Millennials – How, Where And Why They Shop

Millennials, also know as Generation Y, “now control $170 billion in the US alone“¹. They were born between 1981 and 2000 and constitute 79 million shoppers. “By 2017, these consumers will have more spending power than any generation has ever had, but they shop differently, are hyper-social and endlessly curious about what other people are doing“¹.

Industry experts agree, they will completely change the way we shop and interact with brands.

Is your company prepared to life up to their standards?

Millennials are very different from previous generations for various reasons:

  • Ethnically diverse
  • Hyper-connected due to the internet and social media
  • Spoiled with respect to available options

Millennials can choose from more options at every moment than any other generation before. Nevertheless, they also face an above-average employment rate in comparison to the general population which results in highly skeptical and disloyal shoppers. Millennials switch retail stores and consumer goods brands without hesitation if a competitor convinces with a superior value proposition.

So how can you successfully market to this extremely skeptical and disloyal demographic?


General considerations

Millennials, as mentioned in the introduction, are facing an above-average unemployment rate. At the same time, due to recent technological advancement (internet, free software, etc.), millennials create more content, products and services than any other generation before.

This results in an increased do-it-yourself mentality: “One in three millennials are taking a “self-driven” approach to beauty care, for instance, opting for at-home products vs. a trip to the spa or salon. And 38% of millennials say they “self-treat” when possible to avoid costly doctor visits“².

Though limited in financial terms by the macroeconomic situation, they leverage the possibilities of the digital age to create a virtue. Instead of visiting expensive beauty shops and health centers, they pamper themselves at home as millennials “spend more than the average shopper on hair care, sun care, cosmetic products and body scrubbers and massagers“³.

Moreover, millennials are multi-channel shoppers using digital devices to search for information, to compare products and to execute the payment at the local store. Often, they purchase online right away to circumvent traditional stores completely. They are used to having instant access to an infinite number of options and hence, expect permanent availability and accessibility from retailers and FMCG.


Selection of retailer

According to a recent AdAge article, traditional grocery stores remain the top shopping option. But millennials prefer drugstores over convenience stores as the former offers a quick and convenient shopping experience while the latter is perceived to have a limited assortment at higher prices.

Convenience is highly important to millennials and consequently “(g)rocery delivery services, convenience stores, and online retailers are becoming increasingly important food sources“⁴.

Nevertheless, millennials also want to be entertained while shopping. According to AdAge, “fun to shop at” is one of the key attributes for millennials when selecting their retailer of choice.

See our previous post “Entertain Your Shoppers And Let Them Play” for 5 ideas on how to make shopping more fun in order to prepare your retail store for this new generation of shoppers.


Selection of brand

Millennials feel socially responsible and demand a similar commitment from private companies. “Some 83% percent of Millennials will trust a company more if it is socially or environmentally responsible. Almost 9 out of 10 Millennials will switch from one brand to another—price and quality being equal—if the second brand is associated with a good cause“³.

Recent food scandals such as the mouth and claw disease or the bird flew made millennials sensitive to issues related to nutrition. They increasingly value freshness and organic options produced by local manufacturers.

Nevertheless, the top four criteria for selecting a FMCG brand also reflects their limited financial resources. “Item price” is the number one criterion followed by “previous product usage” (risk-averse shopping behavior).

In summary, millennials demand FMCG to be socially committed and to offer sustainable quality products. Nevertheless, due to their financial limitations they are not willing to pay a premium price.



Retailers are increasingly adapting to the needs and lifestyles of millennials. “Some big grocery store chains, like Safeway, are incorporating the needs of millennials into their future business plan by offering store-brand organic products, grocery delivery, and smartphone apps. Even staple brands like Campbell’s are now trying to embrace organic trends“.

So, for those retailers and FMCG companies which want to prepare for this new generation of shoppers, we recommend to keep in mind the following 5 rules:

  • Ensure competitive prices
  • Offer high quality goods (i.e. fresh & organic food)
  • Facilitate convenient shopping (i.e. delivery, electronic payments via smart phone, etc.)
  • Be active on digital platforms and participate in social media communications to engage with your millennial shoppers
  • Introduce or participate in programs which demonstrate your social responsibility (i.e. Wal-Mart’s annual Breast Cancer Awareness)

Keeping in mind these 5 simple rules your company, being it a retailer or a FMCG company, will be prepared for facing this new, highly skeptical and disloyal, shopper generation. The benefits certainly outweigh the costs as companies slowly adapting to change will be driven out of the market faster than ever before.






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