By the year 2020, nearly one-third of all retail spending will come from the group we’ve come to know as millennials. The millennial generation (defined as those born between roughly 1980 and the early 2000s) represent nearly 25 percent (80 million people) of the U.S. population and more than $200 billion in annual buying power, according to research by Barkley Advertising Agency. Those numbers are expected to rise as more millennials graduate from college, find careers, get married, and begin families. By 2020 their projected spending in the United States will grow to nearly $1.4 trillion annually. For retailers, understanding their context, dreams, habits, and wallets is central for any business that wants to interact with tomorrow’s trillion-dollar demographic.
The millennial generation has become synonymous with technology. From hardware such as smartphones and tablets, to communication platforms such as Facebook, Instagram, and Twitter, millennials are seeing the world through a digital lens. A great deal of the technology/social media use plays an important role in the retail industry. Retailers have come to acknowledge that millennials have a tremendous amount of influence when making purchasing decisions. Social media has transformed how this generation shares its thoughts and extends its influence. Through comments, shares, likes, online reviews, and a host of other forums, millennials wield a tremendous amount of power when it comes to a brand’s reputation and influencing fellow consumer’s opinions.
According to Barkley Advertising Agency, 70 percent of millennials say they are often asked for advice when it comes to purchasing decisions. There were also 68 percent who said they don’t make a decision without discussing it with others. Whether from experts or not, evidence has shown that millennials value the feedback of friends, and more importantly “strangers”. Some 51 percent said they trust “strangers” more than friends when planning major purchases. In other words, they may seek out feedback from blogs, websites, and apps as opposed to asking one or two friends who may have made a similar purchase.
The culture of sharing retail experiences, from posting to Facebook and Instagram, to sharing opinions on Yelp, websites, blogs, has contributed to the sphere of influence this generation has in the retail industry. It has always portrayed the image that millennials are not only seeking to become another transaction, but to be entertained in their shopping experiences. For 70% of women and 50% of men, shopping is a form of entertainment, and they expect novel options to keep it renewed. They often view shopping as a social experience and a significant way to spend time with friends and family.
This may go against the notion that many people have of techno-savvy millennials who are all about online shopping. According to a recent study by OpinionLab, 37 percent of millennials preferred to shop at a mall, while only 27 percent would rather shop online. A contributing factor to this is that millennials are seeking that personalized experience that really “speaks to them”. Thirty-five percent of the group surveyed said they envision a store of the future as one that is unique, cozy, and quirky, and very similar to the experience delivered by handmade and vintage seller Etsy.
Brands that provide more substance to their offerings and give greater explanations of why they are relevant give the millennial more reason to make them a part of their lives. And it gives them more reason to share with others, helping the brand build an organic and loyal following. Open, ongoing, relevant communication is the key to a brand’s success with this generation. Retailers will continually have to seamlessly blend the retail channels in order to deliver the ideal customer experience that millennials seek. The key for retailers is understanding that millennials seek quality experience, products, and direct engagement from brands. In order to continue to thrive in an ever changing marketplace, brands will have to start looking closely, not at how they define themselves as a brand, but how millennials define the brand.
Photo Credit: “Mobile Phone With Colorful Application Icons” by KROMKRATHOG Source: freedigitalphotos.net