Millennials, one of the most powerful demographic in the retail industry in Singapore, are the first generation to be a part of this digital world. Several experts have advised players in the retail industry to target this customer base in 2018 and beyond.
According to a survey conducted by ComScore, the millennials will have a strong foothold over the world’s economy as their purchasing power is expected to be S$170 billion this year. Young men and women of the ages 18 to 24 are more likely to spend time on online shopping than any other age groups.
Every year, Visa conducts a survey on ‘Consumer Payment Attitude’ to find out the customer’s attitude towards card usage, cash, and online shopping. Based on this year’s results, 52% Singaporeans of all age groups use cards to pay for purchases rather than cash.
Why do millennials in Singapore shop online?
When millennials were asked by KPMG as why they prefer online shopping instead of visiting a shop, the top answers were cost savings and time flexibility. Another reason was to escape negative shopping experiences like traveling from one place to another, being in a crowd, or waiting at the billing counter.
Availability and better selection of products are the other factors that ‘push’ millennials to shop online. Several products are cheaper online than in offline shops and stores. This lets Singaporeans not only compare prices across websites, but also save money. Not only this, the ecommerce industries are continuously trying to decrease the delivery time and improve consumer satisfaction.
Many online stores offer promotions and exclusive deals throughout the year, which may not be the case for offline stores. These websites will also have product reviews that help consumers to gain insights about the performance.
Why do retailers prefer promoting products online?
Retailers favour selling their products online due to the nature of online shopping. These retailers offer discounts on products all year round, resulting in more profits and increase in sales. Julio Hernandez from KPMG said that CEOs in the retail industry are aware of the buying trends and want to offer a positive shopping experience. Since millennials in Singapore compare product prices between different websites, they expect the same level of experience from all the websites.
Tito Costa, the Managing Director of ZALORA, said that the biggest challenge all the online retailers are facing is customer loyalty. Even though ZALORA have a strong presence online, they consider offline channels crucial for building that brand trust.
ZALORA put up voucher codes on billboards at prime locations in Singapore, which could be used to offset only online purchases. This code acted as a tracking tool and helped them monitor the conversion from offline to online during the promotion period.
Why do millennials like to shop online with credit cards?
According to a survey that recently conducted, DBS or POSB is the most popular bank offering credit cards in Singapore followed by OCBC. 52% own DBS/POSB credit cards while 34% have OCBC credit cards. 23% of the respondents do not own any credit cards.
The research pointed out that almost half of the millennials between the ages 18 and 24 years own only 1 credit card and use it for online shopping. The main reason is the rewards that can be earned from purchases.
21% of the millennial respondents said that they use credit cards only for online shopping and charge less than S$500 to their main card. The choice of credit card mainly depends on the amount of cashback, rebates a Singaporean can get on the card itself or if the card offers discounts on items it is being used.
Since millennials have low monthly income, most of them prefer shopping with credit cards as they can either depend on their guarantor to pay the entire amount or they can take time and pay the amount in instalments. Hence, all millennials in Singapore must be very careful while shopping online. One must not cross the credit limit and must clear the dues on time.