Millennials are Disrupting Shopping

By Rodney Mason

Originally published on PaymentWeek.

Understanding the new connected shopping experience:

Since Millennials’ on-the-cusp habits start trends, we all study the way Millennials shop.

In two recent national studies, we asked Milliennials how they discover, filter and shop, and we learned how profoundly their influence is disrupting shopping patterns. And shop they do, but not in ways we ever could have imagined a few short years ago.

Smartphones are lifelines

The handheld device is the primary connection to the Internet (and maybe the outside world) for a Millennial. When asked which devices they own and use daily, an overwhelming 89% cited the smartphone with the laptop following at 75%, and then a major dip — tablets and desktops showing at only 45% and 37%, respectively.

The #1 source for shopping news is social media

The long-held belief that commercials cast the widest marketing net has changed. In reality, 55% learn about products, special sales and shopping news via social media. Believe it or not, we learned that when it comes to learning about products, shopping news and sales, venerable television is a distant sixth for them — well behind social media and other online forums — demonstrating that, in 2016, social media is an absolute must have for all retail concerned with millennials.

Millennials will follow a brand on social media to learn about value and savings opportunities since price is their primary purchase influence, driving their preference for adding savings found in rebates over instant discounts. That trend is unlikely to change, since 95% of Millennials say they’re more (or just as) sensitive to price as last year. And very few use third-party apps, preferring instead to rely on retailer apps for savings at the stores they like.

Give them a rebate instead of an instant discount

In key Millennial categories — electronics, iTunes or Google Play gift cards, sporting goods, video games, clothing, wireless and grocery — the majority preferred received a rebate instead of an instant discount. Millennials still prefer prepaid cards as their reward, but digital rewards are gaining popularity — 83% would accept a $25 digital reward on a $100 purchase if it were the only choice.

How do they compare prices? Amazon and Google

Millennials are very price conscious. In fact, price is the primary determining factor in their purchase decisions across categories. They are quick to compare products for a greater value on their smartphones and most favor Amazon and Google as the favorite way they compare prices, versus only 8% taking the time to visit a retail website for price comparisons on their smartphones. That said, having the very best price on your site and merchandising it through Google and Amazon is critical to stay in the hunt for their business.

A few retail shopping apps are popular, but independents not so much

The most used shopping app by far was Amazon, used by 55% of Millennials — evenly split between males and females. Grocery store apps with 18% use (21% female and 15% male), Apple Store 18% with even split between females and males, Groupon at 18% (14% female and 21% male) were a distant second.

Out of the top 28 most used apps 5 independents appeared on the chart. As mentioned above, Groupon tied for second place, Etsy tied at sixth with 15% overall (23% female and 5% male), RetailMeNot tied at tenth with 7% overall (11% female and 3% male). Lastly, tied at twelfth for 5% overall (6% female and 3% male) and LivingSocial tied at eighteenth place with 3% overall (4% female and 1% male).

Gift cards are always a big hit

Millennials find safety and flexibility in gift cards. The majority of Millennials in our study believe that gift cards are the safest way to make online purchases by limiting identity fraud. They also like the flexibility of exchanging gift cards received for other available brands — a growing trend among retailers.

Loyalty and instant gratification

Millennials also like retail loyalty programs — over 69% belong, preferring to receive and read program information via email, but what they really like is anything that’s right now. Buying online and picking up in-store is popular, giving them the immediacy they crave. In fact, 55% told us they’ve bought online and picked up in-store in the last six months. Expect that trend to increase with the impending holiday season.

In 2016 it is imperative to attract Millennial shoppers, so make sure you merchandise where Millennial customers shop — social media, Amazon and Google on their smartphones, with the very best price, typically afforded by rebate promotions. They will use retailer shopping apps, but most savings apps are not popular with this audience. So, for marketers what is the main take away from these numbers and research? Make shopping easy for Millennials and as the trendsetters in the market, others will follow.

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