retailers and brands are projected to open roughly 850 physical stores within the next 5 years. And pop-up shops now generate nearly $80 billion a year.
Whether it’s a traditional retailer or an emerging online DTC brand, here are three areas of improvement today’s merchants should consider as they look to appeal to Millennials and grow their sales:
Make the Checkout Quick, Easy and Self Sufficient
Millennials are attached to their phones, and therefore, retailers must update their POS systems to incorporate easy tap and pay functionalities tied to mobile wallets. More than 40 percent of Millennials have completed an in-store transaction with their mobile device, and we can only expect this trend to rise as mobile wallets become more evolved. However, Millennials also want to go at it alone - the checkout process that is. More than half of Millennials use self-service checkouts at brick-and-mortar stores, and only 7 percent said they were uninterested in ever using the technology. Conclusion: never forget the K.I.S.S. mantra.
Reward their Loyalty but Stop with Points
It’s clear: Millennials appreciate a good reward. In fact, nearly 90 percent are more likely to shop somewhere that offers a reward and 80% of Millennials find the process of seeking out deals and discounts exciting. While some retailers still rely on programs centered around points and stars, we’ve found that consumers really just want more cash. Credit cards iconized the cash back movement, but 73 percent of Millennials think their credit card doesn’t give enough cash back. What does that mean for retailers? It presents a great opportunity to win over Millennials’ hearts (and wallets).
Embrace Mobile to Instore: For Shoppers and Employees
Advancements in smartphone technology has increasingly blurred the lines between instore and online, which influences Millennial shopping habits and preferences. These shoppers want a uniformed approach between online and instore and they want their phones to serve as the connector. 83 percent of Millennials use their smartphone to find useful content before making purchasing decisions and 40 percent of Millennials refer to online reviews and testimonials before committing to a sale. However, mobile is not just for the shopper; it's for employees as well. In fact, 53 percent of Millennial customers don’t think store associates have the tools they need to provide great customer service, such as mobile devices for looking up customer profiles and recommending products. How does this impact retailers? It creates a fractured and lackluster in-store shopping experience.
The retailers and brands that learn how to adapt and win over Millennial hearts will be those that thrive over the next two decades. And those that do it sooner will reap the benefits of a longstanding and loyal customer base that, as mentioned previously, are expected to spend $1.4 trillion next year alone.