Millennials have extremely high buying power in the U.S. economy — close to $600 billion in annual spending. Independent grocers need to understand millennials’ shopping habits and use this knowledge to attract more millennials to their stores.
In a recent NGA webinar “On the List & in the Cart: The truth behind millennials and how they grocery shop,” two presenters from Santy explained where, when, and how millennials grocery shop. Santy used data from a self-administered survey of 550 respondents, conducted in November of 2014. This is what they found.
How they shop:
- The List
Millennials are big on making lists before grocery shopping. 48% always make a list, 50% occasionally do, and only 2% never make a list. Over half of millennials make their grocery list only an hour before shopping, but nonetheless, they do plan ahead. 49% buy ALL of the items on the list and 49% buy MOST of the items on the list. Thus, if a brand want to ensure that millennials will buy their products, they have to become “list-worthy.” For example, “Lays potato chips” rather than “chips” on millennials’ grocery lists.
- Low Prices
When it comes to switching brands, millennials are loyal to one factor: price. 85% of millennials will change brands based on price and 56% will gladly switch brands to save money off coupons. Thus, independent grocers should be advertising “lowest prices around” if they want to attract millennials.
- Store Brands
An interesting fact for private label brands is that 96% of millennials buy store brands. 60% of millennial grocery shoppers believe that “store brands or other private label products” are just as good as other brands.
The average number of items bought per trip ranges from 10-19 items for 36% of millennials and 20+ items for 57% of millennials. In lieu of impulse buys, 65.6% say only 1-4 items are impulse buys, yet the findings show a large gap between number of items on the list and reported impulse buys. The gap implies that millennials include a single item like “salad” on their list but do not consider salad toppings or dressing as impulse buys.
- Loyalty Cards
Millennials are frequent users of grocery loyalty cards with 67% reporting use, but 43% say they use multiple cards at multiple stores. It appears that millennials use loyalty cards to get the best prices and value out of their shopping experience, not to be loyal to one particular store.
Where they shop:
- Prefer convenience
Findings show that millennials are not loyal to the type of store format they will visit. When asked where they buy groceries, 91% of millennials said at grocery chains (ex: Costco, Walmart), 60% at superstores, 11% at convenience stores, and 9% other (Trader Joe’s, Whole Foods). Responses were not exclusive of other options, but the Santy webinar presenters pointed out the growing percentage of millennials who buy groceries at convenience stores.
- Online shopping
Another locational influence to consider is the rise of online shopping. Millennials have been shaped by technology and, thus, are the generation most likely to buy their groceries online. As a grocer, it’s important to consider providing online shopping services to make your store stand out with millennials.
When they shop:
- Every day of the week
Millennials grocery shop all days of the week, not just on weekends. 34% reported grocery shopping between Monday and Wednesday, 18% on Thursday or Friday, and 48% on Saturday or Sunday.
- Short trips
An important quality to millennials’ shopping habits is the short duration of their grocery trips. 71% say they grocery shop for an hour or less, which is little time for in-store marketing to effect millennials’ decisions. Grocers have to find ways to maximize such short windows of time.
- Life stages
Data revealed some clear differences within the millennial group based on life stages. Ads and coupons — both print and digital — influenced married respondents more so than single respondents. Thus, independent grocers might be wise to target married couples with their advertising and coupons. Findings showed that married millennials repeatedly buy more fruits and veggies, whereas single millennials repeatedly buy more protein bars. There were also notable differences found between millennials in college and millennials working full-time when it came to grocery shopping habits. Clearly life stages impact the way millennials shop.
The survey showed that millennials in general — but especially millennial parents — are highly affected by videos. 68% of millennial moms purchase products featured in videos they watch and 42% of millennial dads make a special trip to buy products featured in videos. Of all men surveyed, 69% watch branded food content on YouTube. Thus, independent grocers should utilize videos as a medium for advertising and marketing if they want to target millennials.
What independent grocers should be doing:
Advertising low prices, convenience, and private label/ store brands are three strategies grocers can use to attract millennials. Offering loyalty cards and online shopping opportunities are also excellent avenues. Utilizing video advertising is proven to influence millennial parents’ purchasing decisions. Coupons in print and online are good ways to bring in married millennials. Other opportunities would be running promotions between Mondays and Wednesdays, when 34% of millennials are grocery shopping, rather than weekend-only promos.
Millennials make up over 24% of the current U.S population, which is three times the size of Generation X. The millennial population carries immense buying power in the grocery industry. Independent grocers need to recognize millennials’ grocery shopping habits and use this knowledge to their advantage.
You can download the entire presentation from Santy, here.