Grocery Industry Analysts Examine How Millennial Shopping Habits are Shaping the Industry: Why Retail Stores Can’t Afford to Ignore the Trends
According to Leo Baribeau, it’s in every retailer’s best interest to pay heed to the shopping habits of the younger generation. The grocery industry is quickly changing and grocery stores can’t afford to ignore this vital market segment.
Marketers and business analysts are probably getting a bit tired of all the talk about millennials, or those born between 1980 and 1995. But there’s good reason for the interest: by 2020, millennials will comprise 19 percent of the U.S. population, while baby boomers will drop below 20 percent, according to a report by investment bank Jefferies and business advisor firm AlixPartners.
The report also found that this segment of shoppers buys just 41 percent of their food from traditional grocery markets. Boomers, on the other hand, pick up half of their food from such establishments.
According to Scott Mushkin, Jefferies Director of Food and Drug Retailing, “natural and organic, flavor, and convenience mean a lot” to millennials, and they also tend to prefer shopping around.
But these aren’t the only behaviors that set millennials apart, Leo Baribeau asserts. A consumer report in The Checkout by the Integer Group research firm found that millennials are 52 percent likelier to make impulse buys simply to pamper themselves.
“Impulse purchases are generally only made when something attracts. In the case of produce, this again reinforces how critical it will be for retailers to provide the highest quality possible,” Leo Baribeau explains.
The Internet also plays a major role for millennials. The prevalence of social media usage among millennial shoppers makes it a valuable advertising medium for retailers, Leo Baribeau suggests. A study by marketing agency Weber Shandwick found that millennial moms spend four more hours per week on social networks than the average mom, for a total of 17.4 hours.
But as Leo Baribeau observes, this can be a double-edged sword.
“Social media outlets such as Facebook and Twitter have revolutionized advertising, and I doubt it’s in a way that the ad agencies really wanted,” Leo Baribeau says. “When a consumer has a great, good, mediocre, bad, weird or whatever experience at retail or with a product, all their friends and their friends’ friends are going to find out about it very, very quickly.”
He continues, “Social media can be the retailer’s best friend and greatest promotional tool if they treat consumers to the ever-increasing level of service and quality they expect. If they continue to do things with the worked-in-the-past-so-why-change-it attitude, they’ll fail. It’s like they say: You may have been the greatest dinosaur that ever lived, but you’re still extinct.”
Grocers and food retailers who ignore millennial shopper trends will likely be left in the dust as the industry continues to evolve. It’s imperative for these retailers to take advice from industry experts like Leo Baribeau in order to thrive in the changing environment.
Carly Fiske contributed to this article.