Millennial Buying Trends
Is your brand ready for the new wave of consumers?
As the largest generational group in the United States, it’s no surprise that millennials have been the talk of the town in recent months. Now that the youngest members of this cohort are assimilating into adulthood, the business world is starting to see their economic impact. With a population of more than 83 million people, the millennial generation accounts for an estimated 30% of all daily consumer spending.
However, it is the way in which millennials spend that continues to baffle brands and retailers alike. Here, we break down some of the trends we’ve found in the purchasing habits of the nation’s 22-36 year olds.
Where They Shop
It’s true that millennials are more likely to make purchases online than their predecessors, but new statistics show that we may have underestimated how likely they are to make in-store purchases. In fact, the majority of millenials make most of their purchases in-store. Even more interesting, when surveyed, 82% of millennials said they prefer shopping in brick and mortar stores as opposed to shopping online¹. The catch? They specifically want to shop in stores that offer superior customer service and personalized promotions to entice them.
How They Choose Products to Buy
Another pain point for brands has been trying to identify why millennials choose to purchase one product over another. Our research indicates that there are three key factors that greatly influence millennials’ purchasing decisions: ethics, recommendations, and price.
A study found that a whopping 82 percent of millennials wish foodservice establishments would use more environmentally friendly business practices. Additionally, nearly 70% of millennials said they would be willing to pay more for ethically produced food they can grab on the go.²
The next great influence is recommendations by peers. Unlike the generations before them who loved to see endorsements by celebrities on TV, Gen Y appears to respond best to products that receive recommendations by a friend or a person whom a consumer identifies as a “regular person”.
Lastly, and surprisingly, millennials use price as a deciding factor for which items to purchase. When it comes down to purchase time, 53% of millennials will turn to their cell phone to search for a coupon before heading to the checkout stand.
What They Want From Brands
There is a lot of discussion that millennials are “killing brands” because they are not brand loyal. However, the data suggests that millennials are actually very brand loyal. More than 60% said that they are often or always loyal to brands that they currently purchase. The difference is that millennials are asking for more community and social involvement from brands before they purchase.
Nearly 75% of millennials said that it is either fairly or very important that a company gives back to society rather than just making a profit. Companies touting B Corporation, Fair Trade, or Organic certifications are especially likely to catch the eye of millennials in the grocery store, they’re even willing to pay more for a product with these labels. Lastly, millennials expressed a great interest in being involved in the development of brands; 42% said they are interested in providing feedback to help companies develop future content or services. They want the ability to contribute to a product that they can then purchase with complete confidence.³
What Does All This Mean
Now that you know what millennials are looking for to make a purchase decision, how does your brand stack up? The numbers show us a couple of key trends that all brands can work with to engage millennials and increase sales and brand loyalty within America’s largest generational group.
First, do not neglect the in-store shopping experience for millennials. As we’ve found, they are still spending the majority of their shopping time in brick and mortar stores, and they want you to provide them with a unique brand experience.
You can create a more engaging in-store shopping experience for millennials by providing coupons and instant savings on the product itself, setting up an in-store demo to engage with consumers directly and introducing “real people” in the form of brand ambassadors to invite millennials to try your product.
Lastly, show millennials what your company cares about. You can do this with your labeling, on social media, or in-person to highlight causes that are important to your company and show consumers how you give back.
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