This is the third in a series of three posts on the future of payments. Check out the other posts to see what the near future looks like and what subscription businesses will look like in 2030.
To thrive as a subscription-based business, you need to understand the buying patterns of your consumers. This is especially true for millennials — those people born between 1981-1996. They’re now the largest generation in national history, representing 92 million U.S. consumers.
As a group, millennials have high disposable incomes and control more than $600 billion in annual buying power. By 2020, they’re are forecasted to spend $1.4 trillion annually, accounting for 30% of total retail sales.
In particular, millennials are more likely than other generations to consider subscription-based services. Close to 33% of millennials report being members of at least one retail subscription service. This means millennials (and their purchasing habits) can have a significant impact on the economy and on your business, specifically.
As a group, millennials grew up just as personal computers were becoming ubiquitous and as technology was becoming more accessible. They’re plugged in and use digital devices in most areas of their lives, including communication and purchasing. When it comes to the buying experience, they are tech-savvy and expect convenience, personalization, and transparency.
It won’t surprise anyone that millennials prefer to conduct business online. With that said, in order to drive growth, businesses will have to work smarter and adapt their technology strategies to suit the needs of this generation.
Putting millennials at the center of your business today can help you succeed in tomorrow’s ecommerce space. So, what can you do as a company to win and keep their business?
Millennials expect a seamless, convenient, and hassle-free online purchasing experience. They are quick to move on to the next retailer if the buying process is too complicated or time consuming.
In addition to a quick and easy checkout, shipment speed is also important. A slow delivery (or simply a lack of information on when a product will be delivered) can be a dealbreaker.
Millennials make purchases on the go — to the tune of 40% of their purchases happening on a phone. Their payment trends are leaning heavily toward digital wallets, with nearly half of millennials having used a mobile wallet.
Digital wallets are even more convenient than a payment card, storing payment information securely on one’s device. Since most people around this age carry smartphones, their digital wallet is accessible at all times.
This is why a sophisticated, user-friendly mobile purchase experience is essential in today’s ecommerce environment. A seamless digital payment experience will win millennials over, time and time again.
Millennials want to be valued. In return, they’ll be loyal customers. To help them feel valued, businesses are taking a more personalized approach when creating customer experiences.
One easy way to get started is to offer loyalty campaigns. In fact, 78% of millennials will buy from a brand with a loyalty program over a brand without one.
Along the same lines, millennials respond to targeted offers, such as exclusive discounts and deals. Personalized offers translate into a higher conversion rate and increased sales.
This can affect every part of your business, including marketing and advertising:
- Using targeting and segmentation in your email marketing, to make sure that you’re sending out the most relevant communication and offers possible
- Incorporating a solid retargeting strategy into your PPC ad campaigns, so that people are getting ads that match their specific wants and needs
- Creating a customer onboarding process that meets new customers where they’re at and gives them the help they need to see the value in your product
For millennials, it’s all about the experience and sharing it in real-time with others through social channels. They rarely shy away from promoting products and services they love. In fact, 44% of millennials are willing to promote products or services through social media in exchange for rewards.
Millennials trust other shoppers much more than brands, often looking for guidance in online reviews and social posts before making a purchasing decision. And, as the first generation to grow up on social media, it’s not uncommon for a millennial shopper to have thousands of followers who are watching and listening. That’s why it’s critical to give your customers the best experience possible.
Millennials want to connect with brands. They’re turned off by sales speak, but stories resonate with with and drive them to buy.
Millennials want to feel like they’re making a difference, so they buy from socially conscious and transparent businesses. If your company can show that it has a higher purpose, one that isn’t just “making money,” it can foster trust and loyalty with millennials.
Ask yourself, “Does my company have a purpose outside of making money? Is that purpose communicated on our website and other collateral?” If the answers are no, it’s time to figure out how you can change that.
To reach and engage millennials on a group, you don’t just need an online presence — you need one on social media. They’ll have a conversation about a brand on social media whether the brand is on the platform or not, both before and after the sale. In fact, 59% of millennials use social to share their purchasing experiences, and 41% of them only use social media to make these recommendations.
It’s in a business’s best interest to be aware of what consumers are saying online about their brand as well as the competition’s brand. This allows businesses to adjust their products, services, and business strategies to meet the market demand.
Millennials are always willing to share their thoughts, especially using social media or online reviews.
40% of millennials read both positive and negative feedback for nearly every product or service before deciding to purchase. Because of this, businesses need to be actively engaged and address any complaints in a timely matter. Taking action quickly can save your reputation and possibly turn an irate consumer into an avid promoter of your brand.
Reading reviews, promptly responding, and improving whenever possible will take your business to the next level — and guarantee you long-term customers.
Now that you understand how millennials are shaping the future of ecommerce, learn what you need to do to plan for your business’s future. If you’re looking to start a subscription business or want to make sure you’re on the right track, check out our Six-Month Success Checklist. Download it today and set yourself up to win: