As technology and globalization continue to fuel mass disruption, a new breed of consumer has emerged — one that's driven by speed, value and experience. This hyperempowered customer has created an array of unique challenges for retailers, many of whom are desperate to capture the attention of the generation who spearheaded this transformation: millennials.
With over 80 million members, the millennial generation is the largest in human history. Spending nearly $600 billion annually and poised to inherit $30 trillion in the next two decades, millennials now account for 28 percent of all daily per-person consumer spending — a figure that’s expected to rise to 35 percent by 2030.
In an effort to better understand this generation’s real-time needs, wants and desires, we polled 1,000 young people between the ages of 20-35 from all 50 states. Representing a broad economic scope, participation was evenly split amongst those who identify as male and female. The results were enlightening and culminated in the publication of the first-ever CouponFollow Millennial Shopping Report.
Perhaps most striking was the juxtaposition between online browsing and offline purchasing. While millennials have a reputation for being technology obsessed, as a generation they still make the majority of their purchases in brick-and-mortar stores. Fifty-three percent of respondents said most of their purchases are made offline.
However, that shouldn’t suggest millennials disregard technology as a critical shopping tool — just the opposite. Seventy-six percent of participants report they browse online before making a purchase — even if that purchase occurs offline.
What's the impetus behind this behavior? We believe the primary motivation is trifurcated between three key desires: convenience, peer feedback and savings.
On average, more than half of the millennials we surveyed said they search for coupons online before purchasing a product. While some particularly savvy shoppers may spend more than five minutes looking for a coupon or promo code, the majority will search for nearly three minutes. This makes sense when you consider the financial struggles many of these emerging adults encounter.
According to UBS, millennials are responsible for an estimated $1.1 trillion of the country's $3.6 trillion consumer debt. Meanwhile, their average earnings between 2009 and 2013 were $33,880 — down 9 percent in just a decade and the lowest since 1980 (after adjusting for inflation). This has created both a challenge and opportunity for retail brands.
Sixty-six percent of the millennials we surveyed said they would be willing to try a product from a competitor of their favorite brand for a 30 percent discount. While that discount may seem steep to some, it’s important to correctly contextualize the question. That number, according to our participants, is what would be required to switch from his or her “favorite” brand; it’s possible the desired savings could be significantly lower in more ambiguous categories.
Here’s what we know: personal consumption continues to be the largest contributor to the nation’s GDP, accounting for nearly 70 percent of the U.S. economy. As millennials advance in age and spending power, so too must the strategies developed and implemented by America’s retailers.
We believe that by adopting a hybrid approach to commerce that’s rooted in value and designed to empower authentic consumer engagement across a rapidly evolving suite of channels and platforms, brands have a tremendous opportunity to boost influence and amplify impact.
Marc Mezzacca is the founder of CouponFollow, a social-media based coupon code search engine and directory.