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How to Win Millennials Using E-Commerce

Walmart winning with Millennials ecommerce

Photo by Walmart.

While Millennials will represent one of the most lucrative consumers groups by 2020, winning Millennial loyalty remains a challenge, especially in the competitive e-commerce space where they are mostly likely to be found. According to a study by The Intelligence Group, nearly 50% of surveyed Millennials say they regularly browse online for items that they don’t plan on purchasing. While Millennials are more informed than ever before and browse continuously, they are saddled with high household debt and are more selective about what they purchase.

To understand how to best appeal to this demographic through e-commerce, retailers must look at the insights that will not just help them today, but also decades into the future. Let’s look at a retailer that has established an e-commerce business that is successful with Millennials.

How Walmart Became a Hit With Millennials

As the largest retail chain in the U.S., Walmart uses data and consumer insights to tailor offerings for the Millennial customer. While its e-commerce business does not account for more than 2% of its total sales, the online shopping channel has proven to be successful with Millennials and is another way to build loyalty with this demographic. Here’s how Walmart did it.

1. Understand that Millennials crave a one-stop solution.

1 in 5 mothers today are Millennial. Millennial mothers control 80% of household spending, and are pressed for time when shopping for everyday items, groceries, and baby products. Since Walmart’s e-commerce launch, the company has been expanding the number of products and categories available online. Aside from fresh foods, Walmart has been expanding its offerings in the baby category, which Millennial mothers, who are digital natives, can purchase online alongside everyday items.

These initiatives stem from a clear understanding of the needs of the Millennial customer. With spending on children expected to reach $1 trillion, Walmart is investing in a category that is expected to grow, in a way that is preferred by a growing segment of Millennial shoppers.

2. Don’t just look at general trends—understand the needs of the customer you’re targeting.

As a major player in grocery, Walmart understands that Millennials’ eating habits are changing. Millennials want healthy and organic products, and although Walmart is not in the same category as Whole Foods or niche food markets, the chain is finding ways of delivering on this demand by increasing its supply of organic foods. For Walmart, their main differentiator is their low prices. Walmart uses Wild Oats as its main supplier of organic foods to keep prices low, and promises savings of up to 25% or more when compared to national brands. While most retailers can’t compete with Walmart on price, it’s not the only way to stand out. Depending on the needs of your target customer, you may differentiate based on a unique in-store experience, more curated and personalized offerings, or greater convenience.

Walmart didn’t launch this initiative because they knew there was greater overall consumer demand for organic foods. Wal-Mart made sure there was proven demand for Walmart specific organic foods: in an internal company survey, 91% of Walmart customers said they would consider buying organic foods from the retailer. For Millennials, Walmart’s discounted prices in a category that is usually expensive is a big win because Walmart understands the key consumer drivers for the Millennial consumer, and crafted their strategy around this understanding. Just knowing a trend is not enough: you must know what the trend means for your brand, and use this insight to drive future initiatives.

3. Personalize the online shopping experience according to Millennials’ expectations.

For Millennials, a personalized shopping experience is a must. Walmart has updated its e-commerce platform to give shoppers a more personalized experience, from discovery to purchase. Products and pages are customized according to a customer’s location, purchase and search history, and even the weather. Using sales data gathered in-store and online, product recommendations are displayed to show customers what other people purchased when looking at the same item, but through additional filters of location and weather.

Aside from personalizing products, Walmart has also improved mobile responsiveness on tablets and smartphones, which increased online conversion by 20%. 72% of Millennials research and comparison shop for the best prices before shopping. Knowing this, Walmart has recently started offering Ad Match Guarantee for products sold by online competitors. While this initiative will force Walmart to cut prices on some items, the increase in transparency and value resonates with bargain-hunting Millennial shoppers.

With Amazon setting the benchmark for customized online shopping, Walmart’s e-commerce efforts are delivering a comparable experience through these continued efforts.

4. Speedy fulfillment.

Walmart offers customers the ability to pick-up e-commerce orders from its 4,500 locations across the U.S., with 80 stores also acting as shipping centers for home delivery. Recently, Walmart opened a new e-commerce fulfillment center to help the chain deliver orders to 95% of U.S. consumers within two days, which will allow Walmart to eventually compete with Amazon.

North of the border, Walmart Canada has launched an online grocery service trial in Ottawa that allows customers to pick-up online orders in selected stores for $3, with a minimum order of $50. Staff members can fulfill the order according to the customer’s requests. Like other click-and-collect grocery services, Walmart aims to improve convenience through these services, which appeals to young Millennial families.

Implications for E-Commerce

Walmart’s successful e-commerce platform was built on a foundation of understanding what the Millennial customer wants today and years into the future. The initiative was launched with research, forward-looking insights and an understanding of what the insights mean for the Walmart brand.

It’s important to note that Walmart’s e-commerce execution was consistent with its brand positioning as a convenient and low cost shopping destination. As we’ve seen with other big box retailers that are restructuring to improve operations and customer experience, making sure your branding is consistent across channels is a key principle of any successful omni-channel experience.

To learn more about how we can help your retail business achieve success, visit our retail services page or contact us for further information.