The purchasing power of millennials cannot be denied: the most tech savvy, diverse and connected generation we’ve ever known, they spend more on online commerce
[1] than any other customer demographic.
And now we know even more about how merchants can better reach these shoppers: new global consumer research from PayPal and Ipsos identifies several cross-border buying patterns that millennials surveyed have common, no matter the distance between them. The findings illuminate the online shopping preferences and habits of 18-34 year-olds in 29 countries around the world and reveal fascinating, valuable takeaways that businesses can put into practice. For more information on the research and insights, you can find the report
here.
We spoke directly with merchants who’ve found success selling to millennials cross-border –- and who also happen to be millennials themselves — to learn more about how they have appealed to these trends and what they have learned along the way.
Knowing more about these global shopping trends can help more merchants understand and access those who are driving the global ecommerce revolution.
Millennials are bold shoppers
Intrepid at heart, millennials demonstrate a comfort when shopping beyond their home country. Nearly half of millennials surveyed (48 percent) say that they’re generally comfortable buying from an online store in another country and 47 percent of the millennials surveyed have purchased cross-border in the past year. For the cross-border shoppers surveyed, 47 percent have purchased in a foreign currency and 41 percent have bought from a website that wasn’t in their own language.
Not only do millennials shop cross-border, they perceive fewer barriers to shopping in new markets. One of the best ways to reach these millennial consumers is via mobile, as 20 percent of millennials surveyed have made cross-border purchases on their smartphone in the last year.
Jeff Baker of
Earhoox, which makes earbud adaptors, is a millennial entrepreneur who sees this play out in his own business. “We’re seeing about 30-40% of visitors coming to us on mobile,” he said. “That’s where the world is heading, to mobile.” After shipping products to buyers in 84 countries, he sees the benefits of being able to service an age group that’s constantly making new ventures online.
Offer discounts and free shipping to attract spend-savvy customers
Cost-savviness is another element of global millennial identity. Of millennials surveyed from around the world, 64 percent don’t mind where an item is from so long as the total price is good, and 63 percent of millennials surveyed will check currency conversion rates before they purchase.
Millennial cost awareness holds true when it comes to attitudes around shipping, too. Faster delivery (40 percent of millennials surveyed), and free shipping (51 percent of millennials surveyed) are reported as two factors that would make them more likely to buy from a website in another country.
Alexander Mimran, 33, founded and launched
Penzu, a free online diary and personal journal focused on privacy. He recognizes that being digital natives and understanding how to shop efficiently sets this generation apart from others. “The younger audiences understand our product more easily and naturally,” he said. “They like free stuff.”
Having access to product information, reviews, and price comparisons, millennials are adept at finding ways to save money. Across the world, 46 percent of millennials surveyed reported using freight forwarding as a way of navigating international shipping and customs fees. Forty-nine percent of millennials surveyed report that a safe way to pay would make them more likely to buy from a website in another country. And 36 percent surveyed communicated that coupons, promotions and discounts would make them more likely to buy cross-border.
When shopping cross-border, 41 percent of the millennials surveyed reported that they choose their payment preference based upon security and 38 percent indicated convenience (38 percent). Daniel Rensing, 30, founder of
The Smart Baker, an online kitchen wares business (as seen on ABC’s Shark Tank), sees PayPal’s international brand recognition as an important piece of his business. “Being a millennial, PayPal and online shopping were very familiar to us, and in the tech age, very comfortable for us,” he said. “It’s has brand recognition and security. It was a no brainer.”
Authenticity is a priority
To capture more cross-border shoppers across cultures and locations, it’s important to consider how product authenticity is valuable to millennials. Nearly 40 percent of millennials surveyed selected proof of product authenticity as a factor making them more likely to buy from a website in another country. Verifying product authenticity to new and loyal buyers could improve your sales.
Jeff Malkoon, 29, founder of the artisanal nut butter purveyor
PB Americano, notices another reason why people in overseas markets support his business. “People in China are gobbling up nut butter,” he said. “They are willing to pay higher prices for US products because we have more rigorous food standards. There is no FDA in China, so they buy from the US.”
Our survey responses suggest that millennials are looking to buy cross-border and there are several characteristics common in their buying behavior. Showing a comfort when it comes to purchasing in foreign currencies and languages, they are sensitive to costs. To attract new shoppers, try optimizing your website so it’s consistent across devices, offer promotions, and include free shipping.
Millennials are an economic force to be reckoned with, and have the power to push the global ecommerce world forward. As a leading global payments processor, PayPal helps businesses both domestically and abroad access news sales opportunities in the ever-expanding global marketplace. We understand that the millennial shopper is a key part of this effort.
We are big believers in research-backed business decisions, and these global consumer insights are just the latest in the wide range of free resources (from data on
millennials and credit, to sales tools like
PayPal PassPort) that we provide merchants to help them navigate -- and succeed in -- the world of digital commerce.
[1] http://www.pfsweb.com/blog/current-trends-among-millennials-and-online-shopping/