Millennials are tough to pin down, but worth the effort, according to a PLMA survey.
Forget about the Baby Boomers. Now, the Millennials are moving front-and-center with the nation’s retailers and they come—all 100 million of them—with much different needs and desires than previous generations.
To help retailers get a better handle on these emerging consumers, a new nationwide study sponsored by the New York-based Private Label Manufacturers Association (PLMA) casts light on the grocery shopping patterns of the Millennials, who are people born between 1980 and 2000. PLMA officials say Millennials represent a multi-trillion dollar marketing opportunity. The report claims that in less than two years, they will become the country’s most powerful consumer bloc and, over time, will become the most economically impactful generation in U.S. history, outspending even the Baby Boomer generation.
The report says that Millennials already account for $1.3 trillion in overall direct annual spending and it is predicted they will buy $60 billion in consumer packaged goods over the next decade.
However, little is known of their shopping mindset and grocery retailers have generally ignored them, favoring Baby Boomers who are generally set in their ways and shopping patterns.
The study finds that Millennials like to describe themselves as unique in their attitudes and how they conduct their lives. While that may well be true in terms of their overwhelming use of smartphones, social networks and the Internet, this wide-ranging study of Millennials who identify themselves as primary grocery shoppers for their household reveals that, when it comes to buying food and non-food necessities, value is the key to their purchasing behavior.
According to the PLMA study, Millennials shop for groceries often and widely, and supermarkets are the most popular choice. Lead factors in what they choose to buy include previous experience with the product, their shopping list and coupons. Seven in 10 belong to a loyalty program. In choosing a store or product, they seek out affordability, value and lowest price. They are also regular purchasers of store brands, think highly of the products and give them high marks versus national brands.
The PLMA study was conducted by Survey lab, an online opinion consultant. It consisted of more than 60 questions aimed at determining what moves Millennials. Completing the survey were nearly 1,600 men and women from 18 to 33 years old who identified themselves as the primary grocery shopper for their household.
Further highlights from the study include:
Millennials overwhelmingly see their generation as different from previous ones and are optimistic about their future. However, many express resignation about their status. Half say their generation is financially less well off than previous ones, and 20% say their life is worse than that of their parents. They expect big changes in the future: Half say stores will look nothing like they do now and a third believe many of today’s national brands will no longer be around.
Brand loyalty is not a major pull for Millennials. When a national brand they wish to buy is not available at the shelf, four in 10 choose the store brand, one third pick a different national brand and one in eight look elsewhere for the national brand they initially wanted.
Millennials are universally familiar with store brands and buy them regularly. Almost four in 10 say they buy store brands frequently, the highest rate offered in the study. Seventy-one percent said value is the main reason they purchase the store brand product as opposed to the national brand. Product quality improvements and a good prior experience will drive their future store brand purchase.
“Millennials have revolutionized the way we communicate,” says Brian Sharoff, PLMA president. “They have created a world of ‘likes’ and ‘friends’ larger than all television audiences combined. But who are they? For those who run supermarkets, drug chains and mass merchandisers, they are still enigmatic. Hopefully, this study will help clarify how they shop and what they want.”