The retail industry has been going through a massive facelift on the lines of Ecommerce Retail Marketplaces. When looking at one side of the market which is the Business itself, you can not undermine the other half completing it, which are the consumers. Make no mistake, we are seeing a major demographic transformation in the target consumer base in the retail market.
There is an inevitable tidal shift in the target base as Millennial shoppers or Generation Y is gradually getting into the zone of the most powerful consumer segment in the market. It is growing toward its peak years replacing the previous generation from the top of the socio-economic pyramid.
Any demographic changeover undoubtedly influences the market. Being a B2C model, the retail business will feel the impact of this change to a greater extent than B2B business models. The millennial shoppers represent a very different mindset than the older generation.
Millennial shoppers and eCommerce retail
Millennial shoppers are tech-savvy and better informed than the last generation. They see things in a different light to the previous age of buyers. It is set to re-orchestrate the rules of the play in the market, especially for the retail business.
We can already see the emergence of e-commerce retail platforms into well-established endearing brands dominating the market. Even traditional retail business has realized the need for change and started investing in technology. Many of them are trying to rebrand themselves to stay relevant in the fray of eCommerce retail business.
It would not be inappropriate to say that the millennial shoppers are revolutionizing the retail sector as a whole. The emphasis on technology has never been more important for the retail business as it is today. Many market analysts assert that only tech-savvy retail businesses will be able to survive the impact of online shopping.
Retail ecommerce growth rate is estimated to be 20.7% in 2019. This is a sign of dominance that the online retail marketplaces will have in the future. Time is ripe for the retail business to make an impending transition to stay relevant in the demographic shift of its consumer base.
Data Source – Unpacking Ecommerce by Organization for Economic Cooperation and Development(OECD)
This is a sign for the retailers that they need to restructure their business if they want to stay relevant amongst the consumers shortly. More importantly, it is the customers who make or break a retail business. You have to align to their point of view and convince them for sales.
Source – Pew Research
The Impact of online shopping on retail business
The millennial shoppers are more open to online shopping than their predecessors. They don’t mind to bend the rules, break the cliches and trying new options. This generation is tech-savvy and actively access the internet for staying updated about the happenings world over.
There is an impact of online shopping on the retail sector which you can not undermine. The scope of online shopping offers an advantage which millennial shoppers are accepting with open arms. You got to keep as many channels open as your business demands to reach out to the target audience. The people nowadays don’t hesitate to use the internet for research and collect information about products prior to purchase.
Let us try to figure out some of the major impact of online shopping on the retail sector as a whole.
Proactive Marketing; Diversified Yet Calculated Outreach
Source – OECD
Considering the majority of the buyers from this group usually intend for a ‘better product at the best price’, it would be a predicament to carve a niche’ to convince such an educated consumer base. Millennial shoppers don’t think twice about a brand name. If they find a product more appealing and feature-rich they don’t care whether it is from a relatively new company or reputed brand.
The eCommerce retail business needs to jump out of the popular old school model. They need to develop a strategy that could compensate for the impact of online shopping on retail. The eCommerce platforms are huge and consist of a wide array of products.
The probability of marketing mis-hit is more in the case of retail platforms as they have an endless range of products. Therefore it is very necessary to develop calculated marketing to millennials keeping up with the market trends.
For instance, the social image sharing platforms would serve well for promoting fashion, clothing, and accessories, but you should not expect a similar response to the household products on the same platform. The retailers need to stay well-researched about the kind of shoppers they can expect from a place and target them accordingly with relevant products.
Interaction – The Social Media Savvy Age
You most probably love to hang out with your friends; We all do. But do you remember how many times you felt fumingly frustrated on one of your friends for keeping his eyes hooked on his mobile? Yup, that’s social media for you.
The younger population is obsessed with technology and social media is its ultimate example. Online retailers should not doubt the potential of social media for interacting with the new generation of shoppers. It is a very pragmatic necessity if you want to neutralize the impact of online shopping on retail business.
Source – OECD
There is something very amiable in social networking. This makes social media a good platform for your business. People can get increasingly influenced by social media platforms. In this new era, just the presence on social media platforms is not enough. It is equally necessary to utilize the social outreach productively so that it could nurture leads into sales.
Source – eMarketer
- 36% of Millennials consider Social Media as their primary source of news. This is much higher than the traditional sources of news such as Television, Websites, Radio, Newspapers.
- 48% of Millennials are constantly available online while 46% go online multiple times in splits.
Consumer Engagement – Participative & Rewarding Retail eCommerce
The brands are being compelled to use online platforms and incorporate participative strategies to engage their targeted consumer base. Participation is a predicament to engage millennial shoppers as this generation loves to interact with the brands. It would even be ready to contribute willingly for the cause of their favourite brands. This helps a great deal in negotiating with the impact of online shopping for any retail business.
Source – Brizfeel Research
- 44% of consumers are ready to overturn their decision to not buy a product if they receive a great deal or offer for the specific purchase.
- Social media influences more than 35% of Millennials during a purchase decision.
When the eCommerce retail companies use rewarding marketing campaigns, the chances of engaging the audience for a fruitful interaction increases remarkably. The only aspect which retailers must consider is that the elementary theme of their engagement program is oriented to the interests of users. One of the most successful participative marketing tools is the ‘word of mouth’ promotion and it is as natural and authentic marketing can get.
- 67% of Millennials have participated in such engagement programs at least once in their life.
- 78% of them prefer to purchase a product from a brand that offers a reward or loyalty program if given a choice.
The Brand Experience – Connection Beyond Sales
Just an interesting engagement is not enough to stay relevant in the retail market. The new age of shoppers looks forward to new trends and updates relating to the product’s range. The way of developing a stronger connection with the products. It is about the sense of pride that you can associate with a brand or in short, the brand experience as a customer. This truly resolves the potential of the future impacts of online shopping on retail business.
One such brand experience campaigns that you may have witnessed comes from Nike. Nike is a popular sportswear and accessories brand that spread the world over. Therefore it’s the majority of consumers buy Nike Products to engage in sports or some other kind of physical activity. This theme is the center of all the marketing and advertising did by Nike for more than one decade now. Nike’s major advertising and marketing were meant to motivate buyers to feel special about an active lifestyle. It pushed them as if they will feel like athletes by using Nike and thus the product can achieve the impossible from them.
Previously Generation X had certain inhibitions when it came to associate themselves with a specific brand name. But the millennials are rather bold and outspoken. They don’t try to hide the fact that they love a brand. They will even be ready to associate themselves with a brand as long as they are satisfied with the product and services offered to them.
Buying Instinct of Millennial Shoppers
Millennial shoppers love spontaneous shopping. They can make decisions with the help of online information accessible through the internet prior to purchase. There are some repercussions of instinct shopping. But at the end of the day, this is how millennials live their life, carefree and open-mindedly.
- There is a 52% Increase in impulse purchases by Millennials than Generation X.
- Only 20% of Millennials consider to cut down expenditure during an economic recession.
- Average time spent online by a Millennial – 25 hours a week online. Smartphones (59%), on tablets (35%) and their laptops (70%).
Stats by – eMarketer
You can’t say their purchases are not planned. It does not mean the millennials are buying all the things they can grab a hold of. This generation of shoppers are better educated. They can use different sources for the evaluation of products. They know what they want in a product before they buy it. So their decision may not look calculated but it is a well-researched one.
Conclusion
The expansion of the e-commerce industry is nothing short of extraordinary. eCommerce Retail is utilizing technology to change how people see retail shopping altogether. The retail marketplaces need to invest and nurture a unique brand experience to develop a long-lasting interaction with consumers. Then they have the responsibility to turn it into a strong relationship that reaps consistent business gains.
If you are denying to accept this change, you are just being an ostrich looking to bury his head sensing danger. E-commerce retail industry is changing the market like never before. You should better realize what you need to do as a retailer sooner before it gets too late.
Do you want to streamline your offline retail business in the eCommerce marketplace? We can offer assistance in making this much-needed transition. You can trust our experience and expertise in creating seamless and fluent marketplace platforms.