Tuesday, May 2, 2017

How millennial habits shape retail spending

Millennials have been in the news a lot. Retailers are lamenting the fact that they can no longer reach customers by traditional methods. There are numerous studies and statistics out there about Gen Y, Gen Z and how they are different than baby boomers and Gen X.

There are some trends that retailers and marketers should pay attention to when it comes to selling to millennials and Gen Z.

Some basic characteristics of Gen Y (Millennials) and Gen Z are:
  • Gen Y: Born between 1977 - 1995
  • Gen Z: Born between 1995 - 2001
  • Both groups are mobile in many ways
    • Technology - they aren't just tech savvy, they are tech dependent. 
    • Social media - they grew up with social, it has always been around.
    • Physically able to work, study and live from anywhere with an internet connection.

Millennial habits influence spending

These are general trends but things to keep in mind.

Millennials spending trends:

1. Convenience over price
Convenience store spending is on the rise. Millennials spend an average of $80 a month on coffee.

2. Eating out
Millennials eat out more than older generations. According to BusinessInsider, "53% of Millennials eat out once a week, compared to 43% of Baby Boomers and Gen X". (BusinessInsider.com)

3. Flexibility
Shoppers want searching and payment options that are flexible and easy. More buyers are shopping online and picking up in the stores, or shopping on a mobile phone IN the store so he/she can price shop. Millennials want easy ordering and payment options - like Uber, GrubHub. Keep in mind, many millenials don't carry cash.

4. Mobile
Websites need to be responsive for mobile search, find, purchases and reviews.

5. The Experience
Millennial shoppers are looking for the experience. And with the 'experience' needs to be a way to share it socially and visually. 

Local tips to reach shoppers

Traditional retailers, like the neighborhood store, are still trying to figure out how to reach younger generations. Here are a few tips that businesses should be aware of to reach local customers.

1. Claim your Google Place page.
Customers need to be able to find you if they are searching.
I've noticed more of these "Photo Opportunity" notifications popping up now when your phone recognizes your location. Since when is Safeway a photo op?

2. Reviews:

  • Pay attention to your online reviews. If you get a negative review, post a prompt, non-defensive reply. There are many tactful ways to point out if it is not an honest review and if the business made a mistake, own up to it and try to correct the behavior. 
  • Encourage good reviews from your regular customers. For example, I took my daughter to a new hairdresser. The service was fast, affordable and turned out great. The stylist said thanks for my payment and that was it. It would have been so simple for her to hand me a postcard or business card and ask me to post a Facebook review, picture on Instagram, or pass on for a referral bonus.
3. Social
Use of relevant social networks can greatly increase your online searchability and presence. I encourage clients to choose 1-2 appropriate social network sites and start slow. 

Comment, engage, particpate, post relevant content. Social media is not about selling - it is about building relationships. Choose the right social network for your target customer. 

4. Video
Short videos can boost SEO, customer interaction on social sites and be a good marketing tool. YouTube is owned by Google.

Customer Service Matters

Traditional retail stores cannot compete on price. Paying attention to trends and customer behavior can help a business stay ahead of the competition and better define what their customers are looking for.