There’s been much talk about millennials, as a figurative ‘pot of gold’ for tech-savvy retailers. With reports citing an annual spend of around $600 billion a year, millennials are a hot target for many businesses in 2017. But converting interest to sales is not as simple as curating a great Instagram feed and tailoring your hashtag library. With a population born during the 1980′s in an age of the GFC, recession and high unemployment, millennials are more financially cautious than Baby Boomers and Generation X. We look at the way they buy, and how you can tap into this significant ecommerce segment.
Millennials are smart – smart-phone native, and smart in their purchase decisions. With 85% of 18 to 34 year olds in the US owning smart phones, and the average millennial checking their phone over 150 times a day, your business needs to be responsive, social and interactive if you intend to attract this group.
But more than this, millennials are economically savvy. The hunt for a deal, the impact of a flash sale, the search for customer reviews and the benefit of a loyalty program are key elements of their customer journey. Strategic retailers can focus on BillPro’s top five Factors for influencing millennial sales to boost conversion rates:
1. Price is key
This market is used to shopping online, switching between sites to hunt for the best deal, the free gift or the exclusive coupon. Millennials are renowned for “window-shopping” – abandoned carts are such a part of the millennial shopping experience that memes have been created around the theme. Recognising price sensitivity, smart retailers can offer added value – such as loyalty programs, exclusive social / email offers or Refer a Friend campaigns.
2. Reviews and research are critical
72% of millennials research their options online before browsing instore, and this market, more than any other, trust the opinions of friends and strangers in making purchase decisions. Customer reviews are critical for this audience in evaluating offers and products (for more on turning customer reviews into sales, read our Insights blog post).
3. Trust issues
37% of millennials have ‘trust issues’ with big corporations, giving independent retailers a leading edge. Authenticity is a central theme for millennial loyalty – encapsulating everything from imagery to influencer marketing to sales offers and consistency of brand voice. Millennials expect to engage with brands and interact at a deeper level – having a voice in product development, expecting personalised (and immediate) customer service and providing a strong feedback loop to influence the way brands sell in line with customer preference (such as payment options, in-app ecommerce platforms and seamless omnichannel purchase experiences).
Over a third of millennials actively seek online FAQs to answer purchasing questions, preferring self-service over direct contact with customer service representatives. Ensure you empower your customers to find what they need, when they need it, through UX-focused web design, mobile-friendly navigation and multiple contact channels, from LiveChat to social media, to email and traditional channels.
4. Socially conscious
They are an exceptionally diverse – and inclusive – group of young adults. In the US, approximately 75% support same-sex marriage, more than any other generation. Social, political and economic inequality are strong triggers for this market, and they are more willing to purchase from brands and products associated with a social cause.
Further, millennials don’t solely want to buy products – they seek experiences, with 78% of millennials choosing to spend money on a desirable experience rather than a product. Brands that understand their product is the gateway to a user experience, lifestyle or community set the stage for lasting engagement, loyalty and new customer recruitment. Witness Australian fitness personality Kayla Itsines, who turned a 28 day online fitness program into a global movement with hashtags such as #KaylasArmy and #BBG (Bikini Body Guide) generating 1.9 million and 5.1 million Instagram posts respectively, along with a supplementary (and monetised) range of products, events and collaborations.
5. Socially active
For an audience as fluent in social platforms as their native spoken language, it makes sense that social media is critical in researching, validating, comparing and finally buying goods and services. Brands can tap into both the ‘authenticity’ trigger and the ‘social relevance’ trigger through reposting user-generated content.
A recent study of 25 major brands showed that on average, over a one-month period, 69% of the top three photos shared on Instagram by brands were user-generated. The takeaway for retailers? Turn content into commerce – tap into brand relevant social influencers, repost great user content, run competitions and promotions to attract attention and generate even more content, and ensure you are socially active, responsive and engaging.
To close the generation gap, retailers need to adopt a digital-first philosophy, meeting millennials in their space, and adapting traditional selling methods to meet their key triggers of authenticity, social responsibility, price competitiveness and brand interaction. This can be the key to tapping that ecommerce ‘pot of gold’ and creating lasting brand loyalty throughout the millennials’ customer lifecycle.