There are over 80 million millennials with roughly $600 billion in purchasing power. So how can you reach them?
Generation Y or more commonly, the millennials, are those born between 1980 and 2000. Born into the age of technology, millennials are tech savvy, constantly on-the-go and look forward to new innovations. With more collective purchasing power than any other consumer demographic, millennials are a huge market for retailers. And an even bigger opportunity for online retailers. A survey conducted by DDB Worldwide, found that 40% of women between the ages of 18-34 reported that ideally they would buy everything online, 33% of men saying the same. That’s right, if they could do all their shopping online, they would.
Urban Land Institute has also found that 45% of millennials spend at least one hour a day on retail sites. Of that, 20% of men and 13% of women said they spend more than two hours a day viewing retail sites. So how can retailers make the most of it and close a sale?
Here are four ways to reach the millennial shopper:
Growing up in the age of the iPhone, Galaxy and now the Amazon Fire, it is no wonder that mobile is one of the top ways, if not the top, to reach millennial customers. comScore has reported that one in five millennials are mobile-only consumers. This means that they email, read the news, google, social network, and yes, even shop all from their phones. Don’t miss out on 20% of 80 billion by not optimizing for mobile. Retailers need to construct their stores for mobile viewing and easy product searching. Be sure to offer the information and images that would be available with standard viewing. With 69% of mobile millennials looking at product reviews before making a purchase, merchants should also include product ratings and feedback on their mobile stores.
BOGO, Coupons & More
Millennial shoppers are savvy bargain hunters. They’ll go the whole nine yards in order to get a good deal. Research has shown that 65% of male and 55% of female millennials have shopped on eBay, a marketplace known for auctioning items at a significantly lower price. Millennials are constantly looking for deals. While retailers don’t continually need to be offering sales or deals, they should incorporate it into their pricing strategies. One way to do this is to implement a dynamic pricing strategy. Dynamic pricing gives retailers a high degree of pricing flexibility and therefore the ability to lower prices when they see fit. This could be to clear out last season’s merchandise.
Reach Out, Build Personality
As smartphones become more popular, so does social media. Smartphones and apps made it easier for consumers to constantly be plugged into the world wide web, constantly updating statuses, posting photos and simply chatting with friends. Social media is a key way to reach out to millennials as SDL found that 5 out of 6 millennials say they “connect with online retailers via social media.” Millennials like that they are able to follow product releases and pick up on new trends first. Urban Land Institute also found that 44% of men and more than half of women used Facebook or Twitter to get notifications of sales or deals. While social media channels are a good way to spread the word of promotions and sales, it also helps a retailer connect to potential consumers and receive a high amount of direct feedback.
Points for Purchasing
Millennials like exclusivity and rewards. The best way to gain brand loyalty among millennials is to start a loyalty program. Hanover Research found that 78% of millennials would pick a retailer with a loyalty program, compared to one without. While being a part of a loyalty program often means receiving news on deals, sales and new trends first, millennials want to be a part of loyalty programs for rewards or membership status. Bond Brand Loyalty found that 33% of millennials reported that they bought something they didn’t need or want just to earn points or increase membership status. This is also a good way for retailers to increase their average order value. Looks like a win-win. The purchasing power among millennials will continue to increase since many of them are still in their teens or early twenties. Accenture has reported that by 2020, 30% of all retail sales will be made by millennials. Building loyalty will help retailers gain early access to a growing market.
Millennials have already changed the face of shopping with the growth in mobiles and technology. Retailers should begin providing Generation Y with a seamless shopping experience in order to appeal to this growing market.
What are other ways that retailers could sell to millennials?
Contributing Writer: Amanda Lin