We all know mobile apps are on the rise, especially in retail where traditional brick-and-mortar store are searching for new ways to compete with online retailers like Amazon. The e-commerce powerhouse was responsible for about 44% of all U.S. online sales in 2017 and about $200 billion of all U.S. retail store sales.
Embracing mobile apps to create a hybrid online/in-store shopping experience can bridge the gap between digital and physical to bring customers back into stores while also increasing brand loyalty. And since certain age groups are more receptive to retail apps, increasing their use is critical to retailers’ top line.
To better understand the digital and in-store shopping habits of young Millennials (18-24) and Baby Boomers (55-64), Aruba, a Hewlett Packard Enterprise company, conducted a global study of more than 350 shoppers. Based on the response, Millennials use retail mobile apps significantly more than Boomers but also are more attracted to brands with loyalty apps and were less cost-conscious than their elder counterparts.
Here are five facts retailers need to know about their millennial and Boomer customers that can help bring these customers back into stores.1. Everyone is loyal, but some are more loyal than others.
Loyalty programs have gained popularity with the rise of smartphones. Having a limitless number of loyalty program apps organized into a single mobile device also makes it easier for shoppers to use them when visiting retail establishments.
Millennials love their loyalty apps, with 66.3% indicating they are more likely to shop from stores where they are part of the loyalty program, vs only 33.3% of Baby Boomers answering the same. For Baby Boomers, price was the biggest driver for a purchase decision, with 40.7% indicating it’s more important than a loyalty program versus only 22.5% of Millennials indicating price as the driving factor.2. It’s all about the in-app features.
What benefits attract consumers to download and use loyalty apps? When asked what incentives would make consumers download a retail mobile app, here is how Millennials differed from the Boomer generation.
|#1 Parking spot locator
|#1 Product availability and comparison
|#2 Product availability and comparison
|#2 Find a sales associate
|#3 Digital payment through retailer mobile app
|#3 Obtain special incentives or coupons
There is a clear distinction between the generations. Baby Boomers treat retail mobile apps as a tool to execute more traditional shopping habits: they still want to find a sales associate and interact with people face-to-face, are more price conscious, and value coupons and incentives more than Millennials. In contrast, Millennials are focused on convenience and speed; they want to find parking and make payments from their phones quickly and easily.3. It’s not if they have it, it’s about how often they use it.
Getting buyers to download a mobile app by drawing them in with a special incentive may result in a high volume of one-time users, but it’s all about how often they use the app. Raising the frequency of use is critical to growing retailers’ top line.
The study found that Millennials used retail apps more frequently than Baby Boomers with 61.8% indicating they use them 1-5 times a week vs 48.2% for Boomers. This spread became more evident when the frequency of use hit double digits. 13.5% of Millennials reported using retail mobile apps more than 10 times a week, while none of the Baby Boomers reported doing the same.4. No sales associate? There’s an app for that.
Younger generations have grown up with portable electronics as part of their daily life. They are accustomed to interacting with electronic kiosks vs live attendants and most actually prefer it.
When asked how they prefer to search for products inside retail stores, more than half (53.9%) prefer using a mobile app vs a sales associate. In contrast, Baby Boomers favored human interaction with less than half (44.4%) opting to use an app to find products.5. To eat out or to eat in, that is the question.
Younger generations are accustomed to eating out more and cooking at home less frequently. The variety of food and cost-efficient options available today make eating out very appealing for Millennials on the go. When asked what kinds of retail mobile apps they use most frequently, Millennials’ top selection was mobile ordering for express food pick-up (55.1% vs 33.3% Boomers). Conversely, the Boomers’ top selection was grocery and convenience store apps (40.7% vs 18% young Millennials) as they tend to eat at home more often.
When going head-to-head with e-commerce retailers, brick and mortar stores need to embrace new technologies, like mobile apps, to stay competitive and attract shoppers. By understanding their customers’ habits and needs, whether they are Millennials or Baby Boomers, retailers can create a personalized and efficient shopping experience that will keep their customers loyal.
Pavel Radda is senior director, market intelligence, Aruba, a Hewlett Packard Enterprise Company.