“Cyber Monday” sales exceeded last year by 14%, thanks to plenty of deals and rising consumer confidence. Consumers bought nearly 30% more items per order this year versus last year, and 10% more items per order online than they did in stores on Black Friday.
Based on consumer survey data from Mintel (Online Shopping US), it’s safe to say Millennials played a role in the surge in online shopping last week. Compared to older age groups, people 34 and under are more likely to shop online. While overall they may not have the spending power of older consumers, their willingness to shop online makes them disproportionately important to online retailers.
- . When presented with a list of 25 major online retailers, only 30% of those 18-24 years old and just 29% of those 25-34 years old say they have never purchased online from any of those listed; the comparable number of all other groups is 42% or higher.
- Amazon has the strongest penetration of all online retailers among Millennials. Forty-one percent of 18-24 year olds and 41% of 25-34 year olds have purchased from Amazon; every other age group is 32 % or lower.
- Millennials are more likely than older shoppers use the store to research, and online to buy. Thirty-seven percent of 18-24 year olds and 41% of 25-34 yearolds say they price comparison after a store visit. This compare to just 31% for 35-44 year olds and 32% for 45-54 year olds.
- Millennials are more likely to pay attention to online peer reviews. Sixty percent of 18-24 year olds and 60% of 25-34 year olds “read consumer feedback online about products or services before making a purchase” compared to just 55% for 35-44 year olds an 51% for 45-54 year olds.
Two factors hold Millennials back from doing even more shopping online.
First, many 18-24 year olds lack electronic payment ability. 40% of 18-24 year olds and 46% of 35-44 year olds say they prefer to do business with retailers that accept Pay Pal or another service they are signed up with. This is a higher level of agreement than for other age groups.
Second, many lack the funds to do much shopping, at all. According to a new Fidelity study, nearly two-thirds of Gen Y checks their balance before making a purchase of $300 or more. (“Recession Makes Gen Y More Conservative“)
“Over 70 percent (of those surveyed) are very concerned about their finances and have set the goal of daily money management and budgeting as their biggest focus. Most Gen Y individuals are using mobile technology to stay updated on their cash flow situations with 64 percent reporting that they typically check their balances online before making a purchase of $300 or more. On average, this younger generation holds over three credit cards with one fifth (20 percent) carrying a balance greater than $10,000 and one in four (25 percent) believing they will never be free of credit card debt during their lifespan.”
How can online retailers encourage young shoppers to spend online?
Although they are comfortable shopping online, the youngest Millennials (18-24) are the most careful shoppers. With money tight, it will come as no surprise that Gen Y is the age group most receptive to online coupons. According to IRI, 51% of 18-24-year-old shoppers indicate they would be very likely to use coupons presented to them online, the highest of any group. Mintel research shows that EBay enjoys the highest penetration of any age group among 18-34 year olds.
They want to deal with retailers they know and buy products they are familiar with. Of all the age groups studied by Mintel, they were the most likely to agree with these three statements:
I will only buy products from brands I am familiar with when shopping online
I will only make an online purchase if I am familiar with the product I am buying
I will only make an online purchase from a store I am familiar with
For marketers, this is a warning not to take young shoppers for granted. They like shopping online, but it may take more effort to convert them to buyers than older age groups. Brand familiarity, online reviews, online coupons, and the abilty to see the merchandise in store before buying will all be important to winning their business. They also like gift cards and are avid users of ‘wish lists’. Perhaps a strategy for reaching Millennials is to make it easy for them to let others know what they like.