Remember the days when reasonably cool youth-oriented businesses used to advertise by giving out flyers or running ads in magazines like 8 Days? I’m pretty sure they aren’t doing that anymore, since I highly doubt anyone legitimately young reads 8 days.
Once upon a time, small businesses made money by setting up shop somewhere in town, prettying up their storefront and then waiting for people to come in. To spread the word, they took out ads, mostly in print, or hired travelling salesmen and flyer distributors.
But that’s not how you make money out of millennials. The internet generation has consumption habits that are distinctly different from that of the previous generation, and businesses need to understand that in order to thrive. See all those empty units in malls-turned-ghost-towns on Orchard Road? Well, the high rents aren’t the only things driving those businesses away. Here are four ways millennials consume differently.
They do a lot of their shopping online
One reason for the downfall of Orchard Road malls is that many millennials’ idea of a shopping spree isn’t rampaging through an air conditioned mall, but checking out a virtual cartful of stuff on websites like Asos, Modcloth and Amazon.
It’s quick, convenient, you get to browse through a lot more stuff within an hour than you would fighting through crowds in malls, and best of all it frees up the rest of your time for cafe hopping or posing for Instagram photos.
Millennials in Singapore spend almost 3.4 hours a day on their mobile phones, and they’re doing everything from browsing online shopping sites and reading the news to playing games with friends and posting on social media using these devices.
Retail businesses need to realise that without online shopping options, they’re going to miss out on a lot of business from millennial customers.
They are eager to participate in the sharing economy
Lots of older Singaporeans refuse to buy vintage or second-hand items, because they’re afraid the ghosts of former owners will follow them back home. Others can’t understand why you would want to buy someone else’s old crap. After all, the whole idea of working hard to earn money is so you can by shiny new stuff, right?
While their parents might have turned up their noses at the thought of buying people’s old stuff online, the sharing economy is alive and well amongst millennials in Singapore, as evidenced by the smashing success of Carousell.
Millennials are used to interacting with others online and savvy enough to ensure they don’t get cheated, well most of the time anyway. Not only are they selling their old stuff and buying other people’s at an unprecedented rate, they’re also totally open to the idea of staying in the home of someone they’ve only ever interacted with on Airbnb or Couchsurfing, or being chauffeured by an Uber driver their own age.
They are suspicious of advertising
As a kid watching TV in the 90s, I remember being completely sucked in by the advertisements hawking everything from Ninja Turtle figurines to the Squiggle Wiggle Writer (endorsed by Edmund Chen, anyone remember that?). It was the fault of adverts that I spent months begging for Puppy Surprise, a hideous candy-coloured, pregnant, stuffed dog.
Unfortunately, that kind of advertising only has its hold on kids who aren’t old enough to use the internet. Because millennials are so used to being bombarded with ads on the internet, they tend to be a lot more suspicious.
Just look at the number of scandals there’ve been regarding “influencers” who are paid by companies to endorse their products, the most recent involving PeelFresh juice. It’s not enough for businesses to just publicise their products and services online by any means possible in order to garner the highest number of eyeballs. They need to demonstrate authenticity, build trust and spread the word in a more organic manner. That takes time.
They are willing to pay for experiences, not just stuff
Once upon a time, the Singaporean dream was to buy a nice condo, a big, shiny car and all the designer handbags a person could wish for.
These days, more and more young Singaporeans are willing to spend not just on material goods, but also on experiences. A recent report shed light on the fact that Singaporean millennials love to travel and prioritise travel spending. A UOB survey earlier this year also revealed that millennials’ spending behaviour is increasingly being shaped by a penchant for travel and dining out.
It’s clear that the Singaporean millennial is no longer going to spend all of his money on Prada leather goods or a BMW. No, he also wants to spend it on numerous overseas holidays, at nice restaurants and bars and fun activities, whether they be paintball sessions or art jam sessions.
Retail businesses who manage to turn their stores into the site of experiences, such as by organising events as yoga apparel store Lululemon Athletica has done, could be on to something.
In what other ways have millennials’ spending habits changed over the years? Tell us in the comments!
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