Who can crack the millennial and Gen Z code?
Today’s youngest consumer classes demand transparency and freshness from their foods, and they want them to come from companies that share their ethical values.
And that’s just for starters. Millennials and Gen Zers also crave convenience and ease, particularly when it comes to giving them a meal solution for that very day they’re going shopping.
And while the fresh perimeter has a distinct advantage when it comes to luring younger Americans into brick-and-mortar stores, retailers must still work hard to come up with the kind of experiences that will keep them coming back.
Not an easy task. But one that’s crucial to ensuring fresh perimeter viability in the 21st century.
A natural fit for the perimeter
The next generation of consumers is digitally astute, extremely diverse demographically and very interested in and aware of the type of foods they put in their bodies, says Neil Stern, a consultant with Chicago-based McMillan Doolittle.
Millennials — now entering their 30s — have more disposable income and are starting to gravitate towards meal kits and other meal solutions, he says.
Gen Z, on the other hand, is more health-driven — more likely, for instance, to follow a plant-based diet — and more adventureous when it comes to trying foods from around the globe.
When it comes to shopping the fresh grocery perimeter, younger Americans are a natural fit, Stern says. They’re driven more by fresh — they’re more likely, for example, to avoid preservatives and processed foods — and more inclined to use the produce department as a source of center-of-the-plate solutions. Being more health-aware, Stern says, is “simply driven by their upbringing.”
But so much of the shopping done by Millennials and Gen Zers is online. Will they still go to grocery stores?
“Yes, they will still go to grocery stores, though with less frequency than boomers and older generations,” Stern says. “This is the main concern for grocers — making sure they can entice these customers to come more often.”
Younger Americans will continue to do more and more of their shopping online. But Stern believes that the vast majority of the grocery business will still be conducted through physical stores.
Follow the (young) leader
Younger people set the trends older Americans later adopt, says Lauren Scott, chief marketing officer of the Newark, Delaware-based Produce Marketing Association (PMA). One thing marketers can count on: with millennials and Gen Z, “change is going to happen very rapidly.”
The top millennial and Gen Z trend PMA is tracking — one that’s been building major momentum the past two years — is transparency, Scott says.
“People want to know what’s in their food, how it’s grown. Younger Americans are hyper-sensitive to that now.”
That’s good news for “raw materials” like fresh fruits and vegetables, but also for other foods in the fresh perimeter, Scott says. Foods that are labeled “made instore” or “prepared instore” or some variation thereof have a distinct advantage when it comes to attracting millennials and Gen Z.
The two demographics have much in common, Scott says. Both place social justice and corporate responsibility at or near the top of their lists of things they’re looking for in the producers of their foods. But they’re by no means identical, she says. Gen Zers have more of an individualistic and entrepreneurial bend — and marketers of grocery fresh perimeter products would be wise to tap into it.
The most important thing to remember when it comes to marketing grocery perimeter items — or most anything, for that matter — to younger consumers is that they are determined to find easier ways to shop, says Bill Bishop, chief architect and co-founder of Barrington, IL-based Brick Meets Click.
“And their definition of ‘easier’ is not the same” as older generations’ definitions, Bishop says. “They’re happy to leverage their digital skills to look for ways to shop more easily. They don’t necessarily need to go to the store, and in some respects that’s unnerving and scary. ‘Why go out when I can order it and get it delivered this afternoon?’”
The retail grocery world as it’s currently constituted is not ideally suited to bridge this gap between itself and millennials and Gen Z, Bishop says. For one, large sectors of grocery are still dominated by men over the age of 50.
“There’s a fairly significant cultural divide,” he says. “And part of what’s happening is that that divide is creating a lot of confusion on the part of the older segment. They’re perplexed about what the younger set is thinking about.”
The “older segment” should not, Bishop says, assume that younger people will only buy center-store products online, for instance. Amazon launched its Amazon Fresh initiative almost a decade ago. Many people take Amazon Fresh’s struggles as evidence that “fresh foods” and “online” don’t go together. Bishop has a different take.
“The very fact that they’re still working on it, working hard and making progress, tells you that they’re coming” for a sizeable chunk of the perimeter dollar. “There is an answer to how fresh can go online. It’s just not a simple answer.”