This year’s online shopping on Cyber Monday increased to a record $3 billion with a 21% increase compared to the previous holiday period. And the Chinese retailer Alibaba sold more than $14 billion during Single’s Day shopping. Thus, traditional retail shopping might be accordingly considered to be on its last legs.
Opinions about the slow decay or even death of retail shopping have been expressed many times. But a recent study carried out by Blackhawk Engagement Solutions, a company that provides customized incentive and engagement solutions for consumers, employees and sales channels, might bring small retailers a glimmer of hope.
The study surveyed different ways millennials make their purchases (i.e. means, devices) and the factors that influence their choices. The whole study consisted of two surveys. The first was made in April 2015 and covered more than 500 participants aiming at studying their shopping behaviour. The second was conducted in October 2015 and dealt with 500 more millennials and their preferences concerning gift cards and mobile applications.
According to the results, millennials widely use gadgets and social shopping, having largely rejected the idea of traditional shopping.
Rodney Mason from Blackhawk Engagement Solutions says millennials are disrupting traditional purchase trends. Having matured in a post-recession period, they’ve become shrewd and regularly compare shops and offers on mobile to find the best deals. Thus, it is of great importance for retailers and retail marketers to attract the cohort shoppers as far as the market hasn’t taken the advantage of such millenials’ behavior yet.
Here are 8 key discoveries of the study from which retail businesses can definitely benefit when refining their strategies this holiday season.
1. Internet connection is primarily made through mobile.
The study shows that 89% of generation Y use their smartphones to connect to the web, whereas 75% of millennials use laptops, 45% tablets and 37% PCs for the same purpose. Therefore, retail entrepreneurs should develop a mobile-first strategy as they look to the future.
2. Social media is the best means to spread information on products.
Social media undoubtedly plays a leading part in the millennials’ lives. It is the number one source to search for and hear about products as well as be aware of special offers and retailer news. The survey shows that digital advertising methods precede traditional sources like television and print media. If it is impossible to change the existing strategy, it won’t be superfluous to integrate social media means.
3. Price is a key factor.
95% of millennials surveyed admitted their interest in price hadn’t decreased during the year. Furthermore, price was found to influence the decisions they made, leaving behind quality and accessibility aspects, as well as brand and store factors. Representatives of the next generation are surprisingly opposing the trend of becoming less sensitive to price. The reason lies in their ability to compare prices and save on bargains.
4. Price comparison via mobile is usually done with Google and Amazon.
The study showed that 46% of the respondents preferred to compare prices at Amazon and 43% at Google using their smartphones even at the same time they were browsing other websites or looking through products in a brick-and-mortar store. Hence, retailers willing to appeal to the representatives of this or even older generation should provide competitive pricing or other benefits more attractive than other large retail businesses like Amazon or Google may offer.
5. Higher-value rebates are more significant for millennials than immediate price cut.
Millennial generation is more interested in the rebates providing them with more savings than simple price cuts or instant discounts. It is particularly visible when we take into consideration categories like clothes, sporting goods, leisure, food, electronics and cell phone plans.
While redeeming rebates, price cuts are often excluded. That is why retailers have to be very cautious and all offers should be clear to the buyer in advance.
In order to avoid harm to their brand’s reputation, they should remember two main points: that no offers should be misleading and that all rebates ought to be easily redeemed
6. Millennials prefer to buy online and to collect from stores.
About 88% of millennials would rather buy online and collect their order from brick-and-mortar stores in order to save some $10 on a $50 product. A discount for picking up in store means retailers can save on shipping and handling (if they provide shipping services, of course). Such a strategy will also facilitate consumers’ perceived value and increase the quantity of visitors.
7. Gift cards are meant to limit identity fraud.
A significant portion of the generation surveyed have fear for cyber security and are afraid that their personal payment data may be illegally used. Thus, 64% of respondents thought it is safer to use gift cards for online shopping, and 66% are convinced this is the best way to limit any kind of identity fraud. For this reason, some sensitive customers may look for some alternatives to outlets like Amazon. Therein is your chance to attract them to the store having offered gift cards or a kind of safe payment method like Paypal.
8. Millennials feel enthusiastic about loyalty programs.
The millennial generation doesn’t usually demonstrate loyalty to a brand. However, 69% of them participate in loyalty programs and 70% feel pretty satisfied. To increase repeat sales, retailers should create interesting value-added loyalty programs, transparent to customers.
These customer habits aren’t likely to surprise large retailers. However, smaller businesses struggling for market share may definitely use the aforementioned information to facilitate digital development. Attraction of the growing market of millennial shoppers will become easy and affordable if these non-traditional habits are taken into consideration.
If you have any thoughts on other retail trends, feel free to comment in the section below.