Retail 2016: Why Retailers should use Beacons to Target Millennials
Millennials—born between 1980 and 2000—make up the most influential key demographic in the growing retail industry as they were the first generation to grow up in the new world’s explosion of technology. They are confident, savvy, goal-oriented, and are often defined as the always-connected generation. And, they are now changing the rules of brand marketing, […]
Last Updated: May 10, 2018
Millennials—born between 1980 and 2000—make up the most influential key demographic in the growing retail industry as they were the first generation to grow up in the new world’s explosion of technology. They are confident, savvy, goal-oriented, and are often defined as the always-connected generation. And, they are now changing the rules of brand marketing, redefining purchase habits, and revolutionising shopping experiences as we know it. Millennial customers, with their tremendous spending power and trendsetting power, are clearly an enormous commercial force to reckon with. If we assess the U.S market alone, there are about 87 million millennials forming 27.5% of the total population. And they are estimated to spend about 200 Billion USD annually by 2017 and 10 Trillion USD in their lifetime as consumers. Image source: thefiscaltimes.com
With 75% of millennial purchases still being made at brick and mortar stores, retailers worldwide are now focussing on new ways to target this uber-connected group via adoption of new technologies such as iBeacon at their stores. Right from leading brands like, Macy’s, Coca-Cola and Target to publishing brands like Elle, retailers are busy trying to deliver a compelling customer experience to millennials by pushing the right message, at the right time. Today, most retailers are making headway on providing a consistent cross-channel experience and offering personalised interactions via beacons. They are equally focussing on using beacons to offer connected shopping experiences, integrated merchandising, flexible fulfillment options, and enriched services that can help make the overall shopping experience better and more memorable.
[Tweet “Millennials estimated to spend about 200 Billion USD annually on shopping”] With proximity marketing industry already on track to deploy nearly 400 million beacons by 2020, we have witnessed countless big retailers deploying beacons for their marketing campaigns. An important question then is – how do retailers target millennials through these campaigns. In this blog post, we bring you some of the things that retailers must keep in mind about millennials and how they can use beacons to target this demographic better.
1. Millennials are on multiple channels and devices Millennials are extremely tech-savvy. According to a study, they switch between laptops, smartphones, and TV on an average of 27 times per hour. Studies also show that 90% of millennials own a smartphone and that it is the most dominant method for them to connect to the web. Out of the millennials who are on multiple devices, 89% prominently use smartphones while 75% use laptops and 45% use tablets. Clearly, the easiest way to reach millennials is through their smartphones. Additionally, millennials also demand an ‘always on’ shopping experience, which is further spurred by smartphones.
Image source: thefinancialbrand.com
Key takeaway: Use beacon to go omni-channel – In order to target millennials, retailers should go omnichannel to develop a variety of marketing strategies and embrace opportunities across all channels – including online and offline. Beacons are fast gaining steam as the newest tool in a retailer’s repertoire for micro location-based messaging and delivering personalized content to customers at the right place and at the right time. Adding on to that beacons can also be used to capture some of the key metrics like visit frequency, repeat visitors, retention and cross-store visits. With these statistics in place, retailers can target millennials in a better way.
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2. Millennials are not fans of calling a rep
The in-store shopping behaviour of this demographic is a little different. Millennials do not choose to ask for a customer service representative’s help in-store. In fact, “34% of them would rather have their teeth cleaned” and “26% would rather go to the DMV.” Unlike boomers, who prefer traditional support channels like phone and in-person support, and generation X, who are more likely to search the web and online FAQs, millennials have grown used to the way technology can reduce the need for human gatekeepers to ensure accuracy.
Image source: followthefrog.com
Key takeaway: Use beacons to provide assistance – Beacons are the perfect tool for modern customer service that is seamlessly integrated with the apps used by millennials. Retailers can use beacons to provide assistance to millennials in the form of relevant product information and more. In fact, Miyagi Baseball Stadium did something on similar lines. They worked with the Media Active Inc. beacon-enabled app to provide assistance to visitors at their seats. With the help of beacons placed at the seats, visitors could use the app to call a salesperson for assistance. The salesperson near the user’s seat area would then receive a push notification along with the user’s seat location.
[Tweet “How Miyagi Baseball Stadium used Beacons to provide assistance to visitors”]
3. Millennials welcome loyalty programs
Many people think that loyalty programs are not effective for millennials, but that is not true! A study by bond loyalty found that 68% of millennials are willing to change where they shop for more rewards points. While millennials are much less likely to be loyal to a brand, 69% are members of retail loyalty programs. Out of these, 70% are happy with their programs. While the preferences of millennials are fast changing, often requiring marketers to strategize in an entirely new way, retailers can still drive return sales by creating a transparent and value-added loyalty program for millennials.
Image source: bellycard.com
Key takeaway: Use beacons to boost loyalty programs – 78% millennials say that they are more likely to purchase from a brand with a loyalty/rewards program than a brand without one. So, retailers need to have a rewarding loyalty program in place, that allows millennials to share their voice and feel connected to the brand value. Customer loyalty programs work best when they are intertwined with everyday preferences and needs of your customers. This is where beacons come into the picture. While beacons are popularly known for delivering contextual content, it also allows marketers to have a deeper understanding of their target audience’s behavior, demographics, location and actions effectively.
[Tweet “78% millennials more likely to purchase from a brand with a loyalty program”]
4. Millennials consider ‘Click-and-Collect’ as an incentive
88% of millennials say they would consider buying a product online and then picking it up in-store to save money on that product. On the other hand, for retailers who ship, offering a discount to pick up in-store proves beneficial in two ways. It creates perceived value about the product and saves shipping plus handling cost. Secondly, it drives traffic to the store.
Image source: nrf.com Key takeaway: Use beacons to improve ‘click-and-collect’ services – It is truly amazing how beacons can help retailers meet the expectations of their customers by improving on services like ‘click-and-collect’. For instance, Supermarket giant Woolworths is using iBeacon technology to improve customer service around click-and-collect with the aim of allowing consumers to place their order online and pick them up in-store. So, when a click-and-collect consumer comes within a certain radius of the store, a notification is sent to Woolworths’ picking systems. This notification prompts the staff to start assembling the order. Certain triggers at different stages of the fulfillment process then prompts a push notification via the app to the consumer, notifying them that their order is ready.
[Tweet “How Woolworths is using Beacons to improve their click-and-collect service”] 5. Millennials prefer mobile payments
Millennials are not fond of carrying cash. According to a survey, nearly 44% of millennials prefer to pay using a mobile device instead of cash, especially for smaller purchases. 91% millennials agree that they are also more likely to use self-checkout because they “don’t like interacting with cashiers”. More than half said they would be comfortable connecting their payment information to a mobile app provided by a retailer or service provider that they buy from frequently. Interestingly, Forrester Research forecasts that mobile payments made by consumers in US will go from $52 billion in 2015 to $142 billion by the end of 2019, powered by the now-ubiquitous smartphone and increasing adoption of mobile payments by millennials. Image source: jwtintelligence.com
Key takeaway: Use beacons for proximity payments – According to the latest proximity mobile payments forecast from eMarketer, the total value of mobile payment transactions in the US will grow up to 210% in 2016. Beacons are among the newest additions that are helping drive sales and digitise consumer payments in the FinTech world. Retailers can easily integrate beacon based payment systems with their own apps or third party apps to create a less cumbersome payment process for millennials. For instance, iMobile3’s cloud based PassMarket platform enables retailers to offer mobile payments, powered by iBeacon technology.
[Tweet “44% of Millennials prefer Mobile Payments instead of Cash”] Retailers can also use beacons to further incentivise millennials who use mobile payments by offering them an option to receive customized email offers on future visits, digital or text coupons to their mobile device, or empower them to automatically earn and redeem loyalty-based rewards for their purchases.
Image source: confectionerynews.com
Millennials believe in building valuable relationships with the brands they buy. They expect retailers to understand their needs, value their time and integrate technology to create seamless experience while offering high-value rebates and authenticity. They are unforgiving when it comes to poor service: nearly one quarter of them would boycott a company after one bad experience. In fact, across generations, 82% of people would stop using a company after the third bad experience.
Retailers have been struggling in connecting with millennials since traditional methods of advertising prove ineffective at capturing their attention. Therefore, they need to use technologies such as iBeacon to create seamless experiences. They certainly cannot ignore this demographic’s big buying power since it is poised to have an impact on retail revenue for six decades or more. Also, millennials are not only transforming their own shopping behaviours but those of other generations as well. Therefore, retailers need to buck up!
If you are planning a beacon pilot, take a look at Beaconstac, that includes everything you need to get started. Using Beaconstac you can set up your own campaign, without a developer’s help!