Bridging the gap: technology, changing personal and societal interests and evolving eating habits are changing how retailers market their stores to reach multiple generations.
That assortment may be fine for a supermarket located in an up-and-coming loft district or across from a college campus, but it is a deal breaker for a store near the senior citizens complex housing the Silent Generation. And that is where many retailers go wrong. According to industry observers, most supermarkets need to do a much better job of using demographic data to target the customer base patronizing their particular store.
"Today's American household looks very different from 60 years ago," says Charles Vila, vice president, consumer and customer insights, at Campbell Soup Co., based in Camden, N.J. "The American family is a rich mosaic that reflects increasing diversity, new economic realities and powerful social change. We have identified six trends which are shaping households today: Multi-cultural/mixed race households, Single Parent households, Adult Only households, Multi-generational households, LGBT/Same-sex couples and families and the emergence of the Modern Male who plays a more active role at home."
Yet, the planograms that retailers use to map and set their shelves are still largely monolithic, says Bill Bishop, chief architect, at Brick Meets Click, a consulting firm based in Barrington, 111. "They are either across business or by cluster, but very seldom by store. So in an individual store there is a high likelihood that some faster selling items aren't getting enough space, and might not even be in the store. And vice versa, there's some space spread out for items that aren't so popular but happen to be the ones that are around to make the store look good," he says.
"Today there are four generations [Silent Generation, Baby Boomers, Generation X, Millennial] in the aisle, each with their own values, life stages and, consequently, shopping behaviors," says Colin Stewart, senior vice president, at Acosta Sales & Marketing, based in Jacksonville, Fla.
Each generation shops for food a different way, Stewart notes. "While older shoppers are more likely to shop in a supermarket, Millennials shop most often in other outlets, reflecting an emphasis on convenience as well as the rapid growth of alternative channels," he says, including online shopping.
"More than half of Millennials are purchasing grocery items online at least once per month--compared to 31% of Gen Xers, 20% of Baby Boomers and just 15% of Silents--and 44% are expecting to increase online shopping in the next year," Stewart says.
Millennials are the most flexible of shoppers, says Jill Ahearn, senior director of consulting services, at Packaging Technology Integrated Solutions, a division of Havi Global Solutions, a packaging supply chain services company based in Downers Grove, 111. "Millennials are not as brand loyal as their predecessors but are more likely to try new things. They are particularly influenced by social media, by sharing and information that they have. They believe they are better informed."
Taking a look at the tray return counter in a college student union where there are chutes labeled glass bottles, plastic, aluminum, compostable and trash, one can see that Millennials are more concerned about the environment than previous generations, or cohorts, as Ahearn refers to them.
"Millennials also tend to shop more frequently and not do the big weekly stock-up trips, some of which may be for economic reasons," Ahearn says. "They are also more concerned about organic and natural products than other cohorts. So while they will still probably shop at the A&P, they may shop it a little differently."
For Millennials, shopping is all about the experience, says Stewart.
"Making that experience fun, engaging and digitally integrated should be priority number one for operators," he says. "In-store displays, product tastings, educational opportunities like cooking lessons or nutritional consultations and mobile coupons all resonate especially well with Millennial shoppers. Adding local, fresh foods on top of this gives retailers a combination that is hard to beat."
If a retailer offers that combination, word will quickly spread.
"Predictability is kind of the enemy of Millennials," says Leeann Leahy, president, The VIA Agency, an advertising and marketing agency based in Portland, Maine. "Their whole life happens and they share it immediately. It is to their detriment to a degree, but they share it immediately, what they had for lunch, that they broke up with their boyfriend. This is what gives them social currency. If it is not shareable, it is almost like it didn't happen."
Online shopping is just one aspect of technology that is defining how different age groups approach grocery shopping, says Rich Scamehorn, chief research officer at InContext Solutions, a Chicago-based shopper research firm that uses online virtual store simulations to track consumer preferences for brand marketers.
"Millennials in particular have grown up with technology and having it in all phases of their lives, and shopping is no different," Scamehorn says. "They are not only much more willing to use their smartphone when they are in the store but to leverage it to try and change that experience to be one that is on their terms.
That may entail updating the way a store's loyalty card program works.
"Millennials are more likely to want a loyalty program that is electronic, rather than with just a card, whereas an older generation person probably wouldn't be very comfortable with that and would much rather have the card," Scamehorn says.
However, given recent headlines about hackers hijacking personal e-mails, photos and the like, the pendulum may swing the other way, Scamehorn cautions.
"Their willingness to give up their privacy is starting to bite them a little bit more often. It will be interesting to watch if that changes or if that is going to remain one of their big differences from other generations," Scamehorn says. "On the manufacturer and retailer side they need to work at making sure they leverage the freedom they are getting from people and do not overstep their bounds on how they are interacting with that generation."
As Millennials proliferate, traditional supermarkets need to adapt their product assortments and store layouts, observers say.
"The healthier products, global products and the things on the perimeter of the store, the fresh things, are all trends that the Millennials are on the leading edge of, more so than the older groups," Scamehorn says. "The older groups, the Boomers in particular, have always shopped grocery stores and packaged goods in the center of the store and have used a lot of those products consistently throughout their lives. While I think they are also following those trends a little bit, they are not as quickly evolving on them as are the Millennials."
That is why prune juice and other items have to fight to keep their shelf space.
"Before the advertising and the marketing, it really starts with the offering," says Leahy. "Within the grocery channel, the opportunity lies in the introduction of new flavors, and the ability, particularly for younger people, to discover not just brands, but new flavors, cuisines and ethnicities, stuff that you wouldn't necessarily have seen in your neighborhood grocery store 15 years ago."
That might include an in-store sampler wearing a tutu--if the store is sampling Mike's Hard Lemonade.
"Retailers are starting to ask us to not only disrupt the consumer at point-of-purchase but also to engage with that consumer at point-of purchase as well," says Kevin Brady, director of brand commercialization, at Mike's Hard Lemonade Co., based in Chicago. "So we don't use people who have aprons and hairnets on them when we are sampling. We give a fully branded experience."
A Mike's Hard staffer works with the company's sampling agencies to ensure the samplers fit the target demographics. "They are wearing branded gear and can really relate to the consumer that we are targeting. We are doing some EDM electronic music outreach with our Mike's Harder brand. Tutus are really popular with this consumer segment, so some of our sampling staff will wear tutus to reflect what we re doing."
For its part, Campbell's has been tweaking its product line to appeal to the nation's changing demographics.
"Our products are used in more than 94 million homes across America," Vila says. "We offer a range of solutions for Boomers, Millennial and younger consumers, as well as the new households."
For the 63 million Adult Only households, Campbell's Skillet Sauces and Prego Italian White sauces are two highly successful product lines that were created specifically to target that group, Vila says, while Campbell's Chunky targets the Modern Male.
"Modern Males are redefining the role of dads and men in the household and today represent around 70 million men," Vila says. "Campbell's Chunky soup appeals to the Modern Male and has a unique appeal among guys with hearty appetites with pub-inspired soups like Sausage and Pepper Rigatoni and Beer and Cheese with Beef & Bacon," he says.
QUICK AND EASY CANDY
Manufacturers and retailers are working together to improve the shopping experience for all different age groups of customers.
Hershey, for example, teamed with Bi-Lo to create the Hershey's "Candy Experience" at a remodeled Winn-Dixie in Baton Rogue, La., where the traditional inline candy aisle was replaced with a series of kiosks and walk-around--displays merchandised according to occasion, such as Candy Dish, Movie Night, Fruity & Chewy and Grab-N-Go. All are marked with clear signage and contain products from competing brands. The Candy Dish display, for example, contains lay-down bags of Hershey's Kisses as well as M&M'S.
"Shoppers told us that grocery shopping is a chore," says Rick Price, senior manager of center store evolution, at The Hershey Co., based in Hershey, Pa. "They are time-starved when they shop. So the most important attribute they claim they want is convenience. They want to be able to find candy quickly and easily--and it is not even on their list. They might not even go down that aisle because we are all perimeter shopping now."
Price attended the store's grand re-opening in November and was thrilled to see shoppers of all ages happy, smiling and having fun in the department--including Millennial. "It appeals to all age groups," he says. "It is definitely focused on moms because mom is our primary shopper, but what we are learning is that Millennials want an experience. For the most part, today's experience is not cool and hip enough for them, if you will, but they really enjoyed this and we saw a lot of happy smiles."
Smiles are also fashionable at the new Whole Foods flagship store in the Atlanta suburb of Alpharetta, where the chain employed Second Story Atlanta Studio to install four multimedia installations designed to appeal to and tell the Whole Foods story to multi generations of shoppers.
"There is an interesting revolution happening in retail, but it is still kind of the Wild West and chains are struggling with what is the type of experience, content and story that someone really wants when they are shopping, especially at a place like a supermarket," says Joel Krieger, group creative director, at Second Story Atlanta Studio, part of SapientNitro, based in Atlanta.
"How do you create a more delightful experience for the customer, knowing that your customer is everyone from grandparents to moms with kids?" he asks.
Working with Second Story Atlanta Studio, Whole Foods may have found the answer.
"Whole Foods is very different than a lot of clients that we work with," Krieger says. "A lot of brands say they want to innovate--Whole Foods actually does."
The innovation includes Wise Wood, a completely wooden education analogue display that tells the story of Whole Foods' new Responsibly Grown ratings system by having shoppers pull and turn levers.
"Kids love this thing, but it is also designed to be fun for an adult in a Disney movie kind of way," Krieger says. "It is not technologically intimidating so an older person not comfortable with a touch screen is comfortable pulling these levers and seeing these wooden animations happen. Kids play with it and the parent immediately bends down and says, 'see this is how the world could work if we removed pesticides,' and it becomes an unintended way of the parents learning about it themselves."
Over in the store's cafe area, Farm ... Meet Table educates shoppers about the local farmers and manufacturers in a more exciting way than the pictures and little written descriptions found in many supermarket produce aisles. The result is a wooden wall with iron-framed windows. Each window pane features a different manufacturer or farmer and has a live Instagram feed so shoppers can see what life is like on the farm and interact with the farmer by posting pictures of dishes they made using the farmer's ingredients.
"The farmer gets to be more connected to the people and actually see what they are making," Krieger says. "It begins this dialogue between the two that was never possible before."
While Instagram appeals mostly to the younger demographic, Krieger says older folks are interested in it too. "Your foodies take pictures of their food anyway, so that range is bigger," he says. "It may be more natural for a younger person who is already on Instagram to take a picture of what they made and post it, but even older folks can tap the window pane and learn about the farmer."
A Perfect Pairings station in the cheese department allows shoppers to sample cheeses and then use an interactive screen to suggest wine pairings and recipe ideas.
In the HBC department, Whole Body Mirror is a glass mirror with a motion camera and super bright LED screen that shows the aura of shoppers when they walk by.
"Kids walk by and have fun playing with it. Teenagers have fun playing with it. Grandparents and older people like it because it is so simple to use and plays off the basic human premise of curiosity and play," Krieger says.
Disneyesque magic mirrors may bring out the kid in everyone, but Bishop offers a simpler solution to brighten any senior citizen's day--easy-to-read shelf tags.
"Shelf tags should be printed large enough so that people with impaired vision can read them," he says. "I don't think anybody is offended by having the cost per ounce be more legible. That is something that can be done in center store to make it easier for older folks."
Supermarkets might also want to increase their levels of customer service on the days when the senior citizen bus pulls up to the door.
"Beyond focusing on health, serving the Silent Generation requires physically catering to this aging demographic," says Acosta's Stewart. "Using larger fonts on marketing materials and in-store signage, lower shelves, improved lighting and offering magnifiers at the shelf are just a few ways operators can stand out by making the shopping experience that much easier."
When it comes to marketing to Baby Boomers, retailers should stay young at heart. "For Boomer shoppers, health and wellness reign supreme as they focus on 'staying young,' maintaining active lifestyles and managing conditions such as weight, arthritis and diabetes," says Stewart. "Operators who offer a variety of good-for-you foods--namely whole grain and no additive/preservative items--as well as vitamins and medications will not only attract Boomers, but shoppers across all generations as the health and wellness megatrend continues to grow."
Despite their interest in health, Baby Boomers like to live large--as in club pack sizes, says Ahearn of Havi Global Solutions. "Boomers are the largest growing demographic for club stores. They typically go into these stores, buy product and then share it with their children, other relatives and friends," she says. "So club stores are starting to package things this way, so the items can be easily split up once they get home."
Observers say that while younger shoppers are more engaged with digital and mobile technology, do not expect the weekly circular to go away anytime soon because even trendy Millennials use them.
"Weekly circulars continue to influence buying habits of all shoppers, not just senior citizens," says Stewart. "Our research shows that 41% of Boomers and Silents, 34% of Gen Xers and 33% of Millennial decide which brands to buy based on which are on sale in the circular. However, Boomers and Silents are significantly more likely than younger generations to clip coupons from the circulars."
IN ADDITION TO A MULTITUDE OF DIFFERENT ETHNICITIES and religious groups, today's supermarket operator has to cater to four distinct generation groups:
The Silent Generation: People born before and during the Great Depression through World War II. "Silents are brand loyalists who buy what they have bought before, says Colin Stewart, senior vice president at Acosta Sales & Marketing, based in Jacksonville, Fla. "The Silent Generation is the most loyal to branded products, with only 26% buying store brands to save money."
Baby Boomers: Those born in the post World War II "baby boom" from 1946-1964. "Baby Boomers are fairly brand loyal and respond to products and retailers that address the 'What's in it for me?' question," says Stewart.
Generation X: Baby Boomer offspring born from the early 1960s-1980s. "Gen Xers are knowledgeable shoppers who use information to guide their decisions," Stewart says. "Gen Xers spend more on groceries than any other generation; with an average monthly spend of $323.10."
Millennials (Generation Y): Those born in the 1980s to early 2000s and generally coming to age around the turn of the millennium. Millennials are heavily influenced by friends and social/community and shop the store perimeter," Stewart says. "They also spend the least amount on groceries with an average monthly spend of $252.60."
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|Author:||Turcsik, By Richard|
|Article Type:||Cover story|
|Date:||Jan 1, 2015|
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