Derek O’Carroll, CEO of Brightpearl, looks at why brands must work harder than ever before to attract buyers and to encourage repeat purchases, particularly from the younger demographic.
We now exist in a world where technological innovation is empowering customers to expect more from the brands they deal with, to switch when they’re not happy or satisfied, and share their negative experiences online.
Results from a recent study show that millennials can be particularly hard to please. Over two-fifths (45%) admit to being less loyal to brands when compared to a year ago, and are quicker to abandon companies that don’t meet expectations.
Customers today have a lot of choice and an array of products to choose from, and so it’s understandable that many brands are struggling to get customers to stick around for the long haul. An enormous 76 percent of customers report that it’s now easier than ever to take their business elsewhere whilst a quarter of millennials would change where they buy goods, based on the shopping experience. Millennials are also the group most unlikely to return to a brand if they have a bad shopping experience.
Shaping buying journeys for the millennial audience
Brands must work harder to attract buyers and to encourage repeat purchases, particularly from the younger demographic. The question is: ‘are millennials worth the effort?’
The answer is undoubtedly ‘yes’. Millennials – typically aged between 23-38 – are now all grown up. Millennials’ purchasing power also continues to grow – they now make more online purchases than Generation X or baby boomers and so an argument can now be made that brands should ensure the happiness of these shoppers as a priority over every other demographic.
The key to retail success really could lie in keeping millennials happy. While it’s perhaps no surprise that online fashion purchases are dominated by younger shoppers, every sector, from home and DIY, to electricals, health and beauty or grocery has a significant and growing audience of millennial buyers – with a set of behaviors, needs, and expectations that are very different to other demographics. If brands want to capture the attention and long-term business of the younger shopper, the way to foster and maintain loyalty needs to change.
Familiarity is a thing of the past
One way to actively build brand loyalty is through superior customer experience. Shoppers will no longer stick with a company that they know but delivers sub-par service. Just because they’ve purchased from a brand for several years doesn’t inspire the same shopper affinity it may have in the past – particularly with younger age groups.
This should give retailers and brands serious food for thought – especially given that over three-fifths (61%) of consumers have encountered issues when buying goods online in the last 12 months, and can be vocal and unforgiving about poor purchasing experiences. In addition, eight out of 10 millennials will never buy anything without first reading a review, which means brands are setting themselves up to alienate or lose customers if they’re not able to own the entire end-to-end experience to an appropriately high level.
Great customer experience at every touchpoint, from discovery to delivery and beyond – including outstanding user experiences, same-next day delivery options, real-time shipping and customer-focused returns models – will be key to winning or losing customers – particularly millennials who are the most sensitive to issues at any stage of the buying journey.
This means brands need to identify and fix gaps in the buying journey that could negatively affect a customer’s experience – and damage brand loyalty. Long-term, this will be crucial to boosting repeat sales, especially for fickler customers in the younger age segments.
The good news? There are systems that can help brands make the buying journey as smooth and effortless as possible. Key to this is an automated back-office platform that adds speed and efficiency into the retail operation and allows for enhanced customer service at every touchpoint. Brands should also use systems that record customer and product data from one single hub, in real time. These insights can identify pain points and guide the changes that will help them to create more tailored and seamless experiences that are in-line with the expectations of younger shoppers.
Brands should also look to focus on the gaps that most frustrate millennials, such as issues related to deliveries and returns. This is the area where things are really going wrong, and this ‘last impression’ can do the most damage to a customer’s brand perception. However, it’s worth noting that 10% of millennial shoppers are willing to pay more for products and services – if they’re guaranteed a seamless transaction. So, brands that do get the end-to-end experience right may benefit not only from increased sales and loyalty – but also from increased wallet capture.
Finally, and to paraphrase Mark Larson, KPMG, Baby Boomers are now appreciating the experience and convenience of buying online, so, to a degree, there is a little millennial in each of us. By focusing on superior experiences now, brands can meet the pressing needs of their most demanding customers (Millennials) but get ahead of the growing expectations of older demographics – meaning they can keep all shoppers coming back to them time and again.