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Millennial shoppers: How are they impacting grocery retail?

Millennial shoppers: How are they impacting the grocery retail landscape?

Millennial purchasing behavior greatly impacts the current retail landscape, and retailers, having realized this, are making Millennials their prime focus. Millennial shoppers are distinctly different from older generations as they are more racially diverse, more educated, and technologically-abled. Most of this demographic group are passing through the initial phase of their respective careers and are single or are starting their own families. Their grocery shopping habits are likely to change with time, but current differences from older generations could have implications for future food demand.

Millennials are price-sensitive but place preference for personalized offerings. However, they are ready to shell out money if the quality of the products is worth the amount. Furthermore, millennials are also fast in acclimatizing themselves to new technologies and are embracing newer grocery options such as online ordering/delivery and meal kits while navigating in-store and digital channels. They are demanding healthier and fresher food, including fruits and vegetables for at home preparations, but place a higher preference for convenience as compared to other generations.

Millennials Purchase More Prepared Foods

Millennial shoppers generally purchase a larger share of prepared foods such as pasta, sugar, and candies than the other generations. Prepared foods such as foods that are ready to heat and eat or just ready to eat such as canned soup, frozen pizza, sandwiches, pasta, salads, and rotisserie chicken. They also devote a part of their share of at home food preparation expenditures to grains, poultry, and red meat. The prepared foods require minimal preparation while grains and meats require cooking.

In comparison to GenX households, Millennials spend the least amount of money on food that requires at-home preparation. However, as income rises, there is a small positive effect on per capita at-home prepared food expenditure. While each preceding, older generation spends more on at-home food preparation than the younger generations and there is a larger gap between the Baby Boomers and Generation X.

Income governs food budgets

Income plays an important role for millennial shoppers. As income rises, expenditure shares for vegetables, fruits, red meats, and sugar increase while shares for poultry decreases as incomes rise. Millennial households generally allocate the lowest amount of their at-home food budgets to red meat and poultry. On average, expenditure for red meats decreases with the younger generation.

This health-conscious and nutritionally-aware generation is extremely mindful of what food they consume and the analysis of at-home grocery expenditure is important. The food purchasing behavior of Millennials not only determines their own dietary quality but also of their offsprings and the future generations. Grocery store shopping behaviors, however, are not permanent and may shift with time and millennial shoppers may find themselves in a position to swap frozen foods to a home-cooked meal in the near future.

Many studies have been focused on looking at how the largest living generation impacts food choices and selections in the grocery aisles. While they are aiming for healthier, fresher foods, they are also looking for more convenience. Trend lines and analysis are important to help fix the right building blocks and retailers to develop strategies and policies addressing the food industry issues.

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millennials sitting on the stairs with a laptop

Millennials: Capturing the largest spending demographic

Millennials: Capturing the largest spending demographic

Being the largest shopper segment, Millennials are currently a prime focus for all the retail businesses. This technology-driven and multichannel-hopping age group are on the threshold of creating pivotal disruptions in all segments. It is extremely critical for retailers to adapt their strategies to meet Millennials' needs. However, in order to do so, retailers must have a deep understanding of every millennial to get a better insight into them as shoppers.

Millennials today give utmost importance to experience over a material item. They seek a destination that allows them to make an outing of an otherwise boring and mundane task.  For instance, instead of going to a typical grocery store, they want a place that can not only provide fresh produce but also trials of different types of salsa or cheese. Wandering the aisles with a snack or a beverage in hand not only increases the time spent in the store but encourages them to add a few extra items in the shopping cart. So retailers must make an effort to transform their stores into the experience.

Personalization is key

Compared to the previous generations, millennial shoppers are far more comfortable sharing their data in order to receive personalized content that would be relevant to their individual needs. This makes it easier for retailers to tailor make product offers and run promotions increasing the likelihood of them making a purchase.
Furthermore, the retailer can also leverage omnichannel marketing to promote ads on social media to redirect the shoppers onto their platforms. 

Curated product offerings 

Retailers must also create curated product offerings that resonate with the needs of the millennial shoppers. Digitally-active millennials communicate, shop and do their tasks online, which creates a volume of valuable data that can be used by the retailers. This becomes increasingly important for brick-and-mortar retailers that compete with e-commerce giants such as Amazon who have endless online 'aisles' for users to shop right from their own homes.
These brick-and-mortar retailers need to leverage the data available and optimize their product offerings to boost store traffic and sales. 

Pricing the right way matters

While making a purchase, price is a key factor, but it is different from that of the previous generations. For example, Millennials are ready to splurge for luxury items such as organic fruits or vegetables or anti-aging creams but maintain a strict budget for other necessities like toothpaste or toothbrushes. If a retailer can leverage this information and price their products accordingly, the possibility of them purchasing products increase.
The best way for retailers to determine the pricing process includes analyzing which products Millennial shoppers are most likely to spend on heavily and which ones that they would not. Using past purchasing trends, retailers can collect the data needed to create a profitable pricing strategy.


Millennials have surpassed the previous generations with the most disposable income. Retailers need to focus on the three most important aspects - their product offerings, pricing and personalization based on a data-driven approach to create a Millennial-centric shopping experience. This would further help them to increase sales as well as loyal, avid shoppers.

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