Riding the Mobile Wave: Leveraging Mobile to Engage Millennial Customers

Written by Dom Morea for Retail Minded. 

Millennials may represent the majority of consumers in the United States, however their budgets are usually the smallest. Even so, a staggering 80 million millennials control approximately $2 trillion in liquid assets – meaning that retailers cannot afford to ignore the demographic when it comes to capturing sales. Many tools exist within the retail payments space to help retailers cater to this audience, but increasingly we are seeing a trend toward mobile-oriented solutions – like mobile payments and digital wallets – that appeal to millennials’ close connection to their mobile devices.

As retailers look for ways to further engage with and attract new millennial customers, they should consider implementing some of the following tactics:

• Enable POS systems to accept mobile payments: Mobile payment tools like Apple Pay, Android Pay and Samsung Pay have enamored millennial consumers, who grew up in a highly digitized world and now expect to be able to use the technology when shopping. Thankfully, point-of-sale (POS) systems with the ability to process these payments – like Clover – are available to retailers that want to appeal to their millennial customer base and keep them engaged with their brand. While older generations of consumers may shy away from mobile payments due to unfamiliarity, millennials thrive on new technologies and new ways of doing things. Transitioning to sleek, high-tech POS systems that can interact with and accept payments from mobile devices creates an opportunity for retailers to connect with their millennial clientele. 

• Tap into the full potential of mobile loyalty programs: Most millennials carry their mobile devices everywhere, frequently using social media to share their locations, interests and consumer preferences. This means that retailers have a strong case for connecting with them on the go. By mining the social media data available to them, retailers are able to target their millennial customers with mobile loyalty programs, such as Perka, that appeal to consumers’ locations and interests. Through these loyalty programs, retailers can offer mobile coupons to prospective millennial customers as a way to draw them into a store and increase the likelihood that they’ll return in the future. According to recent surveys, two out of three millennials would switch brands and change where they shop in order to rack up more loyalty rewards, while 30 percent of 20-40-year-olds are more likely to make purchases due to a loyalty program – meaning that a loyalty program is important to both winning and keeping millennials’ business. 

• Offer mobile gift cards to deepen customers’ digital wallet universe: Fifty-one percent of millennials favor new payment technologies over cash, debit and credit cards versus 33 percent of gen X-ers and 17 percent of baby boomers. To keep up with this trend, retailers should consider offering cash and plastic alternatives by partnering with companies like Gyft – a digital wallet app – to encourage millennials to upload and reload their gift cards and leave the plastic at home. Not incentivized yet? Retailers that don’t offer mobile versions of prepaid cards to consumers effectively leave money on the table: studies show that plastic gift card cardholders spend on average $23 over and above the original value of their cards.

• Create a user-friendly mobile shopping interface: The sales process does not need to end when a customer leaves a store. According to an eMarketer study, 40 percent of millennials have used their mobile devices to make a purchase, while 67 percent and 64 percent have respectively used them to price check items and look for coupons and discounts. For retailers that want to maintain engagement with their millennial customers both inside and outside of their brick-and-mortar locations, they should consider leveraging solutions like Payeezy to create user-friendly mobile interfaces that encourage millennials to find deals, check prices and spend more dollars with their brand. 

For retailers, these mobile solutions and others provide excellent opportunities to tap into the growing millennial consumer audience in the U.S. As the purchasing power of millennials grows in the coming years and decades, it will become vastly more important for retailers to implement mobile technologies – and perhaps others not yet available – in order to grow market share and retain the loyalty of their customers.

Dom Morea is Senior Vice President, Business Development at First Data Corporation where he is responsible for the creation and growth of enterprise-level, strategic and commercial relationships. During his time with First Data, he has led transformational initiatives in mobile commerce and loyalty solutions and headed First Data’s Innovation Labs & User Experience team. He has also led the development of new partnerships and innovative commerce solutions with companies including Bank of America, Citibank, ExxonMobil, Foursquare, Google, mFoundry, Microsoft, Tim Horton’s, Wells Fargo, and others.