Understanding the Millennials Grocery Trip

grocery, list, cart, shopping, cpg, millennials
When millennial grocery shoppers make a list – they stick to it.

Recently, Food & Restaurant Marketing conducted a research study on the Millennial grocery shopper in which we look at the entire grocery shopping experience. We surveyed a national cross-section of Millennials and uncovered several key insights on how they plan their grocery trip. This post will focus on just one phase of Millennial grocery shopping… how they plan.

In our previous research “Competing With the Refrigerator,” we discovered the decision on where to dine takes place in an extremely short window. Millennials will sometimes start driving without even knowing where they are headed before they start. Also, every millennial has a “shortlist” of restaurants they are willing to visit. In that study, Millennial consumers told us that they choose their own refrigerator over dining out.

In our grocery study, we sought to find similarities and differences in Millennials decision making and consideration set assembly.

Similar to the dining decision time period, the time Millennials think about what groceries to buy is extremely short.

The Millennial grocery shopping trip contains three key elements:
1. Creating their list
2. Finding the right time to shop
3. Choosing the best grocery format

We know that Millennials take a last minute approach to dining as the decision on where to dine takes place in six hours or less. We had a similar discovery in our grocery study. Almost all Millennials make a grocery list either always or some of the time. But nearly 40% of Millennials will make their grocery list on the day they plan to go shopping. Over half of those who make their list the day of, only do so an hour before they actually go to the store. Similar to the dining decision time period, the time Millennials think about what groceries to buy is extremely short.

Knowing when Millennials plan their trip is a good insight but when it’s paired with understanding when they actually go grocery shopping, it becomes an even bigger opportunity for marketers. Our assumption going into the study was that a large majority of grocery shopping was done over weekend. We discovered that the majority of Millennials do in fact shop on Saturdays and Sundays (48%) but over a third of the study said they grocery shop Monday through Wednesday (34%).

This uncovers an opportunity to rise above the weekend noise and allow your brand to stand alone at the beginning of the week.

Finally, we looked at where Millennials grocery shop. While almost all Millennials shop at grocery store chains (92%), most supplement their grocery trips with visits to stores of other formats. A large majority will also shop at superstores such as Target or Costco. This was surprising given all the focus you hear about Millennials affinity towards locally sourced foods. Even more surprisingly, we found a significant number of Millennials who say they grocery shop at Convenience Stores. Those that find themselves shopping at c-stores shop at the same store 64% of the time. This is likely due to a c-store location being on the way to and from work and the nature of those shopping trips.

Our study has shed light on the process Millennials take to plan their grocery shopping trip: How Millennials plan, what the shopping trip looks like to Millennials and finally how this reality affects CPG brands today.

You can view the presentation of our findings here.

How recalls create category parity

frozen food, grocery, shopping, cpg, Eggo
Consumers might freeze Eggo out in light of their recall

Last month, Kellogg’s announced a voluntary recall of their Eggo Whole Grain products due to concerns about potential listeria contamination. They deserve kudos for proactively taking that action. Especially with the knowledge that many brands never fully recover from recalls.

For example, Perrier, which built its brand on natural purity was forced to issue a wide-sweeping recall in the early ’90’s due to the discovery of benzene in their product.

Ironically, the product was being used as a control by a US government agency testing local water supplies when the chemical was discovered. Perrier was forced to recall hundreds of millions of bottles and their share price dropped by $40 after returning to the stock market.

Perrier was once the gold standard for bottled water, and helped invent the category. Though the brand stabilized after being purchased by Nestlé, it lost its leader position.

Things are just as dire for Kellogg’s. Cereal sales are ever-slowing, and all non-protein rich (or perceived) breakfast products are out of vogue. Eggo is a staple in a lot of homes, but sales have also suffered.

Like Perrier, Eggo lovers will now seek out alternate brands in the freezer case. What’s worse, the new generation of shoppers has told us in multiple research studies that they aren’t shy about switching to store brands. Millennials add a new wrinkle with this behavior.

Unlike Perrier which owned first-mover status in their category and had built the brand of a premium or luxury product (depending on the market) Eggo is essentially a commodity. Though a fine product, and well-branded for awareness over my lifetime, it doesn’t occupy a specific emotional niche.

That’s supposed to be why we choose branded products over store brands or unknown brands.

Not only are there other waffles that can fill that space in the freezer, but there are others that share the unique attribute of Eggo – the shape. That some or all of those are also produced by Kellogg’s is a conversation for another article. Once a product in this situation is replaced in the shopping cart once or twice, it is awfully challenging to reclaim that place, especially when private label waffles can be up to 35% cheaper.

That’s the biggest problem here. What did the recall trigger in the minds of consumers? Yes, this event is a literal instance of Eggo being unable to guarantee the safety of its food product. But subconsciously, it’s something bigger. That’s supposed to be why we choose branded products over store brands or unknown brands. That’s why Eggo has been advertising since its inception in the 1970.

Before brand love comes brand trust. If consumers can’t trust the brand, they won’t buy it and can’t come to love it. Young consumers have proven that they are more open to store brands, so instances like this can open the floodgates of customers straying and leaving permanently. A recall is a serious strain on trust that tests the brand in question.

What is a brand to do?

First, Kellogg’s did the right thing for its customers and brand by being proactive. They deserve credit for taking action. They have to find a way to take credit without reminding shoppers (or tipping them off in the first place) that there was a health concern. They might wait until the threat is proven null to do anything.

Since they got proactive with safety, they should get proactive with outreach. Use their owned channels to communicate as the brand returns to stores and offer other Kellogg’s product before that happens. Push complimentary products now to build favorability for those, then offer a compelling offer for Eggo as a bounceback.

Think about the box. Assuming a 6-8 week absence from the shelf, consider this a new product launch. How can Kellogg’s capture the attention of their core shoppers – and new ones – to get them to pick up the product again?

Recalls are never good. Does a health-based recall kill a food brand? Not necessarily, but it won’t be an easy road back to pre-recall sales.

Ten Stamps Later and Your Customers Still Aren’t Loyal

What makes you come back for more? Really think about what makes you loyal for a second, because it’s something you never really question.

For brands relying on frequency like restaurants, the loyalty club has become standard practice. Buy 10, get the 11th free. Some can prove that those clubs drive increased frequency, maybe by .5 visits per month. That kind of increase is certainly valuable. But does it drive true loyalty?

The brands I know with successful loyalty programs are also successful in a bunch of other metrics as well. Funny how that works, isn’t it. Zoe’s Kitchen boasts a great performance from its loyalty club and app. But they do pretty well in store traffic and sales per unit across the board. Maybe it’s because they offer a unique menu mix not found at many other places at a reasonable price and executed well, operationally. They serve the food in a cool environment. Their employees are bright and friendly.

Which of those factors brings people back for that extra .5 of a visit? The free panini in five months or good meals and friendly people while you’re earning it?

Humanity Over Apps

I don’t belong to many loyalty clubs. I don’t like treating meals like a contract with Columbia House. I do use the Starbucks app because it provides more than just loyalty rewards. It offers a fast store finder, ordering tools, and nice payment functionality. The loyalty rewards themselves are on the silly side; access to apps and songs and refills.

A funny thing happened at my local store. I ordered a cup in a hurry, and they had just run out of my roast. The barista recommended a different drink I had never tried, and I accepted because of my helpless caffeine addiction. As she handed it to me, she said “On the house, thanks for trying this.” Super good experience.

Later that week, the Starbucks app crapped out on me and wouldn’t let me pay. I pulled out a credit card and haven’t used the app since. What I learned is that I wasn’t going for the gamification. Or the potential for a free 50th cup of coffee. I was going for the rare spark I get when there is an exchange of humanity.

As slick as I think the app is, (it is one of the best) it deleted part of the brand experience when the customer had to fidget with their phone to pay instead of interacting with the barista. Is that the kind of experience we want customers to be loyal to?

Experience Over Everything

Any store can offer your 11th thing free. It’s easy. Not every store can sell you something you want to have 11 times, in a way that makes you happy to do so. Experience is a huge driver for future visits. Most of that made up of elements that aren’t on the menu or with a UPC.

Are loyalty programs worthless? No. Can they alone drive traffic to a mediocre experience? No. If you are examining a loyalty program, make sure to put the same level of effort into the customer experience you expect customers to be loyal to.