Attracting The Millennial Dollars: Trends For Retailers
By Christine Kern, contributing writer
How to draw in the Millennial market
Retail spending by Millennials accounts for over $600 billion a year, a number that is only expected to rise as they enter their peak earning years. With so much revenue on the table, retailers are searching for the best ways to attract the millennial spenders and build lifelong loyalty to their brands and stores.
Store loyalty programs are a key tool for building millennial allegiance. Recently, PunchTab released two research reports detailing Millennial shopping patterns and loyalty program usage. Surveying over 1,000 Millenials, the studies ranked the top 10 fashion and accessories loyalty programs among both men and women and also offered glimpses into the buying habits of this powerful market. Both surveys may be downloaded here.
The first survey, titled “Loyalty Programs and Consumer Interest,” asked 1,600 men and women between the ages of 18 and 33, what types of loyalty programs they would be interested in joining. Of women surveyed, a clear majority, or 63 percent, said they were most interested in grocery rewards programs, while among men the responses were more evenly divided, with only 50 percent coming in with grocery as the leading choice. Travel took a close second with both genders.
The second survey, “The Path to Millennials: the Fashion and Accessories Edition,” examines how Millennials learn about, buy, and recommend fashion brands and retailers, and how incentives and loyalty programs can affect those behaviors. The survey included 2200 Millennials surveyed between June 1, 2013 and April 15, 2014.
The key findings of this white paper state that Millennials:
- Are highly influential consumers, often trendsetters for other shoppers.
- Do not trust advertising and are skeptical of brands.
- Are 1.5 – 7 times more like to create the kinds of high-value social content brands and retailers desire when offered an incentive to do so.
- Embrace incentives and loyalty programs tailored to them.
- Prefer rewards with real world impact.
This research is significant because Millennials make up about 25 percent of the U.S. population, wield over $600 billion in annual spending power, and 79 percent of them use social media platforms. They also tend to trust the experiences of others (even strangers) over brand advertising.
The study also concluded the shopping is a mobile experience for Millenials, citing that:
- 58 percent check user reviews before making a purchase
- 57 percent compare prices before making a purchase
- 24 percent seek opinions from their Social Network(s)
- 50 percent would exchange their mobile number in exchange for geo-targeted discounts
Further, 74 percent of women and 52 percent of men belong to at least one fashion-related loyalty program. Meanwhile, 51 percent said they prefer store loyalty programs that cover multiple brands, 37 percent said they’re interested in parent brand programs, and only 12 percent favor loyalty programs at the single brand level.
Ultimately, they want their loyalty programs to be exclusive, elite, and efficient, with 20 percent of respondents saying that loyalty brands were not sufficiently tailored to their shopping habits.
The best advice to retailers who want to snatch up the Millennial market? Pay attention to them. Millennials are a cultural force reshaping the retail landscape. Incentivize actions that generate insights. Focus on brand engagement that creates content, and reward your best customers early and often.