The millennial shopper has been characterized as an elusive being -- we know they exist, but we seem to have trouble catching them, at least for a prolonged period of time. Predicting their actions is an even greater challenge. As a result, retailers have formed a number of myths around millennial shopping preferences -- some that border on superstition -- and many approach these myths as reality.
The truth is, most of these beliefs around millennial shopping preferences don't hold water. In fact, they produce, perhaps ironically, retailer behaviors that subconsciously turn millennial shoppers away. According to a June 2013 report by Accenture, millennial shoppers are expected to spend approximately $600 billion annually. That’s a significant annual spend that retailers just can’t afford to miss out on.
To help retailers more effectively attract and engage the elusive millennial shopper, Retail Pro International and Merchant Warehouse, a leading provider of payment technologies and merchant services, teamed up to determine, address and bridge the knowledge gap between merchants and millennial shoppers. What we found is that this gap is much larger than we expected. Despite significant advances in retail technology, including expanding beyond in-store mobile payment options and into in-aisle interactions, retailers aren’t leveraging the full potential to drive new and loyal millennial shoppers to their stores.
Based on our survey results, here are the top ways millennials are engaging with technology, and how retailers can learn from this to more effectively build loyal millennial customers.
1. Whether online or in-store, it’s about finding the right product at the right price.
Lesson number one: not all millennials are created equal, but many of them are information-seeking shoppers. This group tends to gather more information on products before making decisions than any other demographic. In fact, 60 percent of millennial shopper respondents in our survey said they conduct pre-purchase research through retailer websites, 57 percent said they turn to Amazon, and 55 percent use word-of-mouth. That’s a lot of research!
Another key finding is that despite the role of online research, not all millennials will make those final purchases online. More than 90 percent of millennial respondents said there are some products they just prefer to buy in-store -- like apparel, footwear and home goods -- and others they prefer to buy online, like electronics.
An important conclusion for retailers to draw from these findings is the importance of creating a universal -- or omni-channel -- customer experience, one that enables these millennial shoppers to find the information they need to help them make a purchase decision, whether it’s online or in-store. This seamless process provides customers with an easy-to-navigate shopping experience, while also giving retailers a deeper level of insight into purchasing preferences. For retailers, insight into customer purchasing preferences helps build and deliver personalized shopping experiences and, from an inventory perspective, helps to more effectively manage the supply of products readily available to meet customer demand.
2. Many millennials prefer to shop alone.
Nearly 80 percent of survey respondents reported they prefer to shop alone. Understanding the role research plays in the millennial shopping activity, this presents retailers with a significant opportunity to essentially become the shopping companion. Knowing that millennials are less likely to be concerned about interactions with peers at the check-out counter, retailers can turn a basic transaction into an interaction by delivering proactive customer engagement, led by insights from the point-of-sale (POS) system.
3. Technology enables retailers to use discounts as part of the initial engagement process.
Coupons and discounts have seemingly always played a role in attracting new customers. Almost 50 percent of survey respondents reported they'd be willing to go to a retailer location to use a coupon if it offered at least a 20 percent discount, while 17 percent said they'd appreciate any discount as an incentive to walk in the door.
And perhaps a very interesting note for retailers, 63 percent of millennial consumer respondents said they’d be more likely to “check in” on various social channels if they were to get a coupon or discount for doing so. This could open the door to a number of exciting new ways for merchants to engage with new and existing customers.
Today’s payment and commerce technology solutions, however, present retailers with the ability to take coupons and other discounts to an entirely new level, using them as a unique engagement point to educate customers on what’s available based on their preferences. Tapping into a customer’s shopping history, and understanding their history with an individual retailer -- including preferences and brand loyalties -- introduces an incredible opportunity to deliver a seamless, universal experience. It also gives retailers the opportunity to pitch them on new products that might interest them, further building that relationship as the companion for the solitary shopper.
The bottom line: the millennial shopper is not the mythical creature many retailers have made them out to be. Millennials are simply a little different, but certainly approachable. Advances in payment technologies give retailers a new opportunity to attract and engage the millennial shopper by providing an omni-channel shopping experience. And retailers can become the millennial shopper companion by creating a personalized experience, delivering valuable insights into new products and offering discounts available to help them make a purchase decision.\