Millennials and Online Shopping
Millennials (born between 1980 and 2000) are expected to entirely reshape the economy; their unique experiences will change the ways we buy and sell, forcing companies to examine how they do business for decades to come. MarketingProfs reports that habits of Millennials differ from those of Baby Boomers and Generation X. Their opinion on social media, privacy and e-mail trends are noticeably different from other older age groups and since they will enter their spending peak soon, it is important to pay attention to them and reshape business strategies. According to the report, Millennials are heavy users of Facebook (43% stated it was their most used social channel, followed by Instagram). They are still influenced by e-mail promotional campaigns and less worried about privacy (compared to older customers). They interact with various digital channels.
Millennials are not as worried about data privacy as older customers (in general and in online shopping). Around 51% of non-Millennial adults say they are very concerned about how companies use their personal information versus 37% of Millennials who say so. Surprisingly, most Millennials say promo e-mails influence their purchase decisions all of the time or most of the time.
Fobres says Millennials review blogs before making a purchase: 33% of millennials rely mostly on blogs before they make a purchase, compared to fewer than 3% for TV news, magazines and books. Older generations rely more on traditional media, whereas millennials look to social media for an authentic look at what’s going on in the world, especially content written by their peers whom they trust. In addition, they want to engage with brands on social networks, because they want to co-create products with companies. 62% of millennials say that if a brand engages with them on social networks, they are more likely to become a loyal customer. They expect brands to not only be on social networks, but to engage them. This obviously takes more labor from companies to be able to maintain social networking feeds, but it’s worth it if you want to reach millennials.
Here is how online shopping developed through various age groups:
Image 1: Online Shopping Growth in the UK. Source: Office for National Statistics, United Kingdom
Entrepreneur noticed some of the most prominent characteristics of online shopping habits:
- Smartphones are a primary means to connect to the Internet.
- Social media is number one for shopping information.
- Millennials are sensitive to price.
- Google and Amazon are favorites for comparing prices on smartphones.
- Millennials prefer higher-value rebates over instant discounts across shopping categories.
- Millennials will consider "Buy Online, Pickup In Store" as an incentive.
- Gift cards are believed to be safest for online shopping.
- Millennials embrace loyalty programs.
Taking in account everything previously mentioned, it is now easier to devise strategies to win the race against your competitors. Companies need to pay attention to Millennials' habits if they want to keep doing business.
Accenture estimates millennials spend $600 billion a year. Omni-channel campaigns with touchpoints across devices will be the next step in engaging a generation that jumps between platforms with ease. BazaarVoice states that 64% of millennials say companies should offer more ways to share their opinions online. Since millennials were young, they’ve had access to interactive forms of entertainment and education. They’re used to being heard. That expectation extends to brands. Providing more ways for your fans to express themselves – through social contests, promotions, user-generated content, or customer care channels – will help you build relationships with this vocal group.
We have already written about what makes a customer loyal to a brand. So here are some graphs to show what Millennials think about brands and brand loyalty.
Image 2: Millennials' view on branded products. Source: Ipsos MORI Global Trends 2014; (16k respondents across 20 countries)
Millennials, more than everyone, often make decisions whether to purchase products based on research that includes reviews from trusted sources. When looking for advice on what to purchase, a brand’s ad isn’t the first place they go. Millennials seek opinions from friends, families, or even strangers. Brands will need to bridge the trust gap with engaging, relevant content and a special emphasis on user-generated content.
"Customers today use multiple digital channels to research information about local businesses," says Chris Campbell, chief tracking officer at Review Trackers, an online review-management and reputation-monitoring platform based in Chicago. When people say good things about a brand, be sure potential customers who may be researching that business know about it. "It's good to cover all your (business's) bases and be in a position to reach out to information-seeking leads," he says.
Since 92% regularly visit Social networking web sites for the purpose of learning new information, getting acquainted with latest trends, or just for fun, it’s easy to understand advertising should no longer be done traditionally. It should now involve reviewers and honest opinions. This is the future of marketing and engaging with customers.
Shoppers are using social media to find reliable brands. Social networks will serve as shopping platforms in the near future. Over the last several years, brands have used social media to market their products, talk to customers, and even make merchandising decisions; but in the coming months, “we anticipate merchants to add “selling” to the list of things they can do on social sites”, says Vendhq.
To sum up, Millennials are following all major trends in online shopping. They are the age group a lot of companies are now focused on, since they will soon be buying houses, cars, or make other major investments. So far, they have only been targeted by business who do not sell products on such large scale and whose products are not that expensive. This is rapidly changing, since more and more young adults are investing and spending more and more. This research was brought to you so it would be easier to change advertising strategies or selling methods.
We encourage you to take part in the discussion in the comments section below.