Retail for the Millennials – How Do They Purchase and What Do They Really Want


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Retailers, like many industries, have been focused for some time now on understanding, targeting, and converting millennial shoppers. They are tech-savvy, social, and mobile. This is nothing new – we have heard this before, but what does this really mean when it comes to their shopping habits? What really drives brand loyalty or how do you get this generation to become advocated for your brand? And ultimately, why would they choose you over your competitors?

Millennial Shopping Habits

A recent study by Hanover Research took a hard look at this generation’s shopping habits and found some interesting insights:

  • They continue to spend despite economic recession. Only 20% of millennials reported spending less on apparel, vs. 32% of non-millennials.
  • They live in the moment and make last minute decisions. Millennials are labeled with a “buy now, deal with it later” mantra. In one survey, 52% of millennials were more likely to make impulse purchases than any other generation.
  • They use smartphones for purchases. 50% of millennials use mobile devices to research products and reviews while only 21% of non-millennials do the same.
  • They don’ see privacy as a concern. 56% of millennials are willing to share their location in order to receive coupons from nearby businesses. Only 42% of those 35 and older say they would do the same.
  • They are more brand loyal than their parents. 78% of millennials are more likely to select a brand with a loyalty/reward program than a brand without one.
    Retail Marketing Millennial

Another study by Blackhawk Engagement Solutions, examined the millennials path to purchase. The study gave further confirmation to the fact that millennial shoppers are plugged into mobile and social shopping, completely disrupting traditional shopping channels. Study findings indicated that:

  • Smartphones are a dominant method of connection to the web for millennials, with 89% of them using the devices to connect, vs. 75% who use laptops, 45% tablets and 37% desktop computers.
  • 95% of millennial respondents said they have more or the same sensitivity to price as last year. Additionally, price has the greatest influence on millennials’ purchase decisions above all other factors, including quality, brand, store and availability.
  • Amazon (46%) and Google (43%) dominate millennials’ preference for price comparison activities.
  • 88% of millennials say they would consider buying online and picking up in store to save $10 on a $50 item.
  • Millennials are sensitive to cyber security issues and identity fraud, and 64% of millennials believe that gift cards are safer to use online than any other digital payment method. Moreover, 66% believe gift cards limit identity fraud.
  • 69% of millennial shoppers belong to a retail loyalty program, and 70% of those are happy with their programs.

What do Millennials Really Want from Retailers?

There are eighty million millennials in America alone and they represent about a fourth of the entire population, with $200 billion in annual buying power. So figuring out what millennial really want from brands is the million dollar question – or rather the $200 billion dollar question.

Here’s a look at 10 ways to make your brand a millennial favorite.

Millennials are setting new trends for in retail shopping. And while many of these shopping habits may not be new news for larger retailers, it’s good to be reminded that understanding who the millennials are and what they want is important to attracting and engaging with this generation who wields a tremendous percentage of spending power.

Skip the advertising.

Only 1% of millennials surveyed said that an advertisement would make them trust a brand more. Millennials do not believe that advertising is authentic and they regularly skip commercials and avoid banner advertisements on Facebook or other websites.

Use authentic and personalized content.

33% of millennials rely on blogs before they make a purchase as compared to fewer than 3% for TV news, magazines and books. They are particularly attracted to content written by their peers so encourage brand reviews, personal stories, and video or picture submissions to feature through multiple channels, such as in email, Instagram, Facebook, or websites. Millennials connect best with people over logos.

Social engagement equals brand loyalty.

According to Forbes, 62% of millennials say that if a brand engages with them on social networks, they are more likely to become a loyal customer. This doesn’t mean simply having a social presence but rather using social networks to engage in conversations, respond to conversations, and show the human side of your brand. Millennials seek out retailers on social who care to get to know their customers versus simply promoting the next sale.

Millennials value bargains.

This generation values bargains and are more price sensitive than other generations. A survey of more than 13,000 e-commerce shoppers by Bizrate Insights found that millennials are by far the most price-sensitive with low pricing driving their choice of retailer. (So this doesn’t mean you shouldn’t promote your sales on social media, just vary your content with posts that also showcase your brand as authentic.) They love coupons and targeted promotions, with 68% stating that coupons influence their purchase decisions, especially if these coupons are scannable via their mobile devices.

Get mobile and use apps.

Consumers across generations are using their mobile devices more so than ever across the retail purchase journey. 50% of millennials use their mobile devices to browse and review products. According to an article by Clearbridge Mobile, “With m-commerce becoming more pervasive and limitations in mobile web being realized, many retailers are turning to the development of native mobile apps. The major advantage is the ability to provide personalized, social shopping experiences – something that is piquing millennials interest, according to a recent survey by Kyle Wong for Forbes.”

Additional finding from the survey indicate that:

  • Almost half of millennials downloaded a shopping app on their phone
  • 54% like these types of apps because the experience is better than mobile sites
  • 27% shop using apps to take advantage of exclusive offers and discounts

Be socially responsible and give back to society.

75% of millennials said that it’s either fairly or very important that a company gives back to society instead of just making a profit. According to findings from the 2015 Cone Communications Millennial CSR Study, “More than nine-in-10 Millennials would switch brands to one associated with a cause (91% vs. 85% U.S. average), and two-thirds use social media to engage around CSR (66% vs. 53% U.S. average).”

The study also finds that “Millennials say they are prepared to make personal sacrifices to make an impact on issues they care about, whether that’s paying more for a product (70% vs. 66% US average), sharing products rather than buying (66% vs. 56%) or taking a pay cut to work for a responsible company (62% vs. 56%).”

Use loyalty programs as part of your millennial marketing efforts.

Around 95% of millennials would appreciate if their brands would actively make an effort to reach out and send them material via email such as coupons and discount notices. However, they are looking for more than just your typical loyalty program. In a COLLOQUY-sponsored nationwide survey of 1,000 U.S. consumers, 34% of millennials said the word that best describes their participation in a customer reward program is “fun.” By comparison, 26% of the general population (18 to 65 years and over) chose the word “fun,” meaning millennials scored 24% higher on the loyalty-needs-to-be-fun meter.

Addition survey findings revealed that:

  • 63% of millennials said they had joined a program within the past year, versus 55% of the general population, a 13% difference.
  • 25% of millennials said they joined a program in the past year because it offered access to members-only events, versus 16% of the general population, a 36% difference.
  • 40% of millennials said they joined a program for access to members-only sales, products and services, versus 33% of the general population, an 18% difference.
  • 63% of millennials said it’s important that their loyalty program participation supports lifestyle preferences such as wellness programs, sustainability efforts or a charity, versus 53% of Gen X’ers (35-50) and 46% of baby boomers (51 and over), differences of 16% and 27%, respectively.

Encourage product feedback and involvement.

42% of millennials said they are interested in helping companies develop future products and services. They want to be more involved in how products are created and be able to share ideas for product improvements or new products. Retailers would do well to encourage this type of participation. Consider using online surveys and community engagement strategies such as posting questions on Facebook or Twitter to encourage product feedback. Another effective strategy is to use polls after product launch asking questions such as, “Did we get it right?” to encourage additional engagement and product feedback.

Create seamless shopping experiences.

Millennials may do a lot of their shopping online and across mobile, but brick-and-mortar stores continue to have a huge appeal for many in this generation. However, the way they finally get to your store is more often than not, after checking out reviews or bargains online. A typical purchase journey may include searching for a good deal online, heading to the physical store location to purchase the product and scanning a coupon on their phone at check out. Integration of mobile, online, and physical locations to create a seamless shopping experience is important to not all the millennials, but generations of any age.

Collect and use data for personalized messaging.

Millennials are willing to share private information in exchange for benefits – 56% would share their location for a discount. They expect you to collect and use their information to provide product recommendations and personalized experiences. This also requires analytics to analyze all the data being collected. For example, Amazon is a prime example of a retailer who uses data and analytics to build deep relationships with their customers by getting to “know” them. This is a generation of consumers who expect retailers to know what they want, even before they do.
Millennials are setting new trends for in retail shopping. And while many of these shopping habits may not be new news for larger retailers, it’s good to be reminded that understanding who the millennials are and what they want is important to attracting and engaging with this generation who wields a tremendous percentage of spending power.

To learn more about using data-driven marketing solutions in retail, download our Retail Marketing Data Solutions and Strategy Guide.

Larisa Bedgood
As Director of Marketing for DataMentors, I have a deep understanding of today's data-driven marketing environment, including key components such as Data Quality, Business Intelligence, and Data-as-a-Service (DaaS). I manage and coordinate all marketing functions, including lead generation goals, event and project management, and corporate communications.


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