Watch out world, Millennials are on the rise!
As a soon-to-be college senior, I have been living away from home for the greater portion of the last three years and in this time I?ve acquired a new set of survival skills. For example, I can now last an entire month (or until I?m out of clean underwear) without doing my laundry; I?m able to function on less than four hours of sleep and I can withstand extreme humidity and heat waves without AC. Although it may seem like I live the stereotypical college student lifestyle, and in many ways I probably do, when it comes to how I grocery shop I seem to fit in with the tendencies of my generation, according to a recent study.
Unlike many college students, my diet doesn?t just consist of macaroni and cheese, Raman noodles and frozen pizza (although I do occasionally eat these). And, believe it or not, my fridge contains more than doggy bags, cold pizza, expired milk and beer. Turns out I?ve discovered some new hobbies in college ? grocery shopping and cooking happen to be two of them.
Typically, I go grocery shopping a couple times a month because I try to eat at home as much as possible since it?s a cheaper and healthier alternative to eating out. I buy my nonperishable and frozen foods at Walmart because it?s close by and cheaper than a traditional grocery store. Most of my perishable items are purchased at a traditional grocery store because I can find fresher produce and higher quality deli goods. I?ve learned that when shopping for perishable foods I need to buy less so that I can make sure I eat it before it goes bad, but in turn I have to shop for these products more frequently (hence the multiple grocery trips in a month).
There was an interesting study done recently that investigated the ways in which Baby Boomers (my parents) grocery shop versus Millennials (people my age). The study, entitled ?Trouble in Aisle 5,? done by global investment bank, Jeffries, and business advisory firm, AlixPartners, surveyed 2,000 adult grocery shoppers to explore these generational differences.
Of the 2,000 surveyed, 1,000 were grocery shoppers over age 18, another 500 were strictly Millennials aged 18 to 31 and the remaining 500 were Baby Boomers aged 48 to 66. According to the US Census Bureau?s recent projections, by 2020 Millennials over 25 will make up 19 percent of our country?s population. That?s up from just five percent in 2010! Also by 2020, the median income for these 64 million Millennials is projected to increase to more than $45,000 with their ?at-home food spending? jumping to $50 billion annually.
Meanwhile, the Baby Boomers are expected to make up less than 20 percent of the population over the next eight years. Much of this generation will be migrating from their peak earning years to retirement, resulting in more focus on life preservation. It?s estimated that their ?at-home food spending? could drop as much as $15 billion annually by 2020 ? conceivably due to the fact that their family sizes are shrinking as their kids grow up and move out on their own.
The study also discovered that Millennials are all about convenience, while Boomers are a lot more brand loyal; 61 percent of Boomers surveyed that brand matters to them when shopping, compared to only 47 percent of Millennials. The Millennial convenience factor is justified because the study also found they tend to use several different shopping methods, including online and delivery services, and often shop at multiple retail channels when purchasing everyday essentials. I know this is partially true for me; I like to buy cosmetics and toiletries at stores like Walmart or Target, but tend to purchase food elsewhere. However, I personally only shop online for items such as clothing or electronics, not food.
Price was another factor that Millennials indicated was extremely important to them when shopping. As a poor college kid, I can definitely relate here as well. However, the study found that as my generation ages (and assumingly our incomes increase) price starts to matter less but quality, healthy and natural or organic increases in importance. Private labels are viewed so highly by Millennials that we require a smaller discount to purchase such products than Boomers would. So perhaps as Generation-Y ages they will develop more brand loyalty like their parents/grandparents have?
Despite the shifting market power and differing shopping habits, Boomers and Millennials do share some similar values when shopping. ?Fresh and healthy? are important and appealing to both generations when it comes to grocery shopping. Boomers, many of whom are retired or nearing that stage of their lives, view their food choices as a means of promoting good health and increasing longevity. And even though my generation of young adults? total spending on food at grocery stores is just 41 percent, 80 percent of us shop these stores for fresh products. Again, this is definitely true for me.
Due to these generational shifts in shopping habits and spending, food companies are under a lot of pressure to deliver more for less. There?s great demand for fresher, higher quality product with a desire for more choices and convenience. In order to combat these demands, analysts say food companies need ?more innovative product development, leaner supply chains and more effective use of marketing techniques.? They also remind companies that unlike Boomers, Millennials are not yet ?locked in? to their shopping habits.
If you?re a member of the Baby Boomer or Millennial generations, does this study match up with how you shop?
Make sure to watch for CBD?s upcoming video on our YouTube channel where we?ll interview Boomers and Millennials to compare and contrast the grocery shopping habits of the two segments.
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Source: http://www.blog.cbdmarketing.com/2012/08/watch-out-world-millennials-are-on-the-rise/
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