So you're trying to categorize certain target demographics for your store, but you don't know where certain age brackets begin and end. What's equally, if not more, confusing is trying to determine each demographics' buying habits, how they use the Internet and how they reach your online storefront.
Trying to reach the right target market is never easy, but you can effectively market to the right age groups if you understand their needs.
There are a few loose interpretations of the term, but millennials, as defined by the U.S. Census Bureau, are those between the ages of 18 and 34 (1). The 73 million people - or one-fourth of the domestic population - in this age bracket make up the largest of any such group in the last 30 years, which makes the millennial generation arguably the most important ecommerce customer demographic in recent memory.
Separate Forbes data revealed that the millennial generation - the most tech savvy age group in American history - possesses an annual buying power of more than $200 billion (2). With such a heavy financial pull in various marketplaces, Gen Y are the trendsetters and influence other generations' behaviors as a result. They're fiercely independent and are, by and large, more educated than elder generations.
Although millennials have more than $200 billion in buying power, more of them are struggling financially because of the $1 trillion in debt they have accumulated (3). As the cost of education increases, the volume of debt Gen Y incurs also grows.
Although a majority of young adults graduate college with student debt, that's not to say they won't spend their hard-earned money at your business. Today's young, digital shoppers are more likely to buy a majority of their products and services online, with a recent industry study revealing 40 percent of males and 33 percent of females between ages 18 and 34 would buy everything online if they could (4). The same study found that millennials spend more than one hour per day on e-commerce websites.
Certainly, digital shopping is a commonality among young adults today, but as smartphone technology continues to grow, so too will e-commerce purchases from mobile devices. Millennials are seemingly glued to their smartphones, so it makes sense that nearly three-quarters of Gen Y are making purchases from their smartphones (5).
In addition to desktop and mobile devices, young adults today are engaging with brands on social media. Millennials are spread across various social networks. Savvy online businesses are developing a presence on these platforms and interacting with customers in a more genuine and personal manner. Although millennials may not be directly buying your products and services from social media, they're developing brand awareness through their social networks, which is an important step in the customer lifecycle.
In terms of digital technology, millennials are likely interacting with your brand on various platforms and on multiple devices.
Certainly, engaging with millennials via social media is a great way to develop online brand awareness and establish a digital persona in your marketplace. Most millennials today have at least one social network profile, so it's not overly challenging to connect with this demographic on the Internet.
It's also evident that mobile advertising is becoming a priority in the digital marketing world, especially seeing as a majority of millennials are making product purchases directly from their phones.
However, interacting with Gen Y online isn't as easy as it may seem. Traditional advertising, where a company pitches its product to the viewer, doesn't seem to work on young adults today. In fact, 1 percent of millennial respondents in a recent industry survey said a compelling advertisement would increase the trust they had in a particular brand. The general consensus among millennials is that advertising is generic and not at all authentic.
That said, it's on you and your ecommerce business to create more personal and relevant messaging for your customers. Back-end data analytics can help establish a more complete customer profile by leveraging prior purchase history and predictive marketing to match what customers may have an interest in, based on what they've bought before. That type of personalization is exactly what millennials crave in their brand engagement because it demonstrates that your ecommerce business values their money and cares about their future purchases. In fact, 43 percent of millennial respondents said authenticity was more important in than content when consuming news. The same principle can be applied to advertising content: make it personal (5).
Another great way to connect with millennial buyers is to connect with them on an empathetic level. Recent research suggests Gen Y is more concerned with a business's core set of values than anything else and want to help make a difference in the world. More specifically, three-quarters of millennial respondents said it's either fairly or very important that a company gives back to society as opposed to directly adding to their bottom line. Given the aftermath of the Great Recession, young adults today are tired of facing financial stress, they want to support organisations that promote growth in and around their community.
A growing majority of millennials don't trust big businesses and turn their shoulder to corporate greed, which is why as a small business, it's important to promote any social and community involvement you may engage in. Millennials truly want to be part of something that's bigger than themselves, and if they see your business giving back to the surrounding community, they're more likely to become brand loyal. The sooner your business develops a deeper, more empathetic relationship with your customers, the higher your retention rates will rise.