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Changes in Grocery Shopping Patterns Driven by Demo’s and Technology

There’s a dramatic shift underway in the way we buy groceries, driven by the shift in dominance from Baby Boomers to Millenials, and the upsurge in mobile technology.  Implications for the grocery industry: expect even less loyalty to channels and brands than we have today.

Shifting demographics:

Progressive Grocer cites the shift from Baby Boomers to Millennials as a key driver of changes in shopping patterns. 

There will be lots of Millenials.  By 2020, Millennials over the age of 25 will make up 19% of the population (they are only 5% in 2010).  By that time the Baby Boomers will finally fall to below 20%.  

They have money to spend.  Unlike retired Baby Boomers, on fixed incomes, these Millenials will be entering the time of life associated with high spending as careers progress,  households form,  and children are born. 

Millenials are less loyal to channels and brands. 

Millenials: 47% rate brand name “extremely” or “somewhat” important in driving grocery choices, vs. 61% of Boomers.  They may also be more open to trading down to private-label products (require less of a discount to trade down).

Millenials: 41% of total food $ are spent at traditional grocers, vs. 50% for Boomers.

MIllennials spend differently

They are more price sensitive than Boomers, willing to shop for deals,

They are also more willing to pay more for natural/organic foods (58% would pay more, vs. only 43% of Boomers).  

Shifting channel use, increased role for digital media:

We are increasingly fragmented in our channel use, and we are using technology to facilitate our grocery shopping and food decisions.  This doesn’t necessarily mean buying groceries online, that’s still a tiny business (but growing robustly).  It does mean using smart phones and other technology to expand and express our engagement with food.    In just one year, 2011, the penetration of smart phones has skyrocketed, from 27% to 42% (ComScore, 2012 Mobile Future in Focus, February 2012­).  In a recent article The Hartman Group  reviews results of proprietary research on the role of the Internet in driving grocery purchasing patterns.   Some trends they call out:

Online purchasing of CPG  “works”only in some cases.Those most like to be satisfied with buying consumer packaged goods online: dual income, harried households – they pay more for online goods, but the convenience is worth it. 

The weak spots for online buying are opps for bricks & mortar. Fresh foods just don’t work well online, still.  Successfully engaging consumers around perishables will be a differentiator for retailers. 

Social media can be used to engage consumers – and support retailer loyalty.  The Hartmann article cites some great examples, such as Whole Foods, of retailers that are successfully engaging their customers around the food experience, both digitally and in the store.  Building that strong engagement ties their target consumer to the WF brand.    

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2 Responses to Changes in Grocery Shopping Patterns Driven by Demo’s and Technology

  1. Egha says:

    After years of reading this Generational Research, that alsmot seeks to engender conflict, I wonder how carefully the researchers have tried to distinguish between the real differences between generations vs. the differences that we all experinece between various phases in our lives. To claify, I am a Boomer. I was also a 20-something once and I remember entering the workplace with just as much enthusiasm for meaningful project work, and desire for respect as this group has. I was just as ideological as they are, if not more so. I was just as eager to learn as they are, which helped me become computer literate as quickly as my employer brought them into the workplace. It amazes me that we fall for these stories about all the differences, without more critical analysis. If we simply remember how it felt to be young and emphasize with the Gen Ys, how much easier it will be for all of us to work productively together. After all, they need our mentoring if they are going to take up from where we leave off.

  2. Elena says:

    we’ve been expecting for some time, given the bbbluing interest in Big Data in 2012 and the growing amount of data being created by consumers of all ages. a0This year is all about implementing Big Data, and that goes for the enterprise and the consumer

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