Despite most millennials being digital natives, more than half prefer shopping in physical stores over shopping online. However, according to Adyen’s 2022 Singapore Retail Report, they want these stores to be exciting places to visit (68 percent) and they’d be more loyal to brands who offer them seamless offline and online options (61 percent). What these findings show, is that to capture today’s millennial shopper in Singapore, retailers need to provide seamless online shopping channels and optimise in-store experience to provide a holistic unified commerce experience. But how?
Retail in Asia had the opportunity to interview Priyanka Gargav, Head of Commercial, SEA & Hong Kong, Adyen, together we discussed the shopping habits and preferences of millennials in Singapore.
RiA: What are the key findings on Singaporean millennials’ spending habits and how do they differ from other age groups?
Gargav: Millennials are moving through their prime earning and spending years right now. As the largest adult cohort today, they are arguably the most important consumer group for brands.
The Adyen Singapore Retail Report 2022 points to three key findings of Singaporean millennials:
- Exciting in-store experiences: While digital natives, more than half of the millennials prefer shopping in physical stores over shopping online. They want these stores to be exciting to visit, and are more likely to shop with retailers that use technology to improve the shopping experience.
- Cross-channel flexibilities: Singaporean millennials also want retailers to continue selling on multiple sales channels, even after the pandemic. This generation (68 percent) is most likely to feel this way, compared to the rest of the population.
- Brand loyalty: Millennials are more likely to find loyalty programmes cumbersome, but the majority (69%) would still download a retailer’s app if there are better loyalty rewards to be enjoyed.
RiA: What are millennials’ expectations of shopping experiences and payments? How can retailers adapt to meet millennials’ demands and what kind of tactics should they implement to win over their wallets?
Gargav: The above findings indicate that Singaporean millennials value frictionless, yet exciting shopping experiences – which retailers must address. Technology has proven to be pivotal in creating an in-store experience worth visiting – prime examples are “endless-aisle” shopping, i.e. having kiosks or terminals for shoppers to check if there’s additional stock for home delivery, or even offering new ways to pay through QR codes or mobile payment terminals.
Millennials also want retailers to recognise them as returning shoppers and be rewarded for their loyalty, but in a fuss free manner, without clunky processes. Our research also found that 66 percent of millennial shoppers are more likely to shop with a retailer if their loyalty programme works automatically through their payment card. At the same time, millennials also expect retailers to retain their flexible, cross-channel approach.
Businesses can address these demands with unified commerce. Many retailers today are already delivering omnichannel solutions, but systems behind the scenes are often unconnected. Meanwhile, a unified commerce approach connects all of the retailer’s sales channels, customer relationship management system, inventory, and even its loyalty programmes. In doing so, retailers are able recognise returning shoppers regardless of the channel they shop at, and reward them accordingly.
RiA: How will Singapore’s retail landscape transform over the next few years?
Gargav: Digital transformation is expected to continue to open up a wealth of opportunities. Our research found that 77 percent of businesses expect to grow by 20 percent or more in 2022. Overall, hitting these growth ambitions equates to a SGD 17 billion opportunity and with almost all of those surveyed (97 percent) planning to invest further and grow bigger, that number could be even higher.
A big driver for retail merchants is the ambition to make queues and traditional checkout counters disappear. In the near term, we expect phones to be more widely adopted as replacements for the traditional checkout and traditional kiosks to enable the endless aisle. We also expect to see more cashier-free stores, where cameras and sensors are used to detect and charge customers automatically for the products they are checking out.
RiA: Do millennials prefer to pay with card-based methods or cash? Are they more likely to adapt to the buy now pay later services? Will millennials’ preferred payment methods affect their shopping habits?
Gargav: There’s a strong preference for card-based methods over cash. BNPL services are also rising in popularity – as such retailers must be prepared to provide an array of payment methods such as digital wallets, BNPL to cater to this preference, and thereby reach the audience. This is true not just for domestic retailers, but merchants aiming to expand into the Singapore market.
The preference of card-based payment methods also presents opportunities to make payment cards the key vehicle for loyalty programmes. More than six in ten Singaporean millennial shoppers would be more likely to shop with a retailer if the loyalty programme worked automatically through their payment card.
RiA: How often do millennials make purchases on social media platforms? And how is the behavior compared to that of Gen Z?
Gargav: Nearly three out of ten millennials (28 percent) frequently make purchases on social media or messenger channels. Likewise, Gen Zs turn to social media for purchases as well even more so than millennials by a score of 34 percent. Taken together, social media represents a sales channel growing in popularity among the younger generation and retailers do well by leveraging this channel when the time is ripe.
RiA: Are millennials attracted to subscription services offered by brands? Is there a difference in behavior from millennials across different Asian cities?
Gargav: Four in ten of millennials in Singapore agreed that they would be more loyal to a brand if they offer subscription services. We see the same trend in other Asian cities like Malaysia and Hong Kong.
This spells good news for subscription businesses as there is a healthy demand. In this new world where the customer relationship is king, payments play a big part in two key areas: optimizing the signup processes, and delivering uninterrupted access to customers. If signup is a breeze, potential customers are more likely to subscribe. At the same time, businesses must make sure there are no disruptions for reasons related to payments, technical or otherwise.
RiA: Do you have any tips for retailers on how they can improve the shopping experience for millennials across Asia?
Gargav: Many retailers today offer omnichannel services, but miss out on valuable cross-channel insights if their backend systems aren’t connected. This is a missed opportunity, considering how millennials love the flexibility of purchasing across multiple channels.
A solution for retailers to improve the shopping experience is to streamline their payment data into a single payments platform for a truly connected sales channel. In doing so, it no longer matters whether a customer buys online, in-app, in store, or a combination of all three. Customers will be free to dictate their experience, and retailers will also benefit from a centralized overview of their activities.