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7 ways c-stores are catering to millennials

CTM-Inbound-Blog-April2019-CstoreMillennial-FFrom the beginning, convenience stores were ready-made to serve the youth market – with a large range of products and services specifically aimed at teens and young adults with spare change burning a hole in their pockets.

The thing is, the youth market is continually evolving. Fortunately, convenience stores have proven to be quite good at evolving alongside them.

Much has been made about millennials (who prefer to be known as ‘young adults’).

Who are millennials?

Born between 1981 and 1996, millennials represent 27.5% of Canadian population.

According to 2018 findings by international research firm Nielson, millennials are the fastest growing generation in Canada. Interestingly, since 35% live with their parents, they are under-represented in the Grocery category (scoring -23% on Nielson’s fast-moving consumer goods (FMCG) index compared to other Canadians. Yet they score ABOVE the rest of the nation in the Convenience category at +103%.

This may also be driven by a tendency to shop for what they need right now versus buying items such as milk as part of a trip to the grocery store. Nielson says this is driving frequency of visits to convenience stores.

Oh, and if you believe the myth that millennials don’t have driver’s licenses (and aren’t a primary target for your convenience store) think again. DesRosiers Automotive consultants found a rise in the number of millennials who are getting their licenses. It says financial reasons may be behind later car ownership. Yet, even those who don’t own cars are likely to use tech-based alternatives such as rideshare services.

These young adults are a valuable target demographic and here are seven ways modern convenience stores are catering to millennials.

  1. Healthier food options

To compete for today’s young customers who are more health-conscious than previous generations, the convenience industry has to think beyond junk food (pop, chips and chocolate bars) and start offering healthy alternatives. This includes fresh sandwiches, fruit and salads. Also, vegan options (once considered a fringe market) have now gone mainstream.

It is also important to consider options for those with dietary restrictions, such as dairy allergies and gluten intolerance. Research shows the global market for gluten-free products have steadily grown, and is projected to reach $4.6 billion by 2020.

The good news is that today there are a growing number of manufacturers with products that are a natural fit for convenience stores: including dairy-free, gluten-free and fat-free ice cream alternatives.

  1. Rethink your drinks

Millennials have largely driven the market for sports energy drinks, which are now a mainstay in coolers across Canada – and will continue to be in high demand. Pop and slushes continue to remain popular. Emerging drink categories to keep your eye on are kombucha and cold coffee beverages.

Surprisingly, research shows millennials are also big purchasers of milk and fruit juices.

  1. Convenience store delivery

In the age of Skip the Dishes and Uber Eats, even convenience store visits aren’t convenient enough for some. So, millennials are having the c-store brought to them. As one of the few options open 24/7, it makes sense. And those with a quick service restaurant or hot food offering are that much more attractive.

Many industry voices suggest there may be a demand for more diverse convenience stores to partner with delivery services for grocery items – something that large grocery chains are rapidly adopting.

  1. Think electronic accessories

Millennials live and breathe by their mobile devices. More and more stores are introducing an expanded selection of mobile device accessories: from chargers to cases to battery packs to headphones. Some stores are even opting to carry premium brands.

  1. Not your dad’s vending machine

Around the world, vending machines are offering a sophisticated array of food and beverage products: everything from sushi to fresh meat. Such options are making their way to Canada and c-store may be a logical location due to the security and 24/7 access.

  1. E-cigarettes and cannabis replacing traditional tobacco

Between health and restrictions concerning public smoking spaces, traditional tobacco products are on the decline with this group – but do remain popular with the older demographic (so you may not want to reassign all of that shelf space prematurely). E-cigarettes and accessories are replacing these products, but fall under many of the same rules for display and security.

The newly legalized Canadian cannabis market is worth keeping an eye on, to see if opportunities emerge for convenience stores. Couche-Tard is already exploring this opportunity.

  1. A green generation expects sustainable choices

Nielson found three in four millennials are willing to pay extra for products and services deemed to be sustainable. What does this mean for c-stores? It may involve a new way of thinking when it comes to finding products with more environmentally responsible packaging (avoiding overpacked products, minimizing plastic bags, and using biodegradable cups, plates and containers, for example).

“Brands that establish a reputation for environmental stewardship among today’s youngest consumers have an opportunity to not only grow market share but build loyalty among the power-spending millennials of tomorrow, too,” says Grace Farraj, SVP, public development and sustainability, Nielsen.

The definition of convenience is changing

C-store owners can’t simply stay the course to keep up with the changing demands, expectations and buying habits of this increasingly influential demographic. Fortunately, millennials put a premium on convenience – which just happens to be our wheelhouse! Always think of ways you can take convenience to the next level.

Come see us at Booth #512, Toronto CARWACS March 3 & 4, 2020

Click here to learn more from CTM Design Services Ltd. 

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Millennials represent opportunity for c-store retailers

Shutterstock

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Millennials (individuals born between 1980 and 2000, or those who are currently between the ages of 18 and 38 years old), in Canada are mighty in size, but data suggest they’re spending less than their size suggests they should.

According to Statistics Canada, Millennials account for 10.1 million consumers across Canada, representing 27.5% of the total population. Despite the big numbers, however, this generation accounts for just 12% ($13.2 billion) of the country’s fast-moving consumer goods (FMCG) spending. The upside for manufacturers and retailers, however, is that Millennials lead all generations in dollar spend per trip.

So why are they shopping less? Partly because of their increased trips to restaurants, as studies show Millennials led other age cohorts in trips per capita to restaurants. Canada now has an abundance of restaurant options with eclectic cuisines, which makes dining out a desirable and easy alternative to cooking at home.
The news isn’t all bad, however. Even though Millennials make fewer trips than other shoppers, they spend more per trip than any other generation. Millennials spend $55.45 per trip, up $2.11 from last year, and more than $7 above the national average. In addition to shopping trip differences, Millennials shop in different stores and tend to prefer dollar, drug and convenience stores more than the average shopper. In fact, millennials are 103% more likely to shop in the convenience channel than the average Canadian.

But as Millennials shop less, manufacturers and retailers need to work to pull them back into the store. One strategy involves identifying what Millennials are seeking outside the store and finding ways to meet those desires in store. For example, by offering ready-to-go meal kits and a variety of deli-prepared foods from different cultures in store, convenience retailers can provide a new shopping experience that encourages consumers to spend on items they might otherwise purchase at other out-of-home channels, like restaurants, in a quick and easy channel.

Providing a full-service offering with a great experience to a customer within a small store format can be challenging. First, small format stores should continue to defend the areas that differentiate them from large format stores – their convenient location, customer service and the quality and range of foods to ‘eat now’. Raising the bar on areas like offering more of a range to meet their customers’ needs, high quality fresh food, fast checkouts and ease to shop quickly are also ways to compete more closely with large format stores.

With dwindling time, and the increasing interest in health and wellness, convenience stores are well positioned to empower consumers to become their perceived selves and provide convenient, healthy options. By focusing on the needs of the convenience consumer, while staying true to the core offering of the channel, manufacturers and retailers in the convenience channel can not only maintain growth but flourish at a time of market disruption.

The convenience channel is also well positioned to meet the needs of consumers looking to top up quickly. Convenience stores therefore need to focus on the reasons that shoppers come into their stores for these trips. By honing their offering to become the obvious choice every time someone needs milk, their morning coffee or a great snack for the road, convenience stores will win the trip over other channels.
As the Canadian convenience retail landscape evolves, the road is filled with new and unique opportunities to align with consumers’ growing interest in quick trips and new product offerings. Convenience retailers that provide consumers with a variety of high-quality, convenient prepared foods will help ensure that consumer dollars, and especially the all-important Millennial dollar, stay in the c-store.

Isabel Morales is the manager, consumer insights for Nielsen Canada.

 

 


Millennials offer up opportunity for convenience retailers

Screen Shot 2019-06-07 at 9.49.38 AMMillennials (individuals born between 1980 and 2000, or those who are currently between the ages of 18 and 38 years old), in Canada are mighty in size, but data suggest they’re spending less than their size suggests they should. According to Statistics Canada, Millennials account for 10.1 million consumers across Canada, representing 27.5% of the total population. Despite the big numbers, however, this generation accounts for just 12% ($13.2 billion) of the country’s fast-moving consumer goods (FMCG) spending. The upside for manufacturers and retailers, however, is that Millennials lead all generations in dollar spend per trip.

So why are they shopping less? Partly because of their increased trips to restaurants, as Millennials led other age cohorts in trips per capita to restaurants in 2017. Canada now has an abundance of restaurant options with eclectic cuisines, which makes dining out a desirable and easy alternative to cooking at home.

The news isn’t all bad, however. Even though Millennials make fewer trips than other shoppers, they spend more per trip than any other generation. Millennials spend $55.45 per trip, up $2.11 from last year, and more than $7 above the national average. In addition to shopping trip differences, Millennials shop in different stores and tend to prefer dollar, drug and convenience stores more than the average shopper. In fact, millennials are 103% more likely to shop in the convenience channel than the average Canadian.

But as Millennials shop less, manufacturers and retailers need to work to pull them back into the store. One strategy involves identifying what Millennials are seeking outside the store and finding ways to meet those desires in store. For example, by offering ready-to-go meal kits and a variety of deli-prepared foods from different cultures in store, convenience retailers can provide a new shopping experience that encourages consumers to spend on items they might otherwise purchase at other out-of-home channels, like restaurants, in a quick and easy channel.

Providing a full-service offering with a great experience to a customer within a small store format can be challenging. First, small format stores should continue to defend the areas that differentiate them from large format stores – their convenient location, customer service and the quality and range of foods to ‘eat now’. Raising the bar on areas like offering more of a range to meet their customers’ needs, high quality fresh food, fast checkouts and ease to shop quickly are also ways to compete more closely with large format stores.

With dwindling time, and the increasing interest in health and wellness, convenience stores are well positioned to empower consumers to become their perceived selves and provide convenient, healthy options. By focusing on the needs of the convenience consumer, while staying true to the core offering of the channel, manufacturers and retailers in the convenience channel can not only maintain growth but flourish at a time of market disruption.

The convenience channel is also well positioned to meet the needs of consumers looking to top up quickly. Convenience stores therefore need to focus on the reasons that shoppers come into their stores for these trips. By honing their offering to become the obvious choice every time someone needs milk, their morning coffee or a great snack for the road, convenience stores will win the trip over other channels.

As the Canadian convenience retail landscape evolves, the road is filled with new and unique opportunities to align with consumers’ growing interest in quick trips and new product offerings. Convenience retailers that provide consumers with a variety of high-quality, convenient prepared foods will help ensure that consumer dollars, and especially the all-important Millennial dollar, stay in the c-store.

 

Isabel Morales is the manager, consumer insights for Nielsen Canada.

 


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