Brands and retailers must determine what is likely to win favor among the Millennial generation.
by Mr. Fabrice Carrasco / Managing Director of Kantar Worldpanel Vietnam & Philippines, Asia Strategic Projects Director
Millennials are at the heart of the digital era. The development of technology influences the way they think, live, and behave. Therefore, millennials have developed distinctive perceptions, lifestyles and expectations. These changes have greatly differentiated their shopping behaviors from older generations. This consumer group values innovation and adopts healthy lifestyles early. Thus, they also tend to welcome and prefer new products with natural ingredients and additional nutrients. For example, the number of Millennials buying healthy snacks such as dried fruit is double that of the older generation, according to our study.
Also, with 63 per cent of Vietnamese Millennials saying that they want to see more new products to make their lives easier, this group seeks even greater convenience in every aspect of their lives. Besides that, packaging also plays a more important role in establishing connections with Millennials. It is not only about the look and feel but also the purpose it serves in the overall usage experience. For example, an eye-catching packaging in convenient formats with clear product origin, ingredients, and expiration date can help attract them more so than a purely fanciful design.
How to reach and engage millennials?
The most effective way for brands and retailers to reach Millennials and communicate with them is digital. They spend most of their free time surfing the internet. According to our latest media report, on average they spend more than four hours a day online, which is higher than the total time spent on all other media channels (TV, outdoor, newspaper, magazine, radio and cinema).
Millennials nowadays utilize digital platforms at every stage of their shopping journey to make decisions. They actively use social networks to search for specific products, hunt for deals and promotions, read reviews, and share their opinions after purchasing. As such, they have become a key group driving the development of online shopping. However, with a larger source of information, Millennials are more selective, skeptical towards advertisements and claims by brands, and are less influenced by others, including their friends and relatives.
Being on social media is not enough and, therefore, brands should determine the right channel Millennials spend most time on and at which time of the day to generate the more interactions. In any case, Millennials are able to easily skip ads when browsing online, so practical, authentic, and emotional messaging is more likely to get their attention and drive action to spend. In addition, they go out more for food and drinks, love travelling, watching movies at the cinema, joining social activities, or working out at the gym. These trends are observed in the explosion of not only fast-food, milk tea, and coffee chains, but also other means of leisure activities, such as spas, gyms, and pubs, etc. Thanks to the growing number of outdoor activities, there are many more touchpoints that brands could utilize to reach this target consumer.
Though some say Millennials are the cost-conscious generation, our study surprisingly reveals that they are also willing to pay premium prices for products that strongly associate with their lives and identities. Millennials are at an age when their personal and professional lives are just beginning to mature, which explains their lower purchasing power compared to the older generations. Yet this does not mean they are shopping cheaper. Instead, they are all about shopping smarter. However, different sectors and categories require different pricing strategies in order to maximize their spending. For the premium segment, samples or small pack sizes should be considered to get trials and better convince Millennials to make purchases.
For a Millennial, a good deal is not always the one with the lowest price, but the one that offers the most benefits at a fair price, which implies that brands still have opportunities to invest in the premium segment with affordable prices for Millennial consumers.
In terms of shopping channels, Millennials’ appetite for new things is also reflected in the way they shop. Favoring convenience and relevance, they quickly adopt new shopping formats such as specialty stores, minimarts, and convenience stores, and are online pioneers.
The rate of e-commerce adoption is progressing rapidly in Vietnam, with one in three Millennials shopping for FMCG online in 2018 as compared to one in five on average among all age groups. Their shopping frequency also increases over time, with a bigger basket size (triple the average basket size) promising huge potential for digital shopping platforms. However, this is not meant to completely replace a physical retail presence. Instead, together with technological advancements, the fusion of online and offline shopping will be greater. Indeed, the younger (1990s) group, on average, according to our study, shop for FMCG on over seven types of shopping channels in a year. Mobile devices and apps even allow Millennials to search for real-time product information, promotions, and reviews while making a purchase, whether online or in-store. This also raises many challenges for brands and retailers in developing a channel strategy to be able to meet them anytime, anywhere.
Overall, compared to other generations, Millennials seek new things, new experiences, dare to try, and even have an influence on other generations’ decisions, and as a result offer huge potential to capture. To win both their hearts and minds, brands and retailers will need to uncover and fulfill new aspirations, identify effective touch points, and use personalized experiences to provide a deeper level of engagement. Also, brands and retailers should think about how to take advantage of technological innovations and embed them into their current omni-channel strategy and customer journey in order to ensure a seamless path to purchase for Millennials.
Source: Vneconomictimes