All retailers aim to move where the money is, and these days, that means following millennial spending trends. This enormous generation, comprised of consumers born between 1980 and 2000, made up around one-third of the U.S. population in 2013 according to the White House Council of Economic Advisers. Retailers marketing to this generation can’t rely on past successes – they must tailor operations to meet Generation Y’s needs both at the prepared foods section and at the cash register. What factors should retailers watch out for, and how can they impact equipment investment decisions in the coming year?
1. Decreased disposable income
Compared to their predecessors, millennials don’t have nearly as much money to throw around. According to a report from Goldman Sachs, millennials make under two-thirds what Gen Xers brought home on average.
“Gen Y will be most discerning about how it spends, especially on the necessities.”
To that end, grocers and bakeries must work to differentiate themselves from their competitors by providing high-quality products. Though Advertising Age projected total millennial spending will surpass $200 billion in 2017, each millennial earns less than other generations on a case-by-case basis. As such, Gen Y will be more discerning than all previous generations about how it spends, especially on the necessities. Millennials don’t settle – antiquated equipment behind the counter that cannot reliably produce the foodstuffs they want will simply send them to other grocers.
2. Increased food experimentation
Say what you will about millennials, but they are not an average food and beverage customer – a Dawn Food Products, Inc. study found that nearly 8 in 10 millennials consider themselves adventurous eaters, and half believe “interesting and exotic foods” are a must-have at their local grocery stores.
The prepared foods section can do much to bolster a retailer’s “wild side” by offering fresh examples of the trendiest recipes. That said, without a diverse array of prepared food equipment to properly cook these meals, a free sample could turn a customer’s stomach before it changes his or her mind about a food retailer. Beyond updating kitchen equipment to incorporate new cooking methods, retailers must also ensure their staff members are adequately trained to handle an evolving menu of delicious products. Ready-made or take home meals offer excellent opportunities for customers to try new things, but keeping things new and exciting requires the right equipment and expertise.
“Spontaneity could drive millennials to purchase from the deli or bakery.”
3. Decreased meal planning
While many correctly categorize Gen Y as health-focused, preferring fresh ingredients over processed foods, a 2015 grocery shopping trends study from the Food Marketing Institute revealed millennials might be more open to other people preparing their grocery goods if everyone shares the same high standards. Fewer millennials plan out their grocery excursions, and even if they do, a sizeable portion wait until the last minute. Spontaneity could drive millennials to purchase from the meat department or deli where most of the prep work is already done for them, like pre-stuffed meats or gourmet burgers ready to broil or grill, or complete meals like rotisserie chicken or pork and side dishes like a vegetable medley.
In-store impulsivity can play a significant role in millennial shoppers. A grocery retailer equipped to roll out the finest prepared foods can capitalize on Gen Y’s palate, so long as its kitchen contains high-capacity equipment to get the job done. However, impulse shopping is a tricky metric to track. Luckily, equipment like Combi Steamers with Cook Correction Technology can adapt depending on production requirements. Retailers retain the ability to cook more when the demand is there without overcooking meals when machines aren’t fully loaded. In doing so, these businesses can achieve a maximum return from millennials seeking a well-cooked meal without any of the legwork.