Food retailers ignore Millennials at your peril
Millennials are certainly a demographic grouping that secures its fair share of discussion in the retail industry as this 18 to 34-year-old age group has long been seen as attractive – based on their disposable income levels and the potential for merchants to grab them as future long-term loyal customers.
Despite recognising their value, it seems that the supermarkets have been failing to make themselves sufficiently attractive to the Millennials. According to research from consultants Bridgethorne they are barely satisfied with the supermarket shopping experience or the products they purchased. The conclusion it draws is that the major grocers remain wedded to concentrating on appealing to the family shopper.
The research found that only 29% of Millennials are satisfied with the supermarket experience compared with 49% of over-55s. And 31% of this grouping is satisfied with the supermarket experience versus 58% for the over-55s.
There is an argument that the large supermarkets and hypermarkets have been largely designed for families to engage in their big weekly or monthly shopping trips and in doing so the grocers have failed to give the Millennials the sort of experience they require. This family focus has also impacted on pack sizes at these large stores and on the types of products stocked.
But as the appeal of these bigger outlets wanes and the supermarkets are placing more of a focus on smaller urban stores it is inconceivable that the major grocers have been entirely failing to give the Millennials what they want. But these small units still account for only a minimal percentage of total group sales of the supermarkets and so the research is bound to be biased towards shopping trips made to the bigger outlets.
The research highlights simply yet another challenge that all the big grocers face today. We know their large stores are falling out of favour with all groups – and so it seems none more so than the Millennials. This is unfortunate as this group are certainly in a stronger financial position than the Generation X crowd in the 35 to 50-year-old bracket that are stretched at the moment. The Millennials are also spending more on premium and specialist artisan foods, which is where the juicier margins reside for retailers.
Addressing the needs of this grouping is clearly important and so if the research is to be believed then the major supermarkets need to start focusing more on the Millennial grouping if they are to avoid losing the life-time custom of the future shopper.
Glynn Davis, editor, Retail Insider
K3 Retail deliver multi-channel solutions that enable retailers to create joined up shopping experiences for their customers whether they choose to buy on-line, direct, in-store or via mobile. It has over 20 years’ experience delivering award winning solutions, to more than 175 internationally recognised retail brands.