Retailers and consumer packaged goods (CPG) companies must improve their understanding of millennials in Asia or risk missing out on an e-commerce market that is set to skyrocket over the next four years, consultancy Accenture said.
It said in a report yesterday that e-commerce sales in the Asia-Pacific are expected to surge 300 per cent to US$2.6 trillion (S$3.5 trillion) by 2020.
Millennials in Asia will have more spending power than any previous generation, with an estimated US$6 trillion in disposable income by that year, the firm said.
The term "millennials" generally refers to people who reached adulthood about the turn of the century.
Millennials represent more than 45 per cent of the Asia-Pacific's population, and 60 per cent of the world's millennials are expected to live in Asia by 2020.
SIMPLE BUT PERSONAL
To win their loyalty, it is imperative for brands to keep it simple but make it personal using data-driven applications.
MR TEO CORREIA, senior managing director in Accenture's consumer goods and services practice, saying that millennials expect "easy and delightful experiences that are tailored to their interests and lifestyles".
However, it is no easy task to capture the wallets of this segment. Mr Teo Correia, senior managing director in Accenture's consumer goods and services practice, said millennials are "more difficult to predict, increasingly segmented, and devoted to powerful brands and engaging shopping experiences".
"To win their loyalty, it is imperative for brands to keep it simple but make it personal using data-driven applications," he noted.
Millennials are more open to receiving advice than other customer segments, the firm said.
Retailers and CPG companies are trying to meet this generational need through personalisation - but must ensure their methods are acceptable to consumers.
For example, in China and Japan, 60 per cent of millennials surveyed, compared to 47 per cent of consumers overall, are comfortable with giving retailers access to their information in exchange for more personalised experiences.
In stores, 77 per cent of millennials approve of being automatically awarded loyalty points and discounts on items, yet only 37 per cent are interested in sales associates asking about their recent purchases. And 61 per cent want promotions sent to them online for items they are considering.
"We see successful brands ramping up their data and analytics capabilities to enable personalised customer experiences and pricing based on loyalty, purchase history and demographics," Mr Correia said.
Successful retailers use predictive analytics to provide personalised service offerings and take advantage of location-based services to "embed themselves within customer lifestyles", Accenture added.