By the year 2020, the millennial generation will make up 30% of total retail sales in the United States, and they currently collectively spend about $600 billion per year. This fact means this age group has, and will increasingly have, a large economic impact. The question business are asking, is how does this generation differ in terms of loyalty to brands?
Millennials are different in their habits because they utilize social media as a main platform for shopping. They also use social media as a platform for reviewing products, services, or businesses, so a business having a social media presence is extremely important.
How do millennials discover brands?
- Nearly half of those surveyed said they did so from someone else following/‘liking’/pinning/tweeting info on social media.
- Millennials make more general use of social media to research possible purchases. In an August 2014 survey of US 21-to-32-year-old internet users,
- 52% cited social sites among places where they gathered information about “new products or brands that interest you.”
- This ranked social sites behind friends/family (75%) but ahead of paid advertising (41%)
Why do millennials interact with brands?
- 36% of those surveyed said they did so “to receive a coupon/discount/promotion.” –
Customers aged between 17-34 will spend $200 billion annually from 2017 forward.
- Their buying power will only continue to increase over time
What kind of loyalty programs are millennials looking for?
- Programs behind brands that reflect who they are and their personality. They prefer to have a two-way conversation with the brands.
- Research done by Accenture found that almost all millennials want brands to actively work to attract them, and admitted they can be swayed by coupons in the mail, email, or text message.
- Because of how intertwined their lives have been with technology as they have grown up, millennials will expect the technology behind your loyalty program to work. For example, utilizing an old app interface will drive away millennials.
- 15% of millennials surveyed said points influenced their most recent purchase
- 60% of millennials surveyed want loyalty programs to be fun/entertaining, and they want to feel like they are part of a community.
- For example, they enjoy being rewarded for behavior they enjoy doing (I.e., sharing a video, liking a post, leaving a review for other customers, which makes them feel part of a community)
- Millennials would choose status based rewards over free products
- They want to feel like VIPs, and the company cares about them
- Having levels within your loyalty program can help it feel like a fun game to the customer, always striving to get to the higher level
- Millennials enjoy supporting a good cause
This generation is quickly becoming the age group brands need to focus on. Understanding their key drivers and needs will help businesses tap into this market.