Why Read this Article
You’ve probably heard that Millennials make up nearly a quarter of the U.S. population, and contrary to popular belief, contribute a sizeable amount to retail sales each year. However, you’ve probably also heard that Millennials think, breathe, act and shop very differently than your traditional customers. Fear not! This article will arm merchants with important insights into the lives of Millennials, and provide helpful tools to convert your Millennial target audience into happy customers.
The Millennial Shopper, Dissected
You’d think that being a Millennial would make me a natural expert on Millennial shopping trends, but let me tell you: I’m continually surprised by my peers. Millennials are a savvy bunch, accustomed to evaluating, challenging, and advancing the status quo.
To successfully convert Millennial shoppers, don’t focus solely on whatMillennials buy. Be willing to ask: Who are they, and how and why do they purchase? Here are five important details about Millennials that will help answer these questions, and actionable tips to win them over.
1. They hate the stereotypes about them
Studies typically point to student loan debt, optimism, and risk-aversion as the unifying markers of the Millennial generation. However, I can tell you for a fact that Millennials are first and foremost aware of their individuality. While they may draw great inspiration from their peers, they also aim to have a unique personality and point of view.
As such, champion the individual shopper. It’s not always about drawing up customer personas. Make your consumer feel like they are important to your business, and that you reward them by knowing who they are and what they want.
- Know your consumers and cater your offers based on their individual needs.
- Create personalized messaging for all touch-points with your customers.
- Offer recommendations for your other products or services based on what they’ve purchased before (i.e. “If you liked that, we think you might like this…”).
2. They like innovation – up to a point
In an age where the word “startup” has become as pervasive as Starbucks, Millennials are used to the idea that innovative ideas can disrupt an industry. But they don’t adopt innovation for innovation’s sake, as they’ve also seen many new ideas crash and burn.
Take for example the dismal launch of Google Glass that resulted in only a select few consumers adopting what many felt to be out-of-reach and unnecessary technology. Or Segways, which today are more likely to be seen on a city tour than in a Millennial’s garage. Not all innovations create a benefit that Millennials want or can afford.
So while Millennials may be open to experimenting, they are most loyal to brands that provide incremental, relevant value. Lyft, the ridesharing service, has managed to become (and remains) a service widely used by Millennials by providing a superior and affordable alternative to their typical mode of transport – public transportation. Venmo, a peer-to-peer payment app, has gained a huge following with Millennials who enjoy a free bill-splitting tool that doesn’t involve credit cards.
In addition to proving a relevant benefit, quality and consistency remain key factors to success. Millennials are quick to shift to other companies who provide similar services but a better user experience.
- Ask yourself: “Does this innovation solve a real problem for Millennials – i.e. reduce friction or create more delight?” If you can’t come up with a compelling, relevant benefit, go back to the drawing board.
- Also ask: “Would Millennials be able to afford (and willing to pay for) the benefit offered by this product or service?”
- Put stock in a high-quality user experience. Even if your product provides a real value to Millennials, a poor UX will likely prompt them to explore other options.
3. Millennials are suspicious of debt
As of 2012, the average student loan debt for graduates came in at about $27K. Additionally, the average net worth of a Millennial without student loan debt is $64,700 compared to a net worth of $8,700 for Millennials with student loan debt (according to a Pew Research report). The possibility for accruing more debt is a huge consideration for Millennials when making a purchasing decision. They are particularly wary of credit cards, which they believe keep them in debt and subject them to expensive compounding interest and fees.
Millennials aren’t opposed to borrowing money to pay for purchases, but they do want to understand the impact financing has on their financial health. One popular option among Millennials is installment financing, which enables them to buy and receive their purchases now, but pay for them over time. Although there are associated finance charges, each monthly payment includes a predictable payment, allowing Millennials to pay down their debt in a responsible manner over time.
- Provide financial tips or resources that help Millennials feel more in control of their financial well-being.
- Offer payments options that will allow Millennials to shop in a way that aligns with their financial goals. Installment loans with reasonable interest rates, like those offered by Affirm, are a good alternative to only accepting cash or credit.
4. They’re waging a constant battle between nostalgia and advancement
While Millennials and technology have become inextricably linked, many Millennials still carry memories of pre-tech life. They have an understanding of (and nostalgia for) the time before high-speed Internet, mobile payments, and yes – even iPhones.
Vintage is cool. Think about podcasts – yes, they rely on technology but they also rely on good old fashioned conversation. A USB that looks like a cassette tape might actually be more compelling to a Millennial than a USB that looks like a, well, USB. For an example of effective marketing that employs that special combo of old vs. new, just take a peek at Apple’s 2014 holiday commercial.
- Reflecting on past trends and making them relevant in today’s world creates fodder that speaks to a Millennial audience.
- Bridge technology with “throw-back” references (as seen in the Apple commercial above) that can differentiate your products and strike an emotional chord.
5. They vet products… heavily
An anonymous 1-star review might actually pose the biggest challenge when trying to win a Millennial customer. While most previous generations depended on personal word-of-mouth recommendations, Millennials are more likely to double and triple check their purchases against online reviews from strangers.One survey found 80% of Millennial respondents were swayed to purchase by positive reviews on a company’s website or Facebook page.
Additionally, the likes of Amazon and Google Express make comparison shopping part of the user flow. Phone apps that scan barcodes to unlock product info and prices offered by competitors are becoming more and more popular, giving instantaneous access to even more information.
- Closely monitor customer feedback (or even better, actively seek feedback) on your own site, third party sites, and on social media.
- Create as many touch points with consumers as possible that allow them to figure out why your product is superior than those of competitors.
- Find your champions, speak to them, and ask them to advocate on your behalf.
- Find your naysayers and use their feedback as points to address in your product development or messaging.
What You Should Do as a Merchant
As you build out your marketing and product strategies, it’s crucial to understand the specifics that influence Millennials to buy. Specifically:
- Take the time to learn who your Millennial customers are. Not as a stereotype. Not as a persona. But as individuals.
- Don’t innovate for innovation’s sake. Understand your Millennial consumers’ wants and needs, and build specifically to address them.
- Offer financial tools to help your Millennials afford what they want. You will gain their trust and make them feel they are in control of their financial health.
- Bring back tried-and-true successes from the past and make them relevant to Millennials today. Give them a good reason to post a picture of your product on Instagram with the hashtag “#TBT”.
- Make it easy for Millennials to figure out why your product is better than others. Invest in building out positive ratings and reviews, and proactively provide Millennials with the product information they need before their attention gets swayed to a competitor’s product.