The first generation to come of age in the new millennium is changing the landscape of the retail industry. Millennials—those born from 1982 to 2000—have trillions of dollars of spending power. Retailers need to pay attention to their needs, interests and spending habits if they want to capture their attention. Research shows that convenience, experiences and an emphasis on giving back are key approaches to winning this generation.
Flexibility and Convenience
Millennials started using technology at a young age and now use it in every aspect of their lives from transportation to fitness to banking and everywhere in between. When it comes to spending, this generation makes purchases from a variety of different channels—whether online, from their mobile device, in an app and in stores. Shopping experiences in all of these spaces needs to be seamless and easy for the user. That being said, their smartphones are their preferred means of connecting to the internet so brands should lead with a strong mobile strategy.
Convenience is also extremely important to this group of spenders, who have also been called the “grab-and-go” generation. The National Retail Federation (NRF) found that millennials are twice as likely than other generations to pay extra for same-day delivery of online purchases. According to NRF, the key to succeeding with Millennials in terms of convenience is enabling them to make a purchase without interrupting what they are doing — whether they are in a store, browsing Snapchat or using their smartphones to message friends.
Experiences And Loyalty
One in four millennials are more likely to pay for an experience over a product, according to Forbes. Companies that learn how to leverage lifestyles trends and provide an experience rather than just a service or product are the ones that can attract this group. The environment and service that a brand offers can help provide an engaging experience. A strong social media presence also adds another space for customers to interact with the retailer even after the purchase has been made.
Millennials are also more likely than other generations to sign up for loyalty programs. A recent survey found that around 80% of consumers in that age group say it would be worth paying for loyalty rewards if the perks offered fit their needs. Being part of loyalty programs help them feel like part of a club or experience and allows them to feel valued as they spend their money.
An impressive 85 percent of millennials say that their purchasing decisions and willingness to recommend a brand correlates to a company’s efforts around social good. Again playing to their value of convenience, this generation is comfortable paying an extra $1 at the counter for a charity. They also enjoy the instant gratification that comes from the philanthropic “one-for-one” models from brands like TOMS (every time a certain good is purchased, someone in need is helped.)
Millennials expect convenient purchasing experiences they can share and be proud of. Retailers who want to remain relevant need to learn to tailor their products and services to the unique needs and interests of individuals in this age group.