Marketing

3 ways retailers can appeal to millennials this holiday season

It's time retailers gained a better understanding of the shopping habits of millennials.

Photo by istock.com

December 21, 2022 by Marc Mezzacca — President, CouponFollow

This holiday season, competition for consumers' dollars will be stiff. Even though pundits predict 7.5% growth in retail sales in Q4 (Bain & Co.), inflation-wary buyers are tightening their belts — and changing the ways they shop.

So, how do retailers appeal to consumers in these uncertain economic times? The solution may lie with gaining a better understanding of the shopping habits of millennials, a.k.a. America's most populous generation. Here are three ways retailers can address the latest millennial shopping trends as we enter the heart of the make-or-break season.

Mobile is king, so make phone-shopping easy

According to CouponFollow's 2022 Millennial Shopping Trends survey, 80% of respondents do the majority of their shopping online, which is perhaps unsurprising given the shift away from brick-and-mortar during the pandemic. In fact, millennials now primarily use a mobile phone for more than half of all their shopping. Not only do they prefer to shop on their phones, but they expect that experience to be seamless. For 42% of respondents, a smooth checkout process is the most important driver in making shopping decisions (an increase of 13% since 2019). That shift in expectations creates a tech-forward opportunity for retailers.

The takeaway: Just as design has gone to mobile first, so too should the entire shopping experience. Retailers who build mobile sites that are easy to navigate, fast, secure, and create a smooth checkout experience, have a better shot at capturing that 56% of millennials who primarily shop on their phones.

Referrals boost purchases, so nurture authentic recommendations

Word of mouth has long been an effective, albeit elusive, tool for boosting sales. With social media in the mix and personalized product recommendations a click away, consumers now have more avenues to what they perceive as legitimate reviews and advice.

Online referrals via social media are hugely influential. 78% of millennials say they follow brands through social media, and more than 48% of them have made at least one purchase through platforms, like Facebook, in the past year. While Facebook and Instagram currently dominate that landscape, upstart TikTok is next in line, currently shaping the shopping habits of 12% of millennials (and 16% of consumers aged 25 to 29). Personalized product recommendations are also increasingly driving shopping decisions for all shoppers. From 2019 to 2022, the importance of product recommendations for survey respondents nearly doubled. This affinity for personalized social recommendations, opens the door for retailers to answer the demand for shopping guidance.

The takeaway: Transparent, authentic referrals resonate with millennial consumers. Whether retailers tap into the rising TikTok trend or step up tech in terms of product recommendations, creating forums for trusted guidance and advice across platforms is increasingly important.

Deals matter, so test and communicate your promotions well

According to Deloitte, e-commerce sales will likely grow by 12.8% to 14.3%, year-over-year, during the 2022-2023 holiday season. Since e-commerce promotions tend to keep pace with the rise of online shopping, consumers have been conditioned to not only score shopping deals and discounts, but also to expect them. For 63% of millennials, finding deals is the most important factor in driving purchasing decisions.

Millennials prefer percentage-type discounts (a.k.a. 10% off) over other kinds of deals. Notably, offering a 20%-off deal may be the tipping point at which millennials would consider switching brands. Offering a deal or discount is just the beginning. Customizing and communicating promotions can be an effective way for retailers to tap into millennial shopping psychology and effectively nudge prospective buyers toward checkout.

The takeaway: Deals are not a one-size-fits all game. Just because a competitor offers free shipping, doesn't mean you should. It's vital that the consumer perceives whatever promotion you offer as a good deal. And be sure to test out the deal's effectiveness. For example, if you cut prices by 5% instead of offering free shipping, does your prospective buyer (who may be new to your company) understand that prices have dropped? Maybe not. Instead, crystal clear deal communication (such as free shipping or a 10% discount) could be the better path to securing that buyer.

Trends to keep an eye on in the future: Crypto and Buy Now, Pay Later

Consumer awareness of both cryptocurrency and buy now, pay later options is on the rise. One in three millennials has made at least one purchase using some form of cryptocurrency in the last year, and more than 40% of millennials say they have used BNPL in the past year. Both trends are relatively new to the e-commerce scene. The jury is still out on how these trends will play out, but it's worth keeping an eye on them as we move into 2023.

The upshot

Millennials currently wield roughly $2.5 trillion in spending power. By making the mobile shopping experience smooth, creating space for authentic referrals, and offering well-thought-out deals, retailers can connect more efficiently and effectively with 73.2 million potential shoppers — and their hard-earned dollars.

About Marc Mezzacca

---