It’s easy to make the assumption that the reason why Millennials are gravitating to online grocery is because they are accustomed to and favor the ease of e-commerce over shopping in store. Remember, this is the demographic that launched and grew social media by posting pictures of their dinners. But there are other factors at play.
E-commerce has made it possible like never before for niche brands to reach Millennials who favor the authenticity, uniqueness, quality and healthiness that define these products. This is the group that popularized eating clean, and made natural, whole and organic mainstream. It is access to these better quality, healthier products that is driving engagement for this critical consumer demographic online, as much as it is convenience.
However, supermarkets who are focusing solely on e-commerce to engage Millennials are missing half the picture. In addition to their love of authenticity and healthiness, Millennials also love to engage and discover products firsthand; they have a desire for both adventure and discovery, whether epic or everyday. Just look at the recent Pokemon GO phenomenon — a perfect example of a fun experience in the everyday. Creating that everyday adventure in store is what will draw customers in — such as taste testing new bold flavor concepts, demonstrating new regional products, or providing more clean label foods. Even better, product sampling is an excellent way to draw attention to new offerings.
Providing the types of products that Millennials are often drawn to online in actual stores is the first step in garnering an engaging in-store environment. Recent deals amongst large food companies purchasing more naturally or organic companies, such as Danone’s purchase of WhiteWave and General Mills’ acquisition of Annie’s, are born out of the pressure that longtime supermarket standbys face to adapt to changes in consumer eating habits. But in turn they are making it easier on supermarkets to identify some of the top sellers as these large food companies have already identified these regional brands as ones that are moving the needle with Millennials.
By carrying more of these niche products desired by Millennials, supermarkets will not only increase their exposure in an experiential manner to other product categories and drive incremental sales, but lock in this demographic as an in-store shopper for years to come as they enter different stages of their life.
Supermarkets can also draw in Millennials by showing their support for their local and regional companies by promoting brands that are sourced from the local community. Even if it is a just a few brands prominently displayed, it shows a sense of community that is key to many Millennial shoppers.
A recent Rabobank study showed that Millennials are willing to pay for the products they desire, especially if they are organic, local, free-range or artisanal. Bringing Millennials and their $200 billion spending power with them in to stores all starts with carrying the types of unique, quality products that drove them online in the first place.
Millennials now represent the largest segment in the work force, and the supermarkets who best serve and meet the needs of this demographic will establish the much desired relationship with them going forward. In order to compete, the industry needs to bring the in store shopping experience the Millennials crave, along with products that provide the adventure in eating, on level with, or even surpassing, e-commerce because once they get consumers inside stores it will convert to higher margin purchases.