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Majority of millennials’ spending is done in-store

August 31, 2013

Many business owners have been focusing on the online side of their marketing approach in recent years, but it seems that younger shoppers may be more attached to brick-and-mortar retail locations than many originally suspected.

Many business owners have been focusing on the online side of their marketing approach in recent years, but it seems that younger shoppers may be more attached to brick-and-mortar retail locations than many originally suspected.

More than 80 percent of the retail spending done by the millennial demographic occurs in brick-and-mortar stores, leaving less than 20 percent of their purchases to be made online, according to the NPD Group. The study also found that more than 50 percent of millennials shop inside a physical retail location at some point during a typical week. 

However, many of these shoppers are failing to purchase products from merchant services providers at the same rates that older generations do. Millennials have the lowest shopping conversion rate of all generations at 57 percent, according to the study. Generation X shoppers reported a conversion rate of 66 percent, while baby boomers were reported at 69 percent, and senior citizens at 72 percent.

“Millennial shoppers are the most elusive generation and the most challenging to keep engaged,” said Marshal Cohen, chief industry analyst at the NPD Group. “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.”

Retailers still shifting their focus to e-commerce
Many retailers are struggling to find the balance between the sales they make and in-store and the sales they make using online credit card processing technology. Abercrombie & Fitch, American Eagle Outfitters and Aeropostale all recently outlined cautious economic outlooks for the remainder of 2013, according to a report from the Street, with retailers blaming a lack of teenage shoppers in brick-and-mortar locations “across the board.”

Despite the way they actually spend their shopping time, roughly 75 percent of shoppers between the ages of 10 and 15 years old expressed a clear preference for shopping online as opposed to in-store, according to a study conducted by the Amaze Generation and cited by The Street. They reported that respondents found online shopping to be more efficient and convenient than traveling to a brick-and-mortar location. 

This savvy, technologically connected age group are clear about what they want – ease of use, convenience and choice,” said Natalie Gross, Amaze CEO, while speaking to the news outlet. “The process of shopping is changing forever and the trends we can observe from the group give us a unique insight into the future of online retail.”

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