Companies are increasingly competing for millennial's favor, and for good reason. There are some 200 million millennials in the US alone, roughly one fourth of the population. According to Millennial Marketing, it is estimated that millennials comprise roughly 20 percent of consumer discretionary purchases, which adds up to more than a trillion dollars in direct buying power.
That is a lot of potential business, so it is in the interest of retailers to cater to this growing market. When trying to win the favor and influence of millennial buyers, here is what you should know.
· They Do Research Before Making a Purchase
Millennials do not make impulse purchases. “While millennials may have a tendency to be more impulsive about certain decisions, recent research leads me to believe that the majority are really trying to learn from what their parents went through and are using that knowledge to make informed financial choices,” Marcy Keckler, vice president of financial advice strategy at Ameriprise, told TIME.
Okay, so where do millennials go to research before they throw down cash and make a purchase? They tend to rely on the Internet. Millennials check out social media and online reviews before they make a purchase. In fact, one out of three millennials report relying primarily on blogs when researching a purchase. If your company is not already blogging, now is probably a good time to start. Of course, you will also want to make sure that you have an active presence on social media and online review sites.
· They Value Authenticity
Millennials want to be sure that the information they are consuming is accurate and authentic. “43% of millennials rank authenticity over content when consuming news,” Dan Schawbel explains in Forbes. “They first have to trust a company or news site before they even bother reading the content that they produce.”
“Blogs are meant to be authentic and many of them are run by a single individual. Millennials connect best with people over logos.” This same idea applies to their purchasing behavior. If millennials do not trust a brand, they are not going to make a purchase.
When it comes to building trust, millennials are not necessarily influenced by advertising. Interestingly, research found that a mere one percent of millennials felt that a compelling advertisement would make them trust a brand more. What actually influences them is online reviews and testimonials.
Just over half of millennials surveyed reported that consumer opinions on a company’s website have a greater impact on their purchasing decisions compared to recommendations of their friends or family members.
· They Prefer Engaging with Brands on Social Networks
Because millennials are digital natives, they are most comfortable interacting on social media. For that reason, it is perhaps no surprise that they rely on social media sites like Facebook, Instagram, and Twitter, with those being their primary sources to find out about products and deals.
More traditional methods of advertising, including television and print media, lag well behind social media with millennial segments. To maximize your success with millennials, you may want to consider diverting more marketing dollars to social media marketing.
· They are Price Sensitive
When it comes to millennials, price matters, and it matters a lot. “Price has the greatest influence on millennials' purchase decisions above all other factors, including quality, brand, store, and availability,” Peter Gasca explains in Entrepreneur. “This is surprising because a growing economy or shopper segment typically leads to less sensitivity to price, but millennials clearly are bucking that trend.”
Why is it that millennials are so price conscious? Well, it is likely because of the internet. Armed with WiFi connections and their smartphones, millennials can pretty much instantly compare prices for a product online in their dogged pursuit for the best deal. Research shows that Amazon and Google are millennials favorite tools for price comparison.
Research also reveals that 57 percent of millennials report comparing prices in store. The bottom line is that millennials are constantly using these kinds of tools to compare prices and save, even when they are actually in a retail store. To compete, retailers need to think strategically about how they can provide more value than sites like Amazon or large retail outlets.
· They Appreciate When Companies Consider Their Input
Millennials have opinions and they want to express them. A full two thirds of millennials feel that companies should provide customers with more ways to share their input online, and they do not just want to be consulted on existing products. Rather, they want a voice in the development process.
Typically, a company develops a product and then markets it to their target audience, with the hope that there will be demand. Millennials, however, prefer to be consulted and want to be more involved in the product creation and development process. Roughly two out of five millennials express an interest in helping companies to develop future products and services, which means companies that can find a way to consider millennial input in the product development cycle will have a leg up on the competition.
· They Want to Develop Personal Relationships with Brands
Many erroneously assume that millennials do not want to develop long-term, meaningful relationships with brands, and have no interest in loyalty. Although this is a pervasive myth about millennials, it is simply untrue. Millennials want to develop relationships with brands.
Part of this is because millennials tend to value experience, and are not only interested in the products and services it provides, but the experiences it can deliver. Personalized, targeted promotions, loyalty programs, targeted advertising, and interactive in-store experience can all be beneficial to a brand in winning millennials’ loyalty.
· They Like Shopping
The good news about millennials is that they actually like shopping. In fact, 37 percent of millennials say that they do not just like shopping, they love it! A full 50 percent of millennial men and 70 percent of millennial women actually say that shopping is a form of entertainment and a fun activity to do with friends and family. Brands can further enhance millennials’ overall enjoyment of the shopping experience by making sure their stores are interesting and interactive.
In conclusion, taking the time and effort to understand the unique characteristics and preferences can pay off dividends if you are able to win the favor of this sizeable market segment. As a caveat, it is important to point out that not all millennials are the same. You should still segment the overarching group, just as you would your normal target audience to ensure targeted marketing efforts and success.
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