While Gen X was the first generation to fully embrace computers, it’s the Millennials–the demographic that was raised alongside digital technology–that has captured so much of our society’s attention.
Born between about 1981 and 1997, Millennials currently make up approximately 22% of the U.S. population, and according to the Pew Research Center, have overtaken Baby Boomers as America’s largest generation.
As businesses and marketers consider these statistics, they can’t help but take note of the purchasing power of this Millennial generation––now and in the future; the product development that is occurring because of them; and the marketing that will cater to and be shaped by their expectations. Clearly, our world is changing, and will continue to change based on these trending demographics.
So, what do Millennials mean for small business? For one, mobile payments.
Millennials tend to be the early adopters of technology because they grew up in the digital age. Today’s business strategies have a hard time keeping pace with what Millennials are envisioning. There’s really no limit to how Millennials see the digital world integrating into their everyday experiences, such as how workplaces run or simply driving a car.
In response, workplaces are considering the interactive needs of Millennials, and even car manufacturers are competing to entice younger buyers with high-tech features on their vehicles.
One easy way a small business can attract Millennial consumers and increase their loyalty is through the use of mobile payments and the rewards that can synch up with them.
Many small businesses are wondering whether digital wallets such as Apple Pay, Google’s Android Pay, and Samsung Pay will end up being just a fad, or be embraced to the point of standardization. Data indicates that the trends are strong and moving toward enthusiastic adoption by Millennials.
According to Mobile Payments Today, through 2017 and beyond, Millennials will lead the way to eliminate actual credit cards and eagerly embrace this new era of contactless payments via their mobile devices.
Contactless payments are securely transmitted from a mobile device to an enabled POS device using “near field communication” (NFC) technology. NFC World, a website devoted to NFC payments such as Apple Pay, notes that nine in ten consumers in the U.S. are aware of digital wallets. It also cites recent research indicating that 82 percent of those under 35 have made a mobile payment at some point.
And the trend is just beginning to take off.
It’s likely that mobile payment adoption will grow with Millennials and with the population as a whole. But how can businesses actually attract consumers with mobile payments to close the gap between potential and actual profits? One way is by incorporating a loyalty program into mobile payment acceptance.
Mobile rewards may increase mobile payments.
Simply stated, rewards are an easy way to earn Millennials’ loyalty to your business. But skip the plastic cards. Research from Vantiv and Socratic Technologies shows that one third of Millennials don’t like rewards programs because they end up with too many cards in their wallets.
Enter the digital wallet, and 20 percent of Millennials said they’d gladly join the loyalty program. And there are many creative ways to incorporate mobile loyalty programs. Keep in mind, the rewards that offer convenience and simplicity are particularly enticing to this group. When consumers are eager to use mobile payments, but annoyed by having to carry around a bunch of loyalty cards, logic dictates that a mobile wallet-based rewards program may be the answer.
How to create a successful mobile loyalty program.
There are several ways to create a successful loyalty program that’s mobile-based. Consider your particular business and then target specific benefits to your customers’ preferences, and you’re on the right path.
For example, a restaurant could use a mobile-delivered digital coupon for a frequently purchased item to prompt another visit. The coupon could even be sent to the customer when they are in the vicinity with a message like, “Another chicken burrito with salsa verde is right around the corner! Get $2.00 off today!”
A customer who walks by her local coffee shop and instantly receives a discount on her phone for her favorite cappuccino is more likely to stop by. A sporting goods retailer who sends out a special offer just in time for football season may get more takers. A local florist who sends out a promo one week before Valentine’s Day may see an uptick in sales.
In all these scenarios, customers receive special membership discounts as well as additional points toward future purchases– both great incentives to keep returning to the business.
Additionally, by making it possible to use tap and pay using a smartphone and a digital wallet such as Apple Pay, your Millennial customers may become even more loyal.
Technology continues to rapidly evolve in the world of commerce, and you may not be able to keep tabs on everything. However, mobile payments, particularly digital wallet acceptance, combined with loyalty rewards, is a fairly easy way to attract the Millennial target audience and keep them coming back.