Over 90% of Millennials regard Payment Security as the most important factor when buying online
Lock&Research: Millennial Ecommerce Survey Report
At Lock&Stock, we like to look ahead. And nothing spells future more than e-commerce. While brick and mortar is still the dominant form of retail, both globally and here in the UAE, the number of online transactions is rising at an unprecedented scale as millennials from Abu Dhabi to Fujairah come of age and enter the workforce. Combine this with the fact that the UAE has the highest smartphone penetration in the world, and the UAE (and the wider gulf region) is set to experience an e-commerce explosion. Just ask Amazon.
Our results were eye opening, and dismantled some widely held beliefs about the younger generation, and their online spending habits.
But first off, the opportunity. Over 50% of respondents stated that they spent over 6 hours online per day, and about 35% claimed to spend between 4 to 6 hours. The scale of those numbers are not to be scoffed at, as it means that 85% of millennials in this country spend 16% of their day or more (even higher if time spent asleep is accounted for) active on the internet. They’ve all got smartphones, and they’re spending a lot of time on them.
So how does your business push online sales?
Online Payment Security is the most important factor when buying online for over 90% of millennials.
Consumer trust in payment security has always been a key challenge for companies conducting business online. While this was conventional wisdom among older generations, it is quite revealing that the same holds true for young millennials as well. Lock&Research discovered that over 90% of students in the UAE regard payment security as the most important factor when they are shopping online. Among millennials who do not make purchases online, a little over 47% stated that security concerns were either the main or had some part in the reason they stayed away from e-commerce. Don’t just implement high grade software to make transactions safer, but actively communicate this message to your e-shoppers.
It is rather concerning that a significant segment of the youth is still doubtful about online payment security, especially since it is expected the that this demographic will be the catalyst for ecommerce growth in the region. From an industry point of view, more effort must be made by companies conducting business online need to educate millennials on the safeguards in place to prevent activities like data theft and information leakage. Banks and other financial institutions must also play their part in this process. As they say, a rising tide lifts all boats.
Analysis Paralysis: 13% of young millennials don’t make online purchase because they cannot find what they are looking for
Champions of online shopping usually cite the vast variety of products available online. In theory this means anyone who wants to shop online should be able to find whatever they want with ease. However, our results reveal that among students who do not shop online, 52% stated that not being able to find what they were looking for played some role in them staying away. When all students are taken into consideration, this number equates to about 13%.
We asked young millennials which online retailer they visit the most often, and unsurprisingly most students named Souq.com as their top pick. The real competition began for who would be placed second. While among males surveyed, our research revealed no clear preference for second string, and it seems likely that young millennial males tend to shop directly from brand websites and/or mobile applications. Namshi dominated among women and those above 18, while Noon was the clear winner among those under 18.
A visible gender gap appeared when we asked students what they shopped for. Among males, the overwhelming response was electronics, appliances, and other gadgets, whereas among females the standout winner was (no surprises here) fashion and fashion related accessories. Funnily enough, Amazon’s original product, books, received negligible responses.
For young millennials, Quality trumps Price when shopping online
Ask anyone familiar with Middle Eastern ecommerce, and they’ll tell you the primary reason consumers shop online is to get good deals and discounts. This prevailing thought process has led many businesses to treat ecommerce as their primary means to liquidate stocks or target bargain hunters.
We asked respondents to rate, on a scale of 1 to 5, how important price and quality were to them. And the results were startling. While 68% of respondents handed price a 5-star importance rating, the result for quality was 92%. All young millennials surveyed gave the quality factor either 4 or 5 stars.
As our earlier results indicated, the most popular category among males and females is electronics and clothing, respectively. Both categories place a heavy reliance on quality of good shipped (a reputation that has been somewhat tarnished, for obvious reasons). Businesses aiming to sell online should focus on building relationships based on trust and loyalty toward their brands and their brand offerings, instead of simply pushing discount after discount.
Lock&Research surveyed 563 respondents for this report, aged between 12 and 24. All figures in the above charts have been rounded to the nearest whole number.
