You’ve probably heard a lot in recent years about how millennial shoppers are affecting ecommerce and that winning them over is vital to your success. But before we talk about how to appeal to millennial shoppers, it’s important to first understand why it’s so critical to do so. Why does everyone — from banks to mass retailers to D2C brands — care so deeply about this generation of consumers? We often get so caught up in the ‘how” that sometimes we forget about the “why.”
Millennial spending power
As of 2019, millennials will overtake boomers to become the largest generation, numbering 73 million in the US alone. By 2030, their aggregate annual income is expected to surpass 4 trillion dollars. This means millennial spending power will be the greatest economic driver for the next 20 years.
Conversely, unlike the boomers or Gen Xers, millennial spending habits are defined in part by the fact that they entered adulthood as the Global Financial Crisis hit and have been burdened with enormous student debts. From 2005 to 2012, student debt accelerated to become the largest non-mortgage debt, affecting what, where, and how millennials buy.
Millennials are the digital-first generation, the most diverse generation, and the most mobile. This combination makes for an unprecedented mixture of spending habits and expectations.
What do millennial shoppers want?
So we know that this generation has the purchasing power to help businesses thrive — but how do we use that information to service this critical customer base appropriately?
Start with a core product and messaging that builds a trusting relationship with millennials shoppers. There is a plethora of advice out there on the numerous ways to build a trusted brand, but it’s critical to meet customer expectations on a practical level.
The most important piece of the customer experience is the actual transaction. A millennial shopper has found your site, talked with the live chat support team, engaged with the product page, and decided that yes, with the limited spending power that my burdensome student debt has left them, they want to buy your product. At this point, it’s vital that the checkout and delivery experience is as good as it can be.
This is the low-hanging fruit for any merchant, yet so many online stores neglect this key aspect of the customer experience. Enable the customer to pay you the way they want to, then get your product to them as easily and quickly as possible.
Offer the right payment methods
Imagine an online store that only accepts cash. Actual cash. That would be useless in most people’s eyes. Yet many merchants are oblivious to the changing preferences of millennials and think that if they accept credit cards, they’re all set.
However, assuming that all customers — particularly millennials — can and want to pay with credit cards is a mistake.
Remember that millennials grew up during a recession and have more student loan debt than ever. This means that although debt isn’t a foreign concept to millennials, the way that they interact with it is dramatically different from older generations.
Most millennials are reluctant to make any purchases that might further increase their financial obligations. In fact, Fortune reports that only 1 out of 3 millennials actually has a credit card at all. This is problematic for online stores with aspirational or big-ticket price points since impulse credit card purchases usually comprise the majority of sales. Interestingly, Forbes reports that 46% of millennials use debit to pay for their everyday purchases, while only 29% of millennials regularly use credit cards.
It’s essential to offer millennials a payment option that won’t set off any recession-induced red flags at the checkout finish line. Traditionally, the ability to buy now and pay later is limited to those millennials with a credit card, but those with the ability to pay later are more likely to make the purchases that they want and need.
Enter QuadPay. QuadPay is an alternative payment provider that allows brands to give their customers the opportunity to split their purchases into four interest-free, automatic installments. The customer gets the product straight away and the merchant is paid upfront — a win-win experience.
Create the best shipping experience
It is worth noting that 63% of customers consider the speed of shipping an important factor when choosing where and what to buy online. The digital shift, Amazon, and the power of millennial preferences makes it more important than ever to get products to customers as quickly as possible. Overcomplicating this with hidden fees or additional charges can drive shoppers away: 61% of shopping carts are abandoned because shipping, taxes, and extra fees are too high, and 74% of customers rate free shipping as important when checking out.
Streamlining shipping and returns to be as simple, transparent, and fast is critical to ensuring customer expectations are met through and beyond the checkout process.
Offering two-day shipping is one way to appeal to (and increase conversions from) a generation that has become accustomed to near-instant gratification. For example, ShipBob’s 2-Day Express program makes it incredibly easy for merchants with a Shopify store to increase conversion rates as well as manage fulfillment and shipping by splitting inventory across the US. The 2-Day Express program adds a new shipping option to your checkout that is only displayed to customers with a shipping address within the areas of guaranteed 2-day coverage — and it’s proven to increase conversions:
“With ShipBob’s 2-Day Express Program, we’ve seen an 18% reduction in cart abandonment.”
Founder of My Calm Blanket
Appealing to millennial shoppers
Your brand is incredible and thoughtful and your products serve a customer need — but you’re seriously missing the boat if you aren’t enabling millennials (read: the generation with the largest spending power in the years to come) the ability to pay the way that they want to and get their orders quickly and affordably. Leveraging ecommerce partners like QuadPay and Shipbob can help your business win over millennial customers to increase conversions and reduce cart abandonment.