The phenomenal success of trading sites such as Flipkart, Amazon and Snapdeal has helped to define India’s millennials as the ‘arbitrage generation’. Millennials spend an average of 17 hours per week online—89% research online before making a purchase, and 40% transact on line. This is helping millennials establish themselves as master negotiators. According to research from PwC, Strategy&, and the FICCI, nearly 60% use the web to find special offers, while Amazon (46%) and Google (43%) dominate their preference for price comparison sites.
Such price comparison sites in India have transformed the consumer from being an informed bargain hunter into “mini stockbroker”. India’s millennials are most informed generation of shoppers in history; and this awareness extends beyond the High Street into formerly so-called ‘proprietary’ sectors such as banking and finance. According to Capgemini nearly 40% of Generation Y-aged investors (aged 25-35) would consider leaving their wealth manager if she did not offer the online services they required. Today’s millennial expects to play an active role in his or her purchasing decisions; and they are making maximum use of the Web to ensure that these decisions are informed. Decision-making is ‘hyper-rational’; based on comparing data from a range of sources covering everything from product features and price, to promotional offers and other benefits. Nearly half (46%) of India’s millennial consumers will spend more with a brand which offers loyalty bonuses.
Such informed ‘decision activism’ is not restricted to purchasing. Fifty percent look for jobs on employment portals and 43% on company’s career webpage; applying the same degree of scrutiny to their job offer and prospects as they do when shopping.
However, GenY’s decision-making is not fuelled only by ‘qualitative’ information such as price, promotion or product features; qualitative information is playing an increasing part. According to Atlantic article trending on youth trends, millennials “embrace brands that embrace them, eight-out-of-10 simply want a brand to entertain them, while seven-in-10 are loyal and keep purchasing brands (they) love. New research from Morgan Stanley confirms their desire to look beyond price and performance when making purchasing decisions.
Today, price/product feature arbitrage is a given and just the starting point for consumers. Brands are increasingly applying a type of sentiment trade off to the entire process. Having the best price on the web is no longer sufficient to secure the deal; today’s consumers also expect brands to have meaning and values. And this “emotional arbitrage” is just as important as the price comparison—even for online purchases.
You May Also Want To Watch:
The incorporation of non-quantified information such as sentiment, opinion, review, and brand perception, into the decision-making process, alongside price/performance data is a very millennial phenomenon. The hyper-personalisation of offerings, programmes that reward loyalty in non-monetary as well as monetary ways, and experiences instead of products are all recognition that customer sentiment is just as shareable as price information; and, now, just as influential. This is the essence of the Arbitrage Generation—their brand of rational decision-making extends way beyond numbers.
-By Bipin Preet Singh Founder, MobiKwik