Today the consumer drives the retail world. With millennial (24-40 year olds) and Gen Z (18-23 year olds) shopping expectations and shopping power on the rise, it’s important to appeal to the requirements these shoppers set for retailers. Mainly, Gen Zers and millennials look for a seamless shopping experience according to Accenture.1
With instant gratification and high expectations, these younger shoppers require that e-commerce sites be easy to navigate, give them plenty of options and are tailored to their personal needs. Retailers that don’t meet these expectations do so at their own peril — the combined spending power of Millennials and Gen Z is estimated to be nearly $3 trillion, according to a financial survey by YPulse.2
Here are three tips on how you can continue to attract millennial and Gen Z shoppers to your brand.
1. Power up the personalization
Personalization and a seamless experience go hand in hand. Product recommendations, quick and easy checkout and flexible payment options that allow customers to manage their purchases in a way that works best for them all make the shopping experience feel more personalized.
Providing flexible payment options and letting customers know about those options early in the shopping journey can help retailers increase their sales. “With PayPal’s new ‘Pay in 43’ installments solution, retailers get paid upfront at no additional cost or risk,” said Greg Lisiewski, vice president and of Global Pay Later Products at PayPal. He noted that businesses that promoted PayPal Credit4 — another pay later product from PayPal on their site — saw a 21% increase in sales versus those that did not5, and merchants with pay-over-time messaging on their site saw a 56% increase in overall PayPal average order values6.
2. Allow for more customization of the experience
Alongside feeling “known,” younger generations also want to customize experiences to their preferences. And this goes beyond just product purchases to the experience itself. Among Gen Zers, 75% are more likely to buy a product if they can customize it, according to an international study of Gen Z conducted by The Center for Generational Kinetics.7
Millennials — who are now between 24 and 40, according to Pew Research8 — are digital natives, meaning they are technology-savvy and grew up living life online. They are likely at an age where they are now “adulting.” They are starting to build careers, get married, buy homes and have children. With these milestones can come increased spending, larger purchases and new unforeseen costs.
“This combination of digital native and ‘adulting’ makes millennials a prime audience for flexible, digital payment options like ‘buy now, pay later,’” Lisiewski said. As reported in The Ascent, a Motley Fool publication, 37.71% of consumers aged 18-24 and 46.77% of consumers aged 25-34 have used a buy-now-pay-later service.9
“They are savvy shoppers who know how to find the best deals and also look for flexibility and control in every aspect of their lives. Shopping is no different, which is why buy-now-pay-later tools can be so attractive to them,” Lisiewski said.
3. Offer financial flexibility
Having flexible financial-payment options like buy now, pay later can allow millennials and Gen Zers to continue to buy what they want and need — even when their finances are tight. “There is a strong chance they’ve made the choice to add the item to their cart due to the option to pay over time, which means they’re more likely to move forward with ultimately making the purchase,” Lisiewski said. Research backs this perspective. In an online study commissioned by PayPal and conducted by Netfluential, 42% of merchants said that buy now, pay later financing options help reduce shopping-cart abandonment.10
There’s no reason for young shoppers to shop with your brand if you’re not catering to their shopping preferences and mindful of their ability to spend — especially if someone else out there is doing it better. To keep up with these young shoppers, retailers need to provide experiences that offer both instant gratification and the flexibility to enable a frictionless shopping experience.
1Christopher Donnelly and Renalto Scaff, “Who Are The Millennial Shoppers? And What Do They Really Want?” Accenture, accessed Dec. 3, 2020, https://www.accenture.com/us-en/insight-outlook-who-are-millennial-shoppers-what-do-they-really-want-retail.
2 “Millennials And Gen Z Teens’ Combined Spending Power Is Nearly $3 Trillion In 2020,” YPulse, Jan. 9, 2020, https://www.ypulse.com/article/2020/01/09/millennials-gen-z-teens-combined-spending-power-is-nearly-3-trillion-in-2020/.
3 About Pay in 4: Loans to California residents are made or arranged pursuant to a California Finance Lenders Law License.
4 PayPal Credit is subject to consumer credit approval
5 Average annual incremental sales based on PayPal’s analysis of internal data among 210 small- and middle-market merchants with annual online sales up to $37 million with messaging and buttons against a broader group of merchants that did not, with 24 months of continuous DCC volume between January 2016 and November 2019.
6 Average lift in overall PayPal AOV for merchants with PayPal Credit messaging versus those without, 2019 PayPal internal data
7 “Generation Influence: Gen Z Study Reveals a New Digital Paradigm,” Business Wire, July 7, 2020, https://www.businesswire.com/news/home/20200706005543/en/Generation-Influence-Gen-Z-Study-Reveals-a-New-Digital-Paradigm.
8 Michael Dimock, “Defining Generations: Where Millennials End and Generation Z Begins,” Pew Research, Jan. 17, 2019, https://www.pewresearch.org/fact-tank/2019/01/17/where-millennials-end-and-generation-z-begins/.
9 “Study: Buy Now, Pay Later Services Growing Quickly Among U.S. Consumers,” The Ascent – A Motley Fool Service, July 20,2020, https://www.fool.com/the-ascent/research/buy-now-pay-later-statistics/.
10 An online study commissioned by PayPal and conducted by Netfluential in August 2020 involving 1,000 U.S. PayPal SMB merchants selling products directly to consumers through a website or e-commerce platform. The sample is made up of merchants in different verticals, 200 in fashion, 200 in cosmetics and 600 across home goods, furniture, garden, electronics and sports.
via https://www.aiupnow.com
, Khareem Sudlow
