Yasen Dimitrov is the co-founder at Intelligence Node, a big data retail analytics company that serves the global retail community with its proprietary pricing and merchandising SaaS tools. Here, Yasen shares his thoughts on the challenges surrounding the rise of millennial shoppers.
In our industry and others, the term millennial creeps up more and more. Whether or not you’re a fan of the coinage, there’s no denying the millennials exist. And marketing to millennials provides a different set of challenges to retailers.
These shoppers are the first generation that is truly made up of digital natives. They have grown up using technology that keeps them connected and they rely on sharing information and on networking for many of their life decisions.
Shopping is an integral part of this connected world and they expect a seamless experience across channels, and an ‘always-on’ shopping experience.
Who Are The Millennials?
First things first, let’s define what we mean when we use the term; millennials are considered those who were born between 1980 and 2000, approximately.
This new customer base is so different from the previous generations. They grew up in a connected world, and they also grew up in an era that has seen the worst recession since the Great Depression. So, not only is this generation tech-savvy, they are also budget conscious. Broadly speaking, they identify with brands, but they also tend to switch brands if it will save them a few cents. Budget drives their decisions more than brand loyalty. They are also more environmentally friendly and so are attracted to eco-friendly brands and products. This generation values brands that are socially conscious and environmentally friendly.
In fact, 40% of millennials are willing to spend more on a product that will contribute towards a good cause, despite their quest for bargains.
Why Millennials Matter
Millennials are the emerging customer base, and form around 25% of the US population. By 2025, they will form 75% of the workforce. More importantly for retailers, they are expected to spend around $200 billion each year on shopping . Over their lifetime, they have a total spending power of $1.8 trillion .
Millennials are always connected; they prefer to use their mobile devices to shop. They prefer cashless shopping, and 44% would prefer paying using a mobile app.
Around 45% of them spend an hour each day shopping online and two out of three use their mobile devices to buy products. They use social media to read up on brands and products, and they rely on inputs from their online network when they make shopping decisions – even in-store.
They prefer shopping at places that provide personalized and targeted services, through their mobile devices.
Millennials, Omnichannel Retail, and Beacon Technology
Millennials shop through multiple channels – online, using their mobile apps, and at bricks-and-mortar stores. They expect a smooth and seamless service across all these channels and are not afraid to share their personal information for a focused shopping experience. They share their email IDs and mobile numbers more easily than previous generations and welcome targeted messages from commercial, educational, and other agencies. They view this more as a convenience than an intrusion.
The ability of current technology to collect personal information and location data through a person’s mobile devices can open up numerous possibilities for retailers. They can send alerts about special sales in their physical shops to customers who are in the vicinity. They can send promotions that are personalized based on the shopper’s previous shopping habit at the store to notify them about new products and special sales they will be interested in.
Beacons are special devices that can reach out and connect to mobile devices within reach, which can be up to 50 or 60 meters. They can send messages, track user location, and collect data about the user’s shopping patterns.
Using beacon technology, a retail store can send out messages to shoppers in the vicinity. For instance, a person who is shopping for winter apparel can receive a message on her mobile device from a department store she is passing about a deep discount sale on food products. There is a good chance that she will enter the store to check out the sale.
The same beacon technology can personalize the service while she is in the store.
She could be browsing through items on the home cleaning products aisle. She could be alerted about a new product that has become popular with shoppers. If she is an old customer, based on her preferences, a message could be sent to alert her about a special price offer on her favorite brand of cleaning product. While she is there, if she has purchased pet products before, another message could alert her to a special sale on dog food that is available only at the bricks-and-mortar store. A sales rep can be sent relevant information about this customer to help him direct her to the products she will be interested in.
This technology can pinpoint her location within the store and track her as she shops. Thus, the store could track her and collect information about the type of products she usually purchases, the brands that she buys, special offers that interest her, and so on. These could build up a good base of information that could further personalize her shopping experience.
Seamless Multi-Channel Shopping
Once she has finished shopping and has paid using her card or mobile payment app, the store can send her a thank you note with an alert on the reward points she has collected as a regular shopper. Millennials love loyalty programs that offer a wide choice of products on which they could use their reward points .
When she exits the store, she can receive a message about a sale on specific items that is offered only to buyers who use the store’s shopping app. The message could also notify her of a sale that will begin at the store’s online shop in a week’s time.
Beacon technology can also be used to enhance click and collect shopping experience. Millennials are great fans of this convenience. They can place an order while on the move through their mobile devices. When they are within the reach of the shop and within the range of a beacon device at the store, an alert could be sent to the sales staff to start assembling and packing the order. This speeds up the service and can be especially useful in fast-food stores where the order has to be fresh and hot to deliver the best experience.
Thus, a seamless personalized omnichannel shopping experience can be created using beacon devices. Many retailers, like Macy’s, have already successfully adopted beacon technology to deliver a seamless and personalized omnichannel retail  experience to their customers. Retail stores can use the services of retail analytics solution providers and consultants to build their location marketing strategies using geo-location data and beacon technology.
Research shows that around 82% of smartphone users turn to that device to influence their buying decisions , search for products and go through user reviews, and get inputs from their personal networks to help make their purchase decisions.
Take advantage of this influential medium to tailor your customer’s shopping experience to suit their personal needs and expectations. Stay ahead of the competition.