How Do Millennials Shop?

 

Millennials have caught the imaginations of retailers over the last several years, as projections of their financial clout have turned promising. The media has been beating the constant drumbeat of tectonic changes in the economic landscape for years. 

 

A commentator in Forbes raised the alarm on why businesses needed to focus on social media in order to tap into Millennials $200 Billion buying power. According to that commentator, Millennials would soon have the greatest buying power of any generation. 

 

While the advice to target Millennials on social media is sound, there are many misunderstandings about who Millennials are and how they prefer to shop. This article will dispel some myths and shed light on Millennials’ buying habits.

 

 

Millennials are a generation born between 1980 and 2000. They are simultaneously the last generation of the 20th century, and the first of the 21st. 

 

That’s the technical definition, but in reality, Millennials have proven to be a puzzle for retailers. For example, according to MarketingLand, Millennials are the least likely to be influenced by retail advertising in their purchase decisions. 

 

In addition, their expertise at tech tends to be ahead of what Baby Boomers and Gen X shoppers possess. 

 

This has made targeting Millennials a challenge for retailers who have traditionally catered to the needs and whims of those other generations.

 

 

Given the rising importance of Millennials in buyer demographics, to succeed in the future, retailers must get to grips with this generation. 

 

Some forward-looking brands have already charted the way, achieving spectacular results with Millennial focused marketing. 

 

BusinessInsider ran a report of survey results showing the 100 brands that Millennials love the most. At the top of that list are iconic brands like:

 

 

According to the survey designers, Millennials loved brands that went the extra mile for them and made them look good in front of others.  

 

 

 

Myths about Millennials and their shopping habits abound. Like anything in retail, however, it’s best to take a view backed with data so that a retailer can make the best decisions. Here are some widespread myths now debunked by research.

 

 

Accenture ran one of the most comprehensive surveys into Millennial shopping habits. One surprising result was that the stereotype of Millennials as opposed to offline shopping is really not true. According to Accenture’s data, while Millennials like to gather information online, 82% of them prefer to buy in-store where they can “pick up, touch, and smell” the item.

 

 

The financial experts at NerdWallet considered the assumption that Millennials spend their money on frivolous shopping. What they found, from a Consumer Expenditure Survey, was that Millennials spent less than older generations on shopping in frivolous categories such as alcohol, entertainment, and even clothing. 

 

There are many other myths, but the data is clear. Millennials are not only technologically savvy, but their financial literacy has been greatly aided by the data-connected world in which they have grown up. Their shopping behaviours, described below, have evolved to suit.  

 

 

There is plenty of truth to the perception that Millennials are more price-driven in their shopping than some other generations might be. They do, after all, act on all that price data that they have learned to find at the click of a button, in the comfort of their homes. 

 

A report by First Insight found that 71% of Millennials visit multiple stores to find the best price, compared to 57% of Baby Boomers. Millennials also do more of their price research online than Baby Boomers. This is a promising area for retailers looking to court Millennial buyers.

 

 

 

Chart: Older Millennials Most at Home With Mobile Payments

 

 

While it’s easy to consider Millennials a monolithic group, subtle differences exist between older Millennials (those aged 25 to 34), and younger Millennials (aged 18 to 24). 

 

Not only are older Millennials more likely to have finished college and started careers, but their buying behaviors are different. Emarketer reports that older Millennials are twice as likely to use mobile payments than their younger counterparts. Compared to older generations, they are 3 times as likely to use mobile payments each week. 

 

Younger Millennials, on the other hand, are more likely than older Millennials to shop in-store.  

 

 

 

The Bureau of Labor Statistics catalogs the differences in spending by generation. The data is comprehensive and points out some remarkable findings. 

 

They found out, for example, that Millennials spend more than other generations, per capita, in these categories:

 

This is explained by Millennials being more likely to have younger families, hence the higher spending on categories associated with caring for young kids.

 

Creating a family-friendly and kids-focused shopping environment would be a winning strategy to attract such Millennials.

 

 

As we saw, Millennials tend to be comfortable with technology and online shopping. Their tech savvy and other behaviors have sometimes led to them being misunderstood by retailers.

 

To be successful at selling to Millennials, you must dig beyond the myths and engage with Millennials the way they really are. Here are some starting points to win Millennial shoppers.

 

 

 

Yes, Millennials use social media, but maybe not necessarily in the way retailers expect them to. The data shows that Millennials use social media to share with friends and to stay relevant. Brands can take advantage of this by engaging in the same way that Millennials do, forming authentic relationships in the process.

 

 

Millennials trust peer-generated product reviews. They want to see that your product works well for others like them, and weigh others’ opinions heavily. You need to use product reviews to your advantage, and promote a culture of transparency.

 

 

 

Millennials’ price-shopping habits do not mean you cannot get them to remain loyal to your brand. If there’s a lower price on the same product at your competitor, Millennials are more likely to be in the know. Use promotions wisely to foster brand loyalty. If necessary, adopt price-matching policies like the major retailers have done.