Millennials make up an increasingly significant piece of the global spending pie. A study from the Dartmouth Center for Marketing Research estimated that millennials born between 1980 and 2000 possessed a spending power of $2.45 trillion worldwide in 2015. As the younger portion of the generation begins to control more money and become more financially independent, that number is expected to rise, and businesses want to be there when it does.
The changing face of interactions
A fluid technological landscape has changed the way we shop, the way we bank, the way we interact with businesses. It isn’t a phenomenon exclusive to millennials, but millennials are the ones embracing this new age at a higher and faster rate.
It comes as no surprise that mobile is direction retailers need to go to reach millennials. With 89 percent of millennial shoppers connecting to the Internet from their smartphones, it’s the fastest and easiest way merchants can get their foot in the figurative door in a world filled with distractions.
Social media also plays a serious role in the changing tide of consumer spending among young adults. Traditional marketing is losing out to social media as the place millennials are learning about new products or services. Facebook leads the way for those looking to find out more about and connect with a company, but Twitter and Pinterest, among others, are also major factors. In fact, 55 percent of respondents to a Blackhawk Engagement Solutions survey reported that social media is their “go-to” source for shopping news and information. Television, the study shows, ranked sixth.
But beyond simply shopping around, the Dartmouth report stated that another main reason millennials “Like” or “Follow” a particular brand or retailer or product is to show support.
Social media has the ability to evoke an emotional response from users in ways other forms of media and marketing cannot. Television or print advertising can never make someone feel as connected to a brand as social media can. After all, here are thousands of other people who feel the same way I do, bound by our love of Brand A … united we stand!
What’s nice for companies is that this kind of loyalty can convert to sales rather easily.
Tapping into tech
It’s not just one and done if millennials like a brand. An Edelman study showed that 80% of young Americans say they “keep coming back” to show their loyalty. But they’re not opposed to a perk here and there, and they’re quick to sign up for a loyalty program.
More than 75% of millennials participate in some form of loyalty or rewards program. Some of the key reasons for joining include members-only sales and events, charitable contributions and coupons. Loyalty programs have shown to deepen the connection between customer and company, with 68% of millennials saying they change when and where they buy something to maximize their benefits.
But this number comes with a caveat. Truth is, millennials can also be a little finicky. Loyalty programs can compel them to reveal some personal information for a more targeted marketing approach, but 49% have terminated their participation after they felt like they were receiving communications not relevant to them.
Keeping up with the technology is also a key aspect for companies to keep in mind with regard to their loyalty programs. As mentioned earlier, millennials want to be able to do just about everything on their smartphones, and they certainly don’t want to keep attaching mini cards to their key chains. A loyalty program that has a smartphone app makes a measurable difference in retention. And, if that app also allows for mobile payments, that’s an added bonus with a sizeable gap between millennials and baby boomers. A COLLOQUY survey revealed that 42% of millennials are willing to continue participation simply because of a mobile payment option, while just 15%of baby boomers said the same thing.
