5 things brands need to know about millennial e-commerce

Millennials make up more than half of those who intend to buy online, meaning their sheer purchasing power is directly affecting the way e-commerce and mobile commerce will evolve.

“Millennials have changed the old retail model of price obfuscation, especially in online commerce,” said Jason Goldberg, vp of strategy at Razorfish. “They have grown up with transparency and information available to them at their fingertips, so brands have to design their businesses around transparency.”

Here, then, are five things you need to know about the state of e-commerce among millennials:

Millennials spend the most on online commerce.
Millennials might be poorer than the olds, but that doesn’t stop them from spending more online. Shoppers between the ages of 18 and 34 spend more money online in a given year than any other age group — approximately $2,000 annually — according to a recent report by Business Insider Intelligence.

In fact, their digital spending now rivals that of their IRL shopping. A survey in March by millennial insight firm YPulse revealed that while millennials shopped the most at mass merchandisers, online-only stores came in at a close second with 73 percent of 18-32-year-olds saying they had shopped online in the last 30 days.

Mobile commerce has arrived.
It’s not just a stereotype that young people are glued to their phones: 42 percent of millennials have bought a product on their phones, according to the Global Web Index. That extends to the store, where 56 percent of U.S. millennials surveyed said that their phone is their most valuable shopping tool in-store, according to a study by agency Razorfish from earlier this year: More than half (59 percent) of U.S. millennials use their device to check prices while shopping.

“Brands have to realize that online shopping on their devices is kind of a pastime for millennials,” said MaryLeigh Bliss, trends editor at YPulse. “It is similar to what window shopping may have once been for previous generations.”

Millennials love working the digital marketing system.
Millennials are willing to go to any lengths to scout the best bargains online, according to new research from Mindshare North America. Some ways by which they ensure they get good deals include putting products in online shopping carts and then leaving the site, hoping the brand will send them an offer in the form of an email or ad (47 percent), using fake date of births (26 percent) and using multiple email addresses (36 percent).

“Today’s consumers don’t only know what the brand tells them,” said Goldberg. “They have all the tools necessary to find what they’re looking for.”

But they claim to dislike advertising. 
According to the Razorfish report, three-quarters of millennials still believe that targeting on their phone is an invasion of their privacy. According to a YPulse survey, 63 percent of respondents said that they tended to avoid online ads, and 68 percent said they disliked in-app mobile ads as well.

“Unsolicited advertising is a no-no,” said Megan Hartman, strategy director at millennial insights firm Red Peak. “It needs to happen in an environment where they’re already considering shopping, coupon sites for instance.”

Brick-and-mortar isn’t going anywhere either.
Because technology has been an intrinsic part of their lives along every step, millennials draw no practical distinction between online and offline shopping experiences. They don’t use media in silos, and technology dictates how they interact with and experience brands, even when in traditionally “offline” environments.

“In the future, we see a hybrid of online and offline shopping,” said Bliss. “This is a generation that lives between the two worlds very comfortably — all brands will need to be about both digital and brick-and-mortar experiences.”

This also explains why in recent years, several online-only stores have set up both pop-ups and permanent brick-and-mortar shops. Take Warby Parker, which is in the midst of expanding its offline locations and beauty subscription service Birchbox, which too opened its first retail store last year in New York and is considering more.


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