Millennials already spend about $600 billion annually on retail and as they grow older, with more of the generation entering the workforce, their collective buying power will only increase. In order to lure millennial spending, businesses need to understand how this group shops.
While millennials still prefer a brick-and-mortar retail experience over online shopping, this is likely to change in the future. On Black Friday last year, Amazon temporarily overtook Walmart as the world's largest retailer, so we're already starting to see this shift. As the majority of millennials are glued to their phones, a business' mobility has a huge influence on how millennials spend; whether they are purchasing online or in-person. At nearly every touchpoint, mobile plays a key part.
Here are four millennial shopping trends that businesses need to keep up with in order to harness their spend.
They want a seamless shopping experience
Millennials will whip their phone out to research a product before they even get in the car to go down to the mall - 72 percent will peruse their options online beforehand. One in five millennials no longer use a desktop computer to connect to the Internet, so it's no wonder that mobile devices will be the primary shopping medium in the future. According to a survey conducted by Accenture, 68 percent of millennials want a shopping experience to be seamless. This means a business needs to have a mobile experience that transitions effortlessly to the store.
Globally, there are 900 million people using Facebook Messenger every month and, during the same timeframe, one billion messages pass between people and businesses. Millennials are behind this high volume of mobile interaction, spending more time communicating through mobile messaging than on any other platform. For that reason, they expect the companies they do business with to be available on messaging apps, as it's a fast and convenient way to get product information from businesses during the all-important research phase. Businesses are now leveraging chatbots to help users shop within Facebook Messenger. Millennials can order a pizza or an Uber using the bot-enabled purchase model. With the platform open to developers, it's only a matter of time before more businesses get involved.
They want to try before they buy
The reason brick-and-mortar stores remain the preferred outlet for millennial shoppers is because they want to see, touch and feel a product before making a purchase; and this is where they don't differ too much from their generational predecessors. This need to ensure that the product meets their standards or works for them has given way to retailers offering a variety of virtual reality experiences for shoppers. Lowe's has created the Holoroom, an experience that enables shoppers to create their dream bathroom or kitchen. NARS Cosmetics partnered with Facebook to create a 360 Video experience where users can click and drag their way around makeup tutorials. V-commerce is undoubtedly an emerging shopping experience that we'll continue to see more of as millennials warm to the idea.
They want to pay with their mobiles
Improvements in fintech have seen a proliferation of contactless payment options in-store. Millennials are using these payment methods the most, with 23 percent using contactless payment methods at least once a week, and these numbers are only growing. For this reason, retailers need to embrace the move to a more seamless payment experience with the popularity of mobile wallets increasing. At music festival and millennial Mecca, Coachella, every vendor this year was using Square's NFC terminals to accept mobile payments. A diverse cross-section of industries are willing to adapt to the demands of millennials, no matter the scale.
By looking to the shopping trends of the largest generation and adapting to the way they spend, retail businesses can be sure to harness the spending power of this lucrative generation.