Without a doubt, Millennials are one of the most valuable consumer demographics to businesses today. Also referred to as “Gen Y,” Millennials represent about 80 million people, an even larger group than their Baby Boomer parents, that is about 76 million strong.
Having been born between the years 1982 and 2000, Millennials are also a diverse group. According to the General Foundation of the US Chamber of Commerce, only 60 percent of Millennials identify as non-Hispanic Caucasian. Some estimates are even as low as 57 percent. Compare this to 1980, when 79.6 percent of the population identified themselves as non-Hispanic white.
A lot has been made about the shopping patterns of millennials because of the tremendous spending power they have. The fact is, 85 percent of Millennials indicate they either “love to shop” or “enjoy” shopping. Millennials see shopping as a form of entertainment, done as a social group activity. Social networks also drive shopping activity, whether it be through Facebook posts, Twitter coupons, Pinterest Pins, etc. About 52 percent say they discover new products and services on social sites. This is especially true among Millennial Moms, who put a great deal of weight on what other Moms say as they shop for the best products and services for their children.
In this post, we’ll dive into the shopping patterns of Millennials to separate fact from fiction. Millennial shoppers are a unique breed, and by understanding them better you’ll be more effective at turning them into loyal customers.
Millennials love to shop local
Millennials are gravitating towards shopping local more so than any previous generation. Part of this is proximity, as 50 percent of Millennials indicate they would drive less if other options are readily available. Aside from the motivation of convenience, they have a strong desire to support local retailers that are easily accessed by public transportation. This trend is leading many Millennials to work, live and shop in multi-use developments that are transit friendly. This goes hand in hand with the growth of car share services like Zipcar and rideshare applications like Uber, as Millennials will use these when public transit isn’t available.
Smart retailers are recognizing these trends and catering their customer experiences accordingly. Costco recently teamed up with Zipcar, for example, to provide prepaid Zipcar cards at a 20 percent discount to regular pricing. The goal for Costco was to increase the reach of their brand to consumers, and especially Millennials, who often don’t own cars. On Zipcar’s end, they’ve made cars available at several New York City Costco locations to make shopping easier for those without their own cars. The combination is proving to be a highly effective marketing tool for both Costco and Zipcar, since they understand millennial shopping patterns and how to accommodate them.
Millennials are socially conscious shoppers
A personal connection with brands that are socially responsible is a key trait of Millennial shoppers. The percentage of Millennials who say they are willing to pay more for products that are socially conscious has increased from 55 percent to 72 percent over the last few years.
Socially conscious retailers provide information and guidance to Millennial shoppers about how their products are brought to market in a responsible manner. One of the most important things that companies can do to show that they fit in this category is showcasing how they give back to the community. This can be defined broadly, from things like donating to a local food bank to sourcing locally grown products in their supply chain.
Millennials are tech-savvy shopping wizards
No generation uses the internet more than millennials to become wiser as consumers. About 77 percent say that they research online before buying in stores, which is significantly greater than 60 percent of consumers as a whole. Additionally, 58 percent indicate they habitually “showroom,” or browse in a physical store before going home and buying online. They key is not to “overthink” the use of technology in the retail experience. If millennials can’t shop or share items from your store on a device or platform they already use, it’s probably overly complex.
Millennials also love to use mobile devices to research and compare products while shopping in a store. Statistics show that upwards of 89 percent of Millennials use smartphones as their primary device for connecting to the internet. Ironically, only 25 percent say they seek the best deals online, compared to 33 percent of all adults. What this supports is the idea that the internet is a place to research, and stores (particularly local), are the place to buy. The fact is, 92 percent of Millennials are influenced by availability of an item, and prefer to purchase in-store rather than wait for something to be shipped. This also explains the rise of same-day delivery services retailers have rolled out, that have increased in popularity amongst Millennials.
Millennial shopping patterns are clearly different from the Greatest Generation, Baby Boomers, and even Generation X. Smart brands will recognize key trends like socially conscious shopping and mobile showrooming (that are at the core of Millennial shopping) in order to gain their trust and win their business.