From 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.
2. 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.
3. 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.
4. 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.
5. 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.
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6. 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.
7. 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.