Whether it is grocery delivery or click and collect, numerous models of online grocery shopping have emerged in recent years.
Brick Meets Click, a retail consulting agency, predicts this channel will have an annual growth rate of nearly 13% during the next decade.
In addition, 14% of all primary grocery shoppers in the U.S. currently purchase food and beverage items online, according to The Hartman Group, and a large portion of these shoppers are millennials.
With their time-constrained lifestyles and distinctive buying habits, it appears this generation will likely increase its participation in the online grocery game going forward.
Millennials are deeming the “one stop shop” a thing of the past by making multiple trips throughout the week, while also using a myriad of channels for their needs.
Although price still plays a leading role in their purchasing decisions, Gen Yers are more willing to pay for product attributes they prioritize such as convenience, local, organic/natural, and ethnic.
They are also open to trying different distribution models such as purchasing food online to find exactly what they’re looking for.
A 2013 report by the Urban Land Institute found that while stores were still the prevailing location for purchases, 45% of millennials perused retail sites online for an hour or more each day and 91% had made an online purchase during the previous six months.
Ample opportunity also exists for engaging in digital channels that are popular with millennials. For example, responding to reviews on Yelp or posting pictures of freshly picked items on Instagram enables online grocery operators to interact and advertise.
Known for being early adopters, Gen Yers are more inclined to use technology to fulfill their food needs, also serving as an excellent avenue for introducing distribution models and new items.
Digital tools such as a smart phone application or a YouTube video can be used to educate Gen Y consumers about the unfamiliar.
Online grocery shopping might not reduce the frequency of impulse buys, as you might imagine.
According to a 2013 survey by AOL, with numerous hours spent browsing online, over 50% of millennials said they often buy items that were unplanned, noticeably more than the baby boomers (30%) and Gen Xers (40%).
In a 2014 report by The Hartman Group, the top three motives for online grocery shopping were to save time, to save money, and/or to save on gas/avoid driving, all of which are congruous with the millennial lifestyle.
The percentage of millennials currently living in cities exceeds that of any generation in the past, and 40% say they hope to live in urban areas in the future, according to Nielsen.
Additionally, this consumer group does not prioritize owning a car, as car purchases from people age 18-34 plummeted nearly 30% from 2007-11, according to the AAA Foundation for Traffic Safety. Conversely, 76% of millennials own a smartphone and 73% own a laptop, according to Nielsen.
While stores will never be eliminated, retailers who expand their online offerings will have a better chance of capturing the future grocery expenditures of millennials.
Nonetheless, sales of fresh produce via the Internet will undoubtedly remain difficult unless Gen Y consumers fully trust the merchant, believing the selection procedure for fresh items is thorough.
Furthermore, information regarding the selection process for their order and the procurement of products should be easily accessible and well-communicated.
Price breaks, providing produce items with authentic appeal (local, specialty, etc.), and expedited delivery are also particularly enticing as this generation strives to feel good about their purchases and often plans meals and shopping trips at the last minute.
Garland Perkins writes a monthly column on the produce industry from the millennial perspective. She works in sales and marketing for The Oppenheimer Group in its Los Angeles office. E-mail her at email@example.com, or connect with her on Twitter @produce_Mfactor or on Facebook at Produce From a Millennial.
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