A new poll suggests that while Canadians have a soft spot for small businesses, millennial customers are willing to go the extra mile.
Almost 70 per cent of Canadian millennials, a generation that makes up 35 per cent of the national workforce, are willing to pay more for goods and services if they’re sold by a small or local business, according to the survey by RBC.
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“We found some things underscoring the importance and affinity that Canadians hold for small businesses. You can sense that real affinity and soft spot in Canadians’ hearts for small businesses,” said Jason Storsley, the vice-president of small business at RBC.
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The poll goes on to say that 75 per cent of millennial respondents would additionally support a local business by promoting them on social media. This is 20 points higher than for any other age group.
Storsley thinks these findings demonstrate two undeniable facts about how millennials spend money: they’re looking for authenticity and technology.
“They really do value that connection. They value that social, online, digital connection,” he continued. “While they are digital and they like speed, they still want that authentic rapport with the businesses they deal with.”
That assumption is supported by a wide berth of data. For example, a report issued by the financial firm, Affirm claims that when it comes to spending money, millennials are all about value. Brands whose business models stack up with their own personal convictions are likely to be awarded more points by millennial shoppers.
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“If millennials think a company is coming from a questionable background, they’re more likely to avoid purchasing. For instance, companies who utilize sweatshops are more likely to be rejected by millennials,” read the report.
In addition, a Quartz report from June 2017 reveals that millennials increasingly define luxury products as “sustainable, “organic,” and “ethical” — which in turn has led traditional luxury brands to lose some of their mystique in the eyes of these tech-savvy shoppers.
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“They care about discreet, inconspicuous consumption,” Elizabeth Currid-Halkett writes in her book, The Sum of Small Things: A Theory of the Aspirational Class. “Like eating free-range chicken and heirloom tomatoes, wearing organic cotton shirts and TOMS shoes, and listening to the Serial podcast. They use their purchasing power to hire nannies and housekeepers, to cultivate their children’s growth, and to practice yoga and Pilates.”
However, while Canadian millennials may value the relationship they can develop with their favourite local brands, they aren’t always willing to do so at the expense of technology. The RBC report also reveals that having a variety of payment options matters to millennials, with over 80 per cent of them saying they wished businesses offered tap-to-pay, and 60 per cent saying they wished those businesses had more mobile payment options.
“Owners and operators need to capitalize on this affinity for small businesses by satisfying consumer needs, like offering more payment options and engaging with customers online,” said Storsley.
Beyond making purchases, however, Canadian millennials are also more likely to start their own small businesses. Approximately 74 per cent of millennials responded “yes” to the RBC poll when asked if they’d ever thought of owning their own businesses, which is 11 percentage points higher than the average Canadian adult.
The Royal Bank of Canada poll was conducted by Ipsos Group S.A. from July 13 to July 17, 2017. More than 2,000 Canadians adults from British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec and Atlantic Canada were surveyed through an online panel. Representative sample results are weighted to reflect Canada’s population. The poll uses a credibility interval to determine precision and, in this case, is considered accurate within +2.5 percentage points.