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Grocery Retail Marketing 101: A Primer on Gen X, Millennials and Gen Z

Most of us can’t get very far into our days without hearing another outrageous story proclaiming “Did you hear what Millennials have done now?!” (The latest: the Tide Pod Challenge).

Now, while we don’t typically hear many news stories about Boomers consuming laundry detergent on a dare, it’s safe to say that it probably does happen, but it’s not uploaded to social media and broadcast as widely. And before you go lamenting the downfall of “kids these days,” keep in mind that life in the attention economy makes the world’s Generation Xers, Millennials, and Generation Zers unique: most of them have lived their entire lives in the blue glare of their digital devices (and to a lesser though still significant degree, their televisions and gaming consoles, too). Indeed, technology has fundamentally changed pretty much every aspect of these younger consumers’ lives—including the ways they approach browsing for, researching, comparing and locating the products and services they most value, as well as how they actually go about purchasing those items.

Taken together, Gen Xers, Millennials, and Gen Zers make up over 65 percent of the population of the U.S. alone, and with their combined earning power and potential, these young and savvy consumers are set to make the biggest impact on the global economy in the coming months and years. And yet, many retailers are still lagging behind in developing strategies to market to this lucrative audience. This could be because many retail leaders—especially in North America—are still trying to get their heads around the differences between the different generations.

Having trouble separating your Xs from your Ys and Zs?

After cross-referencing the multitude of data and information on Gen X, Millennials, and Gen Z, we’ve come up with this handy primer, to help grocery eCommerce retailers build smart customer-centric strategies that really speak to each audience’s unique qualities. In so doing, we hope to focus attention on the similarities and differences between the consumer groups, but also, to underline this important fact: Regardless of age, locale, or other differentiating factors, every shopper is looking for a customer experience that caters to their own wants and needs. And because retailers now have far greater access to data and information about their consumers, the onus is on them to deliver more engaging and relevant customer-brand interactions across every touchpoint in the buyer’s day.

 [Note: While some generational periods are based on specific historical events (e.g., Baby Boomers, who are said to be the result of spiking birth rates post–World War II), more recent generations’ cut-off dates are a bit more arbitrary. We’ve chosen the most commonly used cut-off dates for each cohort, but don’t be surprised if you see slightly different cut-off dates noted by various sources online and in print.]


Generation X – born between 1965 and 1980

a.k.a. Gen X, MTV Generation, the Latchkey Generation, Post-Boomers, Baby Busters, New Lost Generation, the Sandwich Generation

[Image Credit: Creative Spot]

Some of their key characteristics:

  • Independent, self-reliant innovators
  • (Sometimes) skeptical of authority and willing to buck the system if they think they have a better approach
  • Well-educated, high-advancement focused with high buying potential
  • Technologically adept and adaptable
  • Value work-life balance, and tend to work to live (vs. live to work)
  • Brand-loyal and less influenced by trends or fads than younger generations

Picture it: “When Gen Xers were teenagers, their parents bought the first home computers and marveled as kids learned to program in BASIC. Carbon paper was out; joysticks were in. Gen Xers were the first gamers, the first kids to be weaned on cable TV, the first members of the MTV generation.”

Some of today’s most influential technology companies were conceived of by Gen Xers, like Elon Musk (Tesla), Jeff Bezos (Amazon), and Larry Page and Sergey Brin (Google). The tech-savvy members of this cohort may have cut their teeth on early Apple computers and Atari gaming devices, but they’re equally at home with the more modern tools and platforms, especially if they save them time and money. That’s part of the reason that we find that Generation X consumers are the most active online shoppers, averaging nearly 19 transactions per online shopper per year.

Because of this demographics’ age range, many Gen Xers find themselves in the role of caregiver for their aging parents as well as children or young adults, either living in their homes or in separate facilities. Statistics from Pew Research reflect this trend wherein as of 2013, nearly half of adults in their 40s and 50s had a parent aged 65 or older and were either raising a young child or financially supporting a grown child (age 18 or older).

For this reason, Generation X is also called the “Sandwich Generation,” and this betwixt and between position adds certain pressures that later generations have yet to negotiate (including providing financial support for a broader group of family members), while transforming them into major influencers of both the younger and older generations around them.

Luckily for marketers, then, that Gen Xers have more spending power than any other generation, with 29 percent of estimated net worth dollars and 31 percent total income dollars. So along with that influence comes the potential for pay-off for smart brands who know how to tap into this well-educated, technologically adept, and generally brand-loyal audience. And because they’re typically go-getters, they conduct thorough research before they hit the checkout, both off- and online. Just be sure to appeal to Gen Xers using the right screen for the right purpose: They know how to use social media with ease (with a high percentage regularly using Facebook and Snapchat), but they engage with their online personas less for selfies- and more to keep track of the world—and reach their Millennial kids (on Snapchat). And they prefer laptops to shop for products across all segments, although smartphones are gaining traction in some categories, like CPG and Consumer Electronics.

5 Tips for Marketing to Gen X

  1. Offer as much information as possible (think: providing a clear explanation of your products and services, the features and benefits, and why Gen Xers should choose your brand over your competitors, incorporating a Quick View function into your eCommerce site for quick and easy researching)
  2. Optimize your digital visibility (think: SEO, social media and paid search advertising campaigns)
  3. Choose your marketing channels wisely (think: targeting ads for the most relevant channels and making the most of the features and capabilities of each screen to get your best branding message across)
  4. Tap into the communication tools they used as they came of age (think: email—yes, email! They’re comfortable with it, because they’ve been doing it since it started, back with those AOL CDs in the early ʼ90s)
  5. Nurture the relationship over time (think: lifecycle campaigns that establish and build customer loyalty at different times and benchmarks throughout the consumer’s life, including age- and lifestyle-appropriate messages sent to acknowledge birthdays, anniversaries and other major milestones).

 


Millennials – born between 1981 and 1995

a.k.a. Generation Y, Gen Y, Generation Me, the Green Generation, Echo Boomers, the Net Generation, the Boomerang Generation, Trophy Kids

[Image Credit: Madden Media]

Some key characteristics:

  • Self-expressive, community-driven global citizens who value the voice of the individual;
  • Tech-savvy experience-seekers who demand connectivity, convenience and options that allow them to be in control;
  • Independence-seekers who value entrepreneurship;
  • Better educated than their parents’ generation, but at a cost—also the generation with the greatest debt accumulation;
  • Prioritize developing a better work-life balance over climbing the corporate ladder;
  • Inquisitive and knowledgeable about the companies they choose to buy from;
  • Frugal shoppers, but will pay more for sustainable options that also offer additional benefits (e.g., better quality or healthier ingredients).

Much maligned for their purported self-entitled attitudes towards work and play, Millennials get a pretty tough rap in most societies these days. But really, with reports suggesting that their generation is likely going to face the worst income inequality of any generation in recent memory, and fuelled by endless opportunities for self-promotion and self-reflection on social media… can we blame them for trying to standing out as the “Generation Me” in the workplace and in popular media?

In reality, we can look to several major socio-economic factors that likely contributed to Millennials’ preference for experiencing rather than accumulating: the events of September 11, 2001 and two economic recessions (first in 2000, and then, a Great one in 2008). And while Millennials’ propensity to shop for experiences has hurt some retail categories (e.g., fashion and apparel; housewares) , it could actually work in favour of grocery retailers who commit to making their omnichannel marketing more aspirational and meaningful on a personal level, to hit home with this demographic that values work-life balance and wants to drink in all that life has to offer.

With Millennials, it’s important to keep in mind that they witnessed the introduction and rise of social media, tablets, smartphones, and other digital technology that makes our always-on, always-connected world go ʼround. This generation spans nearly 20 years, which means that its older members are accustomed to using a combination of face-to-face communications and messaging technology, while younger members use mainly electronic and digital platforms for their day-to-day activities, including switching between up to three screens at a time. And because older Millennials will still remember a time before eCommerce, this makes them entirely comfortable with shopping across all channels available to them, including in-store, online, as well as newer shopping models, like “click and collect.” This is similar to the “digital native” Gen Z cohort, but many Millennials see shopping online as a means to save time, and do so with greater frequency than their Gen Z counterparts, who prefer online for the breadth of products available. Combine this finding with their financial concerns, and it makes sense that Millennials would be resourceful when it comes to getting the best price for the right product: In a study of Millennials in the U.S. between the ages of 18 and 34, more than two-thirds of respondents said that promotional emails affected their purchases. Meanwhile, a reported 67 percent of Millennials surveyed by Ernst & Young said that they would go to a website to get a coupon (vs. 46 percent of Gen Zers, who don’t mind spending a bit more for items they want).

Millennials gravitate towards social networking sites like Facebook, to create a different sense of belonging, make acquaintances, and to remain connected with friends. Researchers have also found a particularly strong segment of highly-engaged, highly-loyal YouTube users, called the “Die Hards,” who skew towards the Millennial demographic, and will routinely binge-watch content on digital video channels, with one in eight Millennials claiming that YouTube is their preferred destination for watching current season TV shows.

5 tips for Marketing to Millennials

  1. Facilitate a fast and easy shopping experience that saves them time and money, regardless of the channel (think: streamlined online checkout with Single-Sign-On (SSO) or auto-fill fields)
  2. Emphasize social awareness and responsibility, connecting your messaging with the causes that matter most to consumers, while also focusing on quality and price (think: combining a claim with a marketing sustainability approach, which has proven to drive sales in food products like baby food, coffee, tea, and snacks)
  3. Help Millennials to feel like they’re a part of a community (think: catering to your consumers’ unique wants and needs with a loyalty program that targets particular audience segments with a variety of value-laden offers)
  4. Diversify your eCommerce channel marketing, using each platform to promote a different facet of your brand message (think: Facebook Groups for community-building; YouTube for engaging, binge-worthy content, like how-to or DIY product videos that integrate a brand message)
  5. Be mindful of your pricing strategies to attract more cost-conscious Millennial shoppers (think: promoting quality and value for the money; offering multiplier discounts, such as BOGO or 3-for-1)

 


Generation Z – born between 1996 and 2005

a.k.a., Gen Z, Post-Millennials, the iGeneration, Founders, Plurals, the Homeland Generation

[Image Credit: PeopleGuru]

Some key characteristics:

  • Mature and self-reliant “digital natives” who have never experienced life without digital technology;
  • Pragmatic and realistic;
  • Entrepreneurial go-getters with a conscience;
  • Adept researchers who use digital tools to learn, work, and collaborate;
  • Looking for authenticity and engagement (“real life” vs. “perfect life”) and willing to pay for it.

Generation Z as a group makes up a huge proportion of the world’s population, and individually, they’re also strong purchasing influencers—contributing about $44 billion to the U.S. economy. And though they’re not necessarily putting all of their money into the global economy just yet, members of Gen Z are definitely the ones to watch as an indicator of shopper preferences and spending behavior in the near future.

This generation is savvy about money, and earn an average weekly allowance that spans well past earlier generations. At the same time, they’re careful about how they spend their dollars; they do their research and are willing to go to greater lengths to locate the products they want at the right price, regardless of the channel. Interestingly, though they spend a significant amount of their free time online, Gen Zers are still more likely to shop in brick-and-mortar stores than their Millennial counterparts, and use their smartphones for various purposes while shopping in retail stores: comparing prices (54 percent), searching for product information (48.4 percent), and searching for reviews (42 percent).

Here are some additional, tantalizing shopping insights from an IBM survey of 15,600 Gen Zers (ages 13–21) across 16 countries:

  • Though 74 percent of Gen Zers spend their free time online, 98 percent still shop in brick-and-mortar stores.
  • Over 70 percent of survey respondents said they influence family purchasing decisions on household goods, food and beverages, and furniture.
  • 66 percent of Gen Zers frequently use more than one device and 60 percent will not use an app or website if they’re too slow to load.
  • Less than 30 percent of surveyed Gen Zers are willing to share health and wellness, location, personal life or payment information.

 

Because Gen Zers are likely to switch back and forth between up to five screens at a time (including television, phone, laptop, desktop and a portable music device), they’re far more accustomed to and comfortable with the omnichannel approach to shopping. Gen Zers are looking for a seamless shopping experience, no matter what the channel. That extends to their expectations on delivery—the bottom line is that Gen Zers expect retailers to get the product to them. If a brand can’t pivot quickly to their needs, they’ll drop it and move on to a company that can.

Favourite apps include Snapchat, Whisper and Secret—visually engaging, video-rich platforms that cater to this demographic’s frenetic attention span, but also offer more privacy than social media channels like Facebook and Instagram.

5 tips for Marketing to Gen Z

  1. Feature authentic content that’s not overly produced (think: snackable content that’s easily shared across social media channels, such as posts of real people vs. celebrity endorsements; videos depicting behind-the-scenes situations; revealing or spontaneous articles, )
  2. Build expertise with content that helps Gen Zers to learn new skills that’ll set them up for future success (think: cooking lessons; packing work-day lunches)
  3. Inspire audiences with social causes to rally behind. It’s not enough to say that your company cares; you need to show it with real, practical impact (think: connecting their purchases to a charity they’re interested in or a cause that’s close to your brand’s mission)
  4. Take advantage of social media for inspiration and to help them build their brand (think: social media ambassadorships; influencer campaigns; virtual focus groups)
  5. Increase your focus on product delivery and fulfillment (think: next-day, same-day or even one-hour delivery policies; free shipping).

 

Looking to leverage your existing eCommerce data to enhance your customer experience in 2018? Get your free copy of “A Beginner's Guide to Personalization: The Differentiating Factor in Grocery eCommerce".


Stefanie Neyland
Stefanie Neyland is a Content Marketing Manager at Mercatus, specializing in all things grocery eCommerce.
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