You are here
NATIONAL REPORT — As millennials make their move into the convenience channel, are convenience store operators ready for the millennial movement?
Recent industry figures reported by Convenience Store News show that millennials currently represent about a third of all convenience store traffic — with many in this generation reportedly possessing a strong interest in the fresh, healthy and transparent.
“Depending on whose definition you use to define millennials, they will represent more than half of the working consumer base within the next few years,” said Dr. Billy McKim, a professor at Texas A&M University in College Station, Texas. “Millennials are on the move and many of them are concerned with being efficient with their time. Obviously, c-stores meet the convenience part, but the question becomes: How do they fill other needs?”
Convenience stores are viewed by McKim as being in a better position than supermarkets to meet the specific needs of millennials while on the go. The idea of going to the grocery store once a week is not as common with this generation as Gen X and baby boomers.
“They want more frequent interaction with retailers and they tend to be influenced by more than price; they tend to have a more defined set of needs,” the professor explained.
In a recent study conducted by McKim and his colleagues Jackie Hill and Dr. Holli Leggette, four notable groups of millennials were discovered in relation to food purchasing behaviors:
Health-Focused Buyers — concerned about the processes used to produce their foods and the effects of consuming particular foods.
Socially Concerned Shoppers — often express concern about the environment and/or animal rights, and emphasize the importance of sustainability.
Thrifty Buyers — concerned with saving money, however, “some people in this group are willing to pay more for foods they consider to be healthy, often organic, as long as the price does not greatly exceed the price of conventionally produced foods,” McKim said.
Particular Shoppers — primarily concerned with appearance, brand, selection, taste and freshness. “Many people in this group value small, intimate shopping environments,” as well as interacting with people who provide in-store demonstrations and information, according to McKim.
From another research vantage point, Brianne Henderson, business development manager at the Midwest Dairy Association — who also happens to be a millennial mom — recently examined the dairy category through the eyes of millennials to better understand how dairy products meet the needs of the growing demographic. According to Henderson’s research, millennials are currently the largest demographic group at 30 percent, holding 17 percent of the purchasing power and this figure is expected to grow to 30 percent by 2020.
Henderson identified the top five millennial trends to be:
- Transparency in food;
- Connected to technology;
- Fresh and local; and
- Health and wellness.
Similarly, on the supplier side, Del Monte identified that millennials not only have $200 billion in annual buying power, but they also now have the highest consumption of fruits and vegetables.
“Growth of fresh produce consumption among millennials have been phenomenal over the past few years. There is a large increase in healthy snack item consumption, and fresh fruits and vegetables are ideally positioned to address their needs,” said Dionysios Christou, vice president of marketing for Del Monte Fresh Produce N.A. Inc.
Christou identifies single-finger bananas and fresh-cut fruit and vegetable lines as attracting a lot of millennial attention, especially with on-the-go packaging features such as non-spill containers, resealable containers, and packaging that fits in cupholders.
Craft brands that are transparent are also part of the millennial mix, and this includes traditionally indulgent items like ice cream. “Millennial consumers are driven by the story behind the brands they support,” stated George Denman, vice president of sales for Graeter’s, a producer of craft ice cream based in Cincinnati. “They have a deep desire to feel as though they are part of a company and the people behind it. And despite a strong interest in fresh and health, they are also interested in finding an ideal balance between health and indulgence.”
Unless the convenience channel is paying attention to these cues and making new moves to specifically attract this generation, “convenience stores run the risk of losing the fresh millennial target to alternate channels,” cautioned Don Stuart, managing partner of Cadent Consulting Group. He points out that leading-edge convenience stores, such as Wawa and Sheetz, have built up a significant healthy presence in foodservice, which they should leverage.
Henderson agrees that Pennsylvania-based Wawa is a millennial magnet with its healthy grab-and-go salads. She similarly praises the “healthy food islands” of La Crosse, Wis.-based Kwik Trip; the variety of beverages, including made-to-order specialty coffee drinks, at QuikTrip in Tulsa, Okla.; and the fresh foodservice meal solutions of Casey’s General Stores in Ankeny, Iowa.
Specifically regarding the dairy side of things, Henderson suggests c-stores attract the millennial generation by providing signage near items that are “local” in the store. “For instance, milk is always local — produced on average 100 miles away, it travels from farm to store in about 48 hours, and is produced 365 days per year,” she told CSNews. “Cheese from a local cheesemaker is another great way to attract this customer who places high value on fresh and local.”
Appealing to millennial affinity for transparency is another strategy c-stores might tackle. Henderson suggests the possibility of using a QR code on the milk case to allow the shopper to: view a family farm and their sustainability and animal care practices; listen to an interview with a dairy farmer; and/or learn information about milk’s journey from the farm to the store.
“We know that millennials are utilizing convenience stores as a quick trip for purchasing staples, like bread and milk. An increase in foodservice offerings could elevate the relevancy to this busy mom or young adult as a one-stop shop for staples, plus meals solutions for the family,” Henderson said. “This means providing fresh food and beverage items for easy consumption such as fresh salads, made-to-order pizzas, grilled cheese sandwiches, protein smoothies, and more.”
Because millennials are also known for blurring dayparts and frequent healthy snacking, she also offers up the opportunity for c-stores to merchandise a “Protein Station,” which could include yogurt and granola parfaits, stick cheeses, chocolate milk, and hardboiled eggs.
Tailored Communications & Technology
When it comes to marketing and merchandising to the millennial generation, the name of the game is “tailored communications,” according to McKim.
“The one-size-fits-all approach does not work with millennials because they are more information-diverse than any generation preceding them,” the professor pointed out.
C-stores can attract millennials by being “authentic and real” in both their marketing efforts and the products they merchandise, according to Maria Bailey, CEO of BSM Media.com and the author of eight books on marketing to moms and millennials.
“When it comes to fresh and healthy millennials, they desire unique flavors served in the freshest manner possible and sourced from socially responsible countries/companies,” she said.
Brands that have a philanthropic and good social commitment also appeal to millennials, both the younger and older of the cohort, according to Bailey. She cites Chobani as a brand that not only has a commitment to sourcing, but also a commitment to its employees (they give free college tuition to the children of their employees). “Chobani has strong loyalties with millennials,” she said.
Regarding retailers in the convenience channel, Bailey agrees with Stuart and Henderson that Wawa is a strong resonator with millennials — but she sees it going beyond the offering.
“I believe their success is the transparency they have in preparing their foods right there in front of the customer,” Bailey told CSNews. “Millennials can customize their foods and order on iPods which play to two things they expect: customization of everything, and the use of technology to place orders.”
Technology definitely comes into play when millennials are making a purchase, according to recent Cadent Consulting shopper research that compared millennials and boomers. The September 2016 study found that millennials are two times more likely than boomers to look for sales online and/or to use apps; they are three times more likely to consult product reviews or go to a brand’s website; and they are four times more likely to engage in other social media when involved in a purchase, including Facebook, Snapchat and Twitter.
Along these lines, Del Monte strongly advises its convenience store partners to promote fresh produce consumption and usage on their social media pages by sharing recipes, tips and videos. “Another popular tactic is to develop a customized mobile app and customer loyalty program,” added Christou.
To market to millennials through social media technology, Bailey makes a few distinctions. She shared that millennial moms will follow a brand/company on Facebook in order to get coupons and exclusive deals. “So for c-stores, Facebook is a good place to list specials and exclusive discounts,” she advised.
For younger millennials, Bailey suggests Snapchat filters. “They communicate with each other via Snapchat, and having a way to be a part of that conversation when they are in the store is a valuable way to create a buzz about your store and the products in it.”
Both older and younger millennials like to discover new flavors, whether the products are fresh and healthy or not, Bailey observed. “This makes it important for c-stores to merchandise new flavors like coconut waters, chips made with coconut oils, seasonal Oreo flavors, and craft beers.”
And Bailey especially wants millennial-minded c-stores to be aware that the generation isn’t fond of carrying cash. “They use cards and online payment apps like Veemo,” she said. “So, having a cash-only c-store is a bad way to attract a millennial.”
Ground zero in attracting millennials is through digital means (including social, mobile, virtual, web, etc.) because that is “where they often engage first,” offered McKim.
“However, I believe millennials are also becoming more aware of targeted advertisements and, therefore, immune to passive appeal. Also, I believe interactive multimedia is becoming an expectation of many millennials. They want to engage with people who are, and brands that are, genuine,” McKim continued.
Many millennials access social media at least once per day, and access digital forms of media —web audio, video, multimedia and on-demand services — at least once per week, he cited. Few millennials consume print media more than occasionally.
McKim’s research further showed that regardless of form (social, print, web or digital), millennials are not decidedly convinced of the credibility of information they find or receive. “Therefore, it is important to form a relationship with them and establish trust,” he said.