Millennial consumers prize value - and brands that share their values - but they also want fast, frictionless payment experiences wherever they engage.
Shaped by pressures like inflation and informed by values, millennial consumers buy and spend their own way. This generation may not have yet surpassed older generations’ wealth. However, as the largest consumer segment at approximately 72.26 million, their considerable purchasing power matters. In 2021, a millennial household’s disposable income averaged $84,563 per year, second only to Generation X. Capturing that wallet share can make the difference between a thriving and a struggling business.
Millennial Consumers and Social Commerce
Millennials frequently use social media, but they don’t simply scroll. They use these platforms to provide their family and friends with recommendations of where to shop and what to buy – and they rely on the advice of others. On the other hand, if millennial consumers have a negative experience or discover something about a company that doesn’t align with their values, they’ll boycott that brand and encourage others to do so. In a 2022 survey, 28 percent of millennials reported currently boycotting a product.
But millennial consumers don’t just use social media to share their opinions about brands. They use social media to make purchases. In 2022, 78 percent of millennials (up from 57 percent in 2017) followed brands on social media. In addition, Insider Intelligence reports that 51 percent of millennials purchase directly through social media, the biggest percentage of any generational demographic.
Value Counts, But Values May Matter More
While finding deals and saving money continue to be an important factors, much of how millennials make choices is driven by their values. They deeply care about social justice, politics, mental health, the environment, diversity, and equity, and it influences how they shop and spend. Furthermore, millennials are driven by purpose. They want to solve problems and change the world. Millennial consumers tend to choose brands that support issues they’re concerned about rather than just chase profits - and turn their backs on those who don’t. In fact, HubSpot’s 2022 State of Consumer Trends Report states that 41 percent of millennial consumers would prefer companies to take a stand on social issues. Further, this influences their decisions in all areas of their lives, including purchasing.
How Millennial Consumers Prefer to Shop and Pay
When it comes to customer experiences, millennial consumers demand convenience and minimal friction. They favor digital engagements with brands, with 56 percent primarily using mobile devices. Some of their preferred shopping and payment methods include:
- Buy Now, Pay Later (BNPL): Millennials raising families and furnishing their homes appreciate the option of splitting large purchases into three or four payments and avoiding credit card interest charges. BNPL also provides them with greater transparency than using credit cards, making budgeting easier.
- In-App Shopping: A survey found that 28 percent of millennials purchased a product through an in-app shop during Q2 of 2022 alone.
- Contactless Payments: In 2021, 65 percent of younger millennials owned mobile wallets, such as Apple Pay and Google Pay, a 6 percent increase over 2020. Millennials’ use of contactless payment cards increased as well.
- Omnichannel Shopping: Using various channels to shop – even to complete a single shopping journey - is the new normal across generations and products. However, millennials are the driving force behind many trends. For example, urban millennial men lead buy online pickup in store (BOPIS) use.
The Payment Technology that Makes It All Possible
With millennials preferring to engage with merchants digitally, technology is an important part of systems that provide them with the shopping experiences they prefer. Moreover, the right payments platform is pivotal to capturing millennial consumers’ sales. Transactions need to be fast and frictionless to meet these shoppers’ expectations.
To learn more about optimizing in-store payment experiences for millennials - or shoppers of any generation - contact Ingenico.