Who are Millennial Shoppers?
Millennials get a lot of attention from the media and marketers, but so much of it mischaracterizes this generation as being young and frivolous with their time and money. Really we’re talking about an estimated 72 million Americans born between 1980 and 2000 who became the largest generation in American history when they overtook Boomers. They are also the most educated generation in history, have a wide range of incomes, and are the first generation raised in a digital world. Millennial shoppers are a force that’s poised to change many aspects of our culture, and more specifically of our business. No one can afford to ignore how they’re shaping the world.
Millennials Have a Unique Combination of Motivations
Millennials aren’t the first generation to shake up norms, whether that’s in the workplace or in the shopping aisle. What’s different about millennials is that their values and priorities intersect and affect all aspects of their lives. A recent Deloitte survey found that Millennials are concerned—and taking action to improve—health and wellness, mental health, climate change, and inequality. For those of us in the health and wellness space, that means these Millennials customers are bringing all those factors to store aisles (and online shopping carts). For example, over the last two years we’ve seen businesses that integrate mission-driven values into their products and messaging show tremendous growth. A look at data from KeHE and SPINS finds veteran-owned business grew 367% during that time period. Woman-owned businesses grew 72% and minority-owned (BIPOC) grew 71%. Millennial shoppers are committed to patronizing better-for-you businesses and a main reason we see this kind of growth.
Better-for-you also describes how Millennials find and buy products. As the first digital generation, they don’t choose between in-store and online experiences. Their world is omnichannel and they expect retailers and manufacturers to share that point of view. For these consumers, a convenient shopping experience allows them to spend time on something they care about or removes stress from their lives. That is a better-for-you approach to shopping. Looking at dollar sales from December of 2020 through the summer of 2021, we see that internet purchases have remained consistent. These points of sale, which include online shopping as well as click-and-collect, didn’t nosedive when lockdown restrictions eased up. It’s still a small percentage compared to brick-and-mortar sales, but it’s only going to increase in the future.
*Internet includes range of purchases from pure play Ecommerce to Click & Collect; Brick & Mortar outlet sales do not include internet sales.
(Source: IRI All Outlet Panel, Enhanced with SPINS Product Attribution.)
How Millennial Shoppers Are Already Changing Sales
Whether online or in the store, the convergence of millennials’ lifestyle, dietary, and social priorities is evident in retailers today. Items across all aisles have label claims that reflect a wide range of messages covering sustainability, brand mission, mental wellness, and physical fitness. Three trends in particular display the influence that millennials have:
Plant-based: This generation of shoppers grew up with exposure to more plant-based options than previous generations. They were raised expecting to see at least one vegetarian option at social gatherings, in restaurants, and at the grocery store. That lifelong exposure to animal-free meals and the ever-growing number of options created a lower barrier of entry to plant-based eating. That comfort level with plant-based items allows them to seek out brands that align with their concerns about climate change and animal.
For example, the climatarian aims to reduce damage to the climate through better food production and purchasing habits, and that often translates to choosing plant-based options over animal derived ones. Looking at refrigerated plant-based alternatives, millennials spend more than any other generation of shoppers.
Functional Ingredients: For millennials, diet is a key component in overall wellness, which includes getting a better night’s sleep, relieving stress, and staying healthy. Food and beverage brands are increasingly enhancing products with functional ingredients that offer additional benefits, such as coffee with protein or sparkling water with caffeine to stay alert and aid muscle recovery. Of course, shoppers of all ages are looking for food and beverages that taste good and have the right price point, but now they’re asking “What else can this do for me?”
Given the choice between traditional frozen breakfast waffles and frozen, protein-enriched waffles—why wouldn’t they choose the one that offers the extra health benefit? Millennials appear to be on the lookout more than other groups, spending more on functional beverages, such as Celsius, Leilo, and Super Coffee, than any other age group. That mindset is why you’ll continue to see more products incorporating functional ingredients to offer additional benefits.
Pet Owners Become Pet Parents: Pets have always been part of the family, but Millennials took their love and commitment to their dogs and cats to a new level. Whether they refer to themselves as “pet parents”—and many of them do—they are bringing their focus on health and high standards to the pet store. According to one survey, Millennials account for 43% of pet owner growth during the pandemic adoption boom, which translates to a lot of new pet owners and buying power. These pet parents want natural and responsibly sourced food and treats, sustainable packaging, and functional ingredients for their pets. They’re using CBD to calm anxious dogs or treat their cat’s sore joints. For Millennial pet parents, their mindset is the same whether they’re shopping for themselves or their 4-legged friend. They want the next innovative offering that ensure their pets have the healthiest, happiest lives.
What’s Next for the Millennial Shopper
Millennials will continue to shape the shopping landscape for years to come. They are not only the largest generation of shoppers, but they are also still young. The influence we’ve already seen as their interests converge will likely strengthen and even get adopted by Gen Z, which is already making its own waves. Connect with SPINS to spot these trends as they begin to emerge, adapt with Millennial shoppers as they evolve over time, and connect with Gen Z shoppers now to prepare for their rising influence.