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MBPT Spotlight: Study Offers Marketers Advice on Retaining and Attracting Millennial Consumers

Millennials right now are the most written-about demo group in the country, and a large portion of marketers are über-focused on finding ways to get them to buy their products.

The Intelligence Group recently conducted an online survey that delved into the shopping habits of 1,300 14- to 34-year-olds and came up with four themes that differentiate today’s young consumers from their predecessors.

Assorted media reports have covered these themes rather randomly, but few have reported in detail the suggestions the survey has for marketers who want to motivate millennials to actually buy their brands.

The survey finds today’s younger consumers shop with less of a specific purpose as their predecessors did, with millennials now finding as much enjoyment searching for products as they do in actually making purchases. To them, e-commerce has become its own form of entertainment, the study says.

The shift away from purposeful shopping demonstrates the development of a new “Fauxsumerist” mindset, the study says. And the Web has made it easier for millennials to be more than just consumers, resulting in a “MEtail” culture, where every consumer can also be a merchant of products, services, content or ideas.

The survey also describes another theme or characteristic of younger consumers as being the first generation of “NOwners” or individuals who prize access over ownership to the extent that the very concept of owning seems passé. These NOwners are increasingly turning to ownership alternatives such as renting, sharing and bartering.

And finally, the study says, “faced with a surplus of options and information, young people are more inclined than ever before to seek validation before committing to a decision.” And “this is made easy by the presence of online reviews, comments, likes and crowd-sourced Q&A sites.” All of this has given rise to a “Gut Check” response by many younger consumers to even the smallest and inconsequential daily choices.

So how do marketers react and respond? How do they reach this new generation of consumer?

The good thing about the new Fauxsumerism, the study says, is that younger consumers see no need to wait for an event, occasion or special sale to shop. Those traditional triggers for purchasing are seen by younger consumers as far too confining. “Young consumers can browse and opt to buy anytime and anywhere,” and marketers need to keep that in mind.

“Marketers should support young consumers’ Fauxsumerist impulses as a means of encouraging interaction with products even when a purchase is not immediately impending,” the study says. “Brands can invite and encourage consumers’ already developed ‘wishlisting’ tendencies. Although these lists and pinboards may appear to put purchasing on the back burner, they also provide individuals with an enduring visual reminder of the products they love, and can forge a stronger path to eventual purchase.”

Facilitating Discoveries

Brands should also begin to think about how to help consumers make discoveries in organic and unexpected ways, the study says. “Create e-commerce environments that encourage the inclination to click through a new collection or line. This model can be applied to traditional, offline retail spaces as well, and even beyond them. Consider building experiential spaces where individuals can happen upon items and services that they may not have discovered through a more direct approach.”

The MEtail trend signals a restructuring of the relationship between the consumer and the brand, the study says. “Today, individuals not only support companies but they also compete with them. This is not to imply brands are any less relevant in the retail landscape; however, it does urge them to adjust to a new way of thinking brought upon by this paradigm shift.”

The study says that if today’s Generation Ys and Zs think something is missing from the retail space or they want to see it differently, they’ll take it upon themselves to create it and offer it up to their peers.

“Brands need to recognize this tendency and should embrace opportunities to work with independent creators and sellers, rather than work against them or ignore them,” the study says. “Companies may consider funding amateur projects, offering workshops and tutorials where individuals can learn new crafts, and providing resources to help these would-be sellers manufacture what they make.”

The study cites how certain retailers such as Nordstrom and West Elm, through the Etsy Wholesale program, offer collections in which to feature MEtailers’ goods. Or they can ask amateur artists to design items for mass production. “Embracing young people’s MEtail tendencies will allow brands to innovate from the bottom up,” the study says.

Regarding the NOwner mindset, the study suggests that marketers now need to begin considering how it will alter shoppers’ relationships and engagement with brands in the long term.

“These consumers pose a challenge to standard attempts to engender loyalty and build a community of lifelong buyers,” the study says. “The new lifetime loyalty is less tied to consistent purchasing; rather, it presents itself as brand evangelism or ambassadorship.”

While some product categories such as technology may continue to benefit from traditional approaches to loyalty, the report suggest others “need to think creatively about how to stay front-of-mind among fickle consumers.”

One suggestion the study offers is to embrace collaborative consumption by offering NOwners alternatives to purchasing.

“Patagonia epitomized this approach with its successful ‘Don’t Buy This Jacket’ ad, which in 2011 encouraged consumers to consider recycling, reuse and resale before buying new,” the study says.

Patagonia’s annual sales grew nearly 40% in the wake of this campaign.

While the study acknowledges that few brands are likely to encourage their shoppers to rethink purchasing altogether, it suggests they “find ways to establish themselves as proponents of the share economy and its economic and environmental benefits.”

One suggestion: Brand-sponsored communities, through which individuals can connect with one another to trade, resell or share brand-specific products.

The study says while older shoppers may have done a quick price check before making a purchase, younger consumers are crosschecking many more characteristics such as a brand’s quality, longevity, taste, fit, feel, safety and peer reception.

Gut Reactions

“For all the recent worry about showrooming, few outlets have grappled with the fact that in-store shoppers are not using their mobile phones just to check for lower prices online; they are, in effect, confirming whether or not they should purchase the product in question at all,” the study says. “A quick Gut Check on a mobile screen provides the validation young individuals need to move forward. They may not be as brand loyal as prior generations, but in their search for ways to quantify a smart choice, they are loyal to the numbers.”

Gut Check behavior on the part of younger consumers has spawned the creation of such sites as Rank & Style and Cricket’s Circle that take the guesswork out of users’ purchasing decisions, the study says.

One smart move by a retailer, the study cites, came with Nordstrom tagging its in-store merchandise by labeling where the items in question have been most pinned on Pinterest. Another example cited is grocery chains that feature Amazon reviews on their shelves.

As far as the numbers data from the report, here are a few tidbits:

  • 54% of millennials say they do more research before purchasing than they did five years ago.
  • One-third of millennials say that browsing for items is more fun than actually purchasing them.
  • Half of millennials say they browse for items they don’t necessarily plan on buying.
  • 40% of millennials create wish lists of items they want to buy.
  • 35% say they would pay full price to access an item when they need it, rather than owning it.
  • 36% of 19-24-year-olds only make purchases that are “really necessary.”
  • 72% of millennials research or browse online but then purchase in-store.

“These results show how millennials, with their intense sense of collaboration and ever-expanding ability to access information, are forcing tectonic shifts in purchasing patterns,” says Joe Kessler, president of the Intelligence Group. “This should come as welcome news for consumer product companies and retailers who are staying close to their customers and prospects, speaking their language and understanding their world. Those who are still relying on traditional means of attracting and retaining new customers are likely falling further behind.”