Get to know the Millennial customer

By Isabel Morales

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 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.