According to NPD Group, Millennials have the lowest shopping conversion rate of all generations, but the bulk of their retail dollars is spent in-store rather than online.
Millennials spent 81 percent of their shopping dollars in brick and mortar stores and only 19 percent online. And even though they only convert a little better than half the time, at 57 percent, 53 percent of Millennials shop in stores in a typical week.
"Millennial shoppers have the lowest shopping conversion rate because they are the most selective as well as the most economically challenged," said Marshal Cohen, NPD's chief industry analyst, in a press release.
"Millennial shoppers are the most elusive generation and the most challenging to keep engaged. In order to get more Millennial consumers in store, retailers need to understand how Millennials' shopping habits differ from other generations. Previous generations were more easily impressed by marketing and advertising strategies. With this group you must have a strategy to grab their attention in- and out-of-store," concluded Cohen.
Generally defined as being born between 1980 and 2000, Millennials' low in-store conversion is to be expected considering their current age and earning power. And it makes sense that value-oriented retailers like dollar stores, second hand stores, drug stores, and other off price channels are attracting more Millennials, with dollar stores and second hand stores getting the best conversion.
A recent Times and Trends Report from IRI, Millennial Shoppers: Tapping Into the Next Growth Segment, shows how Millennials have been affected deeply by ongoing economic difficulties, and have adopted an exceptionally conservative — i.e. frugal — approach to daily living. At the same time, they highly value the fun factor of shopping, and will use social media and smartphone apps to search far and wide for deals.
It seems paradoxical for a group also considered the first native digital generation to be doing so little buying online. But according to a report by Accenture, Who are the Millennial shoppers? And what do they really want?, the assumption that it's all about online shopping is Myth #1. Through multiple surveys in multiple countries, the findings revealed that this digital generation of roughly 80 million in the U.S. that spends approximately $600 billion, actually prefers visiting stores to shopping online. Put simply by one Millennial interviewee, "You want to touch it; you want to smell it; you want to pick it up."
Do you see Millennials making a significant shift towards online spending as they age?