Millennials and the Emerging Opportunity to Serve

Nov 1, 2018

If you do a search for pictures of millennials, guess what Google brings back? Hundreds of stock images of young people, staring down at their mobile phones. Not photos of attractive young people having fun at a local pub, or listening to music at a concert; not twenty-somethings trying to find a career job or buying their first house. All you get back, in image after image, is people playing with their mobile device.  

When adults are asked to describe millennials, they often come back with a pretty grim picture—self-obsessed, social media-obsessed, technology-obsessed teens and young twenties Americans who care more about their Twitter feed than their jobs. We picture them as ephemeral status seekers, skipping from commitment to commitment with low desire to work hard and high expectations about the world being handed to them.

Baby Boom generation adults say millennials tend to job hop, are less willing to work hard, more likely to expect special treatment and rapid advancement, way ahead of reality. Marketers see them as brand disloyal, and advertising-rejecters, who skip commercials, banner advertising, and don’t read print ads, even as they obsess over their Instagram feeds.

The Real Story on Millennials

The problem is, the data on young adults doesn’t match these findings. Millennials are the most educated generation in our country’s history. They are way more likely to seek advanced degrees, and significantly more likely to get education in science, technology, math, and analytics.

Plus, they are digital natives, able to harness the power of online media to create videos, complex presentations and spreadsheets, and analyze data to make smart decisions.

Despite these advantages, they come into adulthood with more college debt than any previous generation, often starting their lives with 300 percent more debt than their parents.

Career-level jobs are often far less easy to acquire as early in their adulthood as it was with their parents, in some part because older Americans are working longer, retiring later. Millennials may have to wait until their late twenties or early thirties to get on the same kind of career track as their parents and grandparents did in their early twenties. Or they have to create opportunities of their own. Millennials are starting their own businesses at four times the rate of previous generations.

Baby Boomers complain about their young adult children still living at home. But the reality in America is that we have a massive imbalance of housing supply versus demand. The housing meltdown of the 2008-12 era took a generation of new construction off the table. This means they may be less likely to be able to afford a home of their own than any previous generation since the 1930s. 

You can see how young adults might feel under pressure—they have so many advantages in education and information access, yet are blocked at many intersections from joining the adult pursuit of career, debt free independence, and home ownership.

And on top of all this, they are afraid. Very afraid.

"If we know their fears and allay them, they will flock to us. If we understand their concerns and educate them, they will trust us. And if we anticipate their needs and deliver solutions, they will shower us with market share."

For they have grown up in a world where everything is dark and scary, everywhere they look. Global terrorism, global economic crises, school shootings, war. Many of these young people have never known a time when America was not fighting a terrorist power on foreign soil.

And they are afraid about the environment, food, clean water, global climate change. They have grown up in school and in a media environment which constantly shouts, “we are about to lose it all!”

They bring that same fear-based, highly skeptical lens of the great world around them into how they shop, what they eat, and what brands they choose. And as educated and informed as they are—they carry the entire world’s supply of information with them wherever they go on their mobile devices—they feel less confident about their food decisions than any previous generation.

That seems counter intuitive, right? The more information you have, the more confident you should become. Think about buying a car today, versus 10 years ago. You can pre-shop, select options, discover dealer cost and rebates, get consumer ranking and quality reliability scores—all online. Other than a test drive, you never need to visit a showroom to buy a new car. It’s not surprising then that the data shows shoppers are more confident in most retail categories today than they have ever been: travel, auto, communications, banking, technology.

Not so with food. The proliferation in choice in American supermarkets, and the explosion of health and nutrition advice have certainly made shoppers aware. They are informed about sugar and salt content, nutrition value, and so much more. But they are also confused and distressed by all the noise.

For they have grown up being told that the complex farm supply chain is producing food that is bad for them. That the big, organized businesses that create packaged goods are not allies but potential adversaries; and the warm and friendly brands their parents favor might actually be active agents in reducing the health (and increasing the waist lines) of their families.

Media confusion on issues such as GMOs, gluten content, fructose types, sodium, carbonation, and more conspire to tell them that the modern grocery store is filled with temptations which conspire to make them less safe, less healthy.

But it doesn’t stop with the food products themselves—they worry about packaging, recycling, green manufacturing, child labor, and so much more. Their world is filled with information, readily and easily accessible—but which invariably tells them the world is a scary place to both live and eat.

The Opportunity

So, for us as grocers, brands, marketers, the question is, what does this mean? And my answer is—opportunity.

Part of being a great merchant and marketer is understanding the needs of your shoppers. And these new young adults are about to take over the primary core of American grocery shopping as their Baby Boomer parents move into old age. Whether you are sympathetic or skeptical of the emerging generation of young adults, you need to be savvy about what makes them tick. Especially about food.

Whenever shoppers are in distress, it is a massive opportunity for loyalty. If we know their fears and allay them, they will flock to us. If we understand their concerns and educate them, they will trust us. And if we anticipate their needs and deliver solutions, they will shower us with market share.

We can see this happening every day in our stores. Organic produce is growing, almost 9 percent last year—and in some markets even faster. Sales of soft drinks are flat to down, while performance-enhancing, still, and sparkling water and natural teas are up. Alternative milk choices are growing too. From gluten-free pizza crusts to eastern diet staples like hummus and tabbouleh, many stores are seeing shopper preference shifting to alternative products. And most of these products have superior margins to traditional choices.

Younger shoppers are looking for choices that make them feel smart. They want options that de-stress their decisions and reduce their concerns about making a bad decision. If you look at your stores as part of their solution set, then the opportunity for IGA to grow is boundless.

Understanding Our Role

It comes down to simple question: What business are we really in? Are we logisticians? Retailers? Marketers?

Or are we solution providers, educators, partners? Those attributes seem to me exactly the kind of aspirational future I’d want for a high-service independent.

If we are going to understand them, and then help them feel good about the choices they make, we are going to have to change the way we merchandise our stores. It means more POP and educational material in-store and online. It means a library of social media and digital content that tells shoppers why a produce item is great, why professional butchers make a difference, how to reduce calories without sacrificing quality, and where their food comes from is equally important as POP and digital ads that tell what is on sale that week. And it means making smarter choices in our assortments to ensure they have options that fit their concerns.

Don’t just take my word for it. Grab a Millennial and go shopping. (If you don’t have one handy, I have a couple of kids I can lend you!) Walk through your store and ask them to point out the things that are examples of what they want to buy that make them feel like they are eating smart.

Now do the same trip at a competitor. Even average retailers are beginning to embrace this trend, so be prepared for them to like a lot more of what they see in other stores than in our own.

It might be a humbling experience to hear how much more they prefer other formats to ours, but the real lesson here isn’t what other retailers are doing, but how big an opportunity we have to earn new shopper loyalty. That’s what we do best—serve shoppers better than anyone else.

Even millennials.

Hear more of John’s insights on millennials in this video of a recent presentation for the Consumer Goods Forum Sustainable Retail Summit in Lisbon, Portugal.




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