More Than Hashtags: Understanding the Millennial Demographic

January 9, 2015

Millennials. It’s hard enough to spell the word, let alone sell to this generation. But what is it that makes individuals born between roughly 1980 and 2000 so difficult for retailers to grasp? Is it the age difference? The technology-driven culture they’re accustomed to? Their wishy-washy device and purchasing preferences?

But it’s irrelevant how they make retailers’ lives difficult. Because whether you understand them or not, millennials exist, and their active shopping habits shouldn’t be ignored. Their total spending nets out to around $600 billion a year. And as more millennials graduate from college and enter the workforce, that number should only increase. By 2020, millennials’ purchases are predicted to make up 30% of all retail sales.

As we’re sure you’ve noticed, millennials are quick to flock to the newest device or social platform — soon leaving its predecessor in the dust. Just look at poor MySpace and BlackBerry. So how in the world do you put together a marketing plan for a flaky consumer? (#Sorrynotsorry, millennials.)

There’s really only one strategy: Stay agile.

You must be current, keep one ear to the ground and maintain a forward-looking vision to stay on top of the trends that millennials flock to.

There’s no magic spell for capturing the millennial consumer, but knowing the behaviors, values and opinions of this generation will help strengthen your marketing strategy.

Millennials Are Social

For many millennials, computers have been a means of socialization since day one. You have to remember that many in this generation don’t know what pre-internet days were like. Millennials grew up with AOL Instant Messenger, email, personal blogs, Wikipedia and MySpace.

socialSocial media is deeply embedded into all aspects of their lifestyle. Spending time on sites like Facebook, Twitter, Pinterest and LinkedIn (just to name a few) is a daily activity for most millennials.

Remember when hordes of teenagers flocked to shopping malls with their friends in the 1980s and 90s? Shopping is still a social event — it’s just moved online. Savvy retailers are finding ways to make online shopping fun with social-sharing tools.

Consumers, millennial or not, are 71% more likely to make a purchase based on referrals from social media sharing. And millennials sure do love to share. In fact, they’re almost four times as likely to share content on social networks as other generations and over twice as likely to click on content shared by their peers.

Social sharing is word-of-mouth advertising at its best. And it’s free! Here are some ways to use millennials’ habits to your advantage:

1.  Insert yourself into the conversation: Wanelo and Pinterest are two shopping-related social media platforms soaring in popularity these days. These networks contain images of billions of products shared by members looking for inspiration and ideas. If your product listings aren’t optimized for social sharing, you’re being left out of the conversation.

Just look at how Amazon and Twitter joined forces to create #AmazonCart and #AmazonWishList. The key is putting your products in a context where consumers can relate to them — wherever they may be — and making the experience easy to share with their networks.

2.  Incentivize them, but be transparent about it: Retail marketers are often on social media to sell — and millennials can see right through your tactics. Own up to it and engage with your audience authentically. Get to know them and then use the data you receive to better serve them. Trust us, they’ll appreciate it. Likewise, if you make a mistake, admit it. You’ll likely earn their trust.

Successful social media content must provide the same value and emotional benefits that consumers seek when they come to the platform in the first place.

3.  Look to the East: For a glimpse into what your future could look like, educate yourself about what’s going on in China’s e-commerce world right now. Chinese retailers are taking interactive social commerce and consumer engagement to the next level via social media platforms like WeChat and Weibo, helping shoppers through the buying process via live chat and ongoing customer service.

Millennials Are Frugal

Remember your first real job? As we all know, most entry-level job salaries aren’t the most lucrative thing out there. Most millennials have tight budgets and are careful with their spending. A third of millennials purchase only items they deem necessary, and nearly three-quarters of them spend ample time online researching items before they purchase.

With that said, pricing should always be at the forefront of your e-commerce strategy, regardless of the target demographic. The internet is a vast place, and better prices are often around the next corner for the savvy shopper who knows how to browse.

Here are three ways you can adapt to millennials’ spending habits:

1.  Offer free shipping: The power of free shipping can’t and shouldn’t be underestimated. In fact, shoppers vote “free shipping” as the number one reason to buy online instead of in a brick-and-mortar store. Millennials are no different.

If you have to raise a product’s price slightly in order to offer free shipping, it’s worth it. Unsure how much to raise it by? Just average the shipping costs for the farthest distance and the closest distance, and it will likely average out.

2.  Promote yourself and your sales: To give your Product Listing Ads (PLAs) an extra boost, try Google’s Merchant Promotions, which add a “special offer” link to the bottom of your product ads. When shoppers roll over the link, a promotion code for a percent or monetary amount shows up. The best part? It’s entirely free for retailers.

3.  Dare to compare: Use comparison shopping engines (CSEs) to put your well-priced products head to head with competitors’ products. In addition to the popular Google Shopping, there are many other opportunities via CSEs such as PriceGrabber, Yahoo, Shopzilla and more.

Millennials Are Mobile

Surprise, surprise — millennials are on their phones. Their beloved mobile devices are practically glued to them.

mobileMillennials were born into an era of rapidly evolving and accessible technology, so they’re able to quickly adjust their behavior to the newest, most convenient devices. Naturally, most of them have used their smartphones to purchase products online.

Mobile commerce will grow to 27% of total online spend by 2018. If you want a piece of that pie, you better make the necessary adjustments:

1.  Be accessible on all devices: Year after year, the number of devices, platforms and browsers that consumers use to search for products grows. The challenge is creating a consistent and user-friendly experience for every device. With responsive design, your website can detect the device and deliver the site content in the best layout and resolution for that device.

2.  There’s (already) an app for that: Don’t waste money and time building and promoting your own app. Mobile users are constantly bombarded with new apps, and chances are, those apps are much cooler, more engaging and easier to use than yours. Instead, piggyback on already existing marketplace apps, like Amazon and eBay. Your time will be better spent optimizing your listings on those marketplaces, because they give you access to built-in bases of millions of loyal consumers who download and use these apps regularly.

3.  Advertise on mobile: Search ad revenue originating from mobile is predicted to surpass desktop search revenue in 2016. Yahoo Gemini is a new ad marketplace for mobile search and native advertising. It’s a great way to tap into the mobile and native advertising market.

Millennials Are the Future

This wave of young adults is equipped with the power of technology that past generations lacked. Yes, millennials are quicker to adapt to new trends than older generations, but their habits are a window into the future. The buyer behavior they initiate is often an early indicator of the buyer behavior that ripples out into other generations.

If you refuse to clue into the behavioral trends of the millennial demographic, you’re setting yourself up to become obsolete — if not this year, then shortly down the road.