MSA and Paradigm Sample, in partnership with Convenience Store Decisions, examine the market basket of 18-34-year-old convenience store shoppers.
By Trish Temmerman, Contributing Editor.
Numerous reports are being written about connecting to and interacting with the Millennial (18-34 year-old) generation. These Millennials, numbering 71 million-plus according to the 2010 U.S. Census, are a key shopper segment within the convenience-store channel given their always-on-the-go lifestyle. The Convenience Consumer Insights Panel (cciPanel), a mobile research panel, tracks the shopping behaviors of convenience-store shoppers, including the 18-34-year-old segment most likely to shop the channel.
A recent study from the Pew Internet and American Life Project (April 26-May 22, 2011 Tracking Survey) reports that the penetration of smartphones is highest among this age group (51% versus 35% of all adults 18 and older). Not only are they technology-savvy, but they are increasingly becoming more dependent on their devices to stay connected with their friends and families; to follow the social causes they care about; and to interact with the products and brands that they are aware of: to “Like”, chat about with their diverse socio-economic network, and ultimately purchase.
Convenience retailers and manufacturers need to gain insights into the shopping behaviors and preferences of this consumer segment in order to cater to their needs and their busy lifestyle. What factors influence their decision to visit one c-store versus another? Which products do they know they will purchase prior to entering a store versus which products are bought on the spur-of-the-moment? Which products actually make it into their shopping basket?
According to a recent cciPanel survey, customers discussed what they want from their local convenience store.
What Customers Want
How frequently do you typically shop at c-stores? Millennials shop more frequently at convenience stores versus the 35 and over crowd, with 17% reporting they visit on a daily basis and three-fourths shopping at least once a week. This creates strong selling opportunities with products aimed at this age group.
Thinking of the convenience store you visit most frequently, what are the primary and secondary reasons you shop at this convenience store? Among all shoppers, the top two primary reasons cited for shopping at c-stores are “convenient location” and “getting in and out quickly.” However, when asked about secondary reasons, “prices,” “a wide selection of products” and “carries my preferred brands” were relatively more important among the younger 18-34 age group. Among the 35 and over customers, “good customer service/friendly employees” and “availability of gas” were noteworthy reasons.
Dollars spent inside the c-store on most recent trip. On their most recent trip, shoppers regardless of age spent roughly the same amount on their purchases inside the convenience store (excluding gas). About 60% spent $10 or less, while roughly 20% paid more than $20 at the register. Considering that 75% of Millennial shoppers report that they typically visits a c-store at least once a week, then retailers should make sure to stock the correct assortment of items, in the right sizes, and at competitive prices to satisfy the needs of this key customer segment.
What Customers are Buying
What categories did you purchase on your most recent trip? Half of all shoppers purchased fuel on their most recent trip. When examining the product mix of their basket, some products that 18-34-year-olds more frequently purchased compared to their older counterparts include:
• Packaged beverages (including soda, water, energy drinks, etc)
• Confectionary and gum/mint products
• Packaged sweet snacks
• Ready-to-eat/packaged-to-go foods
• Dispensed frozen beverages
• Edible groceries
Diving a little deeper into all types of packaged and dispensed beverages purchased, carbonated sodas, sports drinks, energy drinks and fruit/vegetable drinks were more frequently bought among this younger group.
Further examination of the customers’ confectionery and sweet and salty snack product preferences—to suit their immediate consumption needs—reveal that gum, potato chips and chocolate candy were most often included in their basket and more frequently than for their older counterparts. Additionally, chewy and gummy candies, cookies, puffed cheese and snack mix were preferred snack items by the Millennials relative to the 35 and over crowd.
Prior to entering the c-store, did you plan to buy the product or was it a last minute/impulse decision while inside the store? Mission trip objectives can be ascertained by delving into the point in time that shoppers made the decision to buy a particular product. On their recent visit, shoppers reported that:
• Cigarettes was a planned purchase, with two-thirds reporting that it is a routine purchase.
• Chocolate candy was bought more on impulse compared to these other highlighted categories, with 37% of buyers making the purchase decision while inside the store. 15% of chocolate buyers made a special trip from home or another location to satisfy their sweet treat fix.
• Gum, as compared to these other categories, drew customers into the store when buying gas.
What time of day was this recent visit to the c-store? When asked about their most recent trip to a c-store, roughly 20% of Millennials stopped in during the noon-3 p.m. daypart, but half of 18-34-year-olds shopped after 3pm. In contract, 60% of cusomers over 35 shopped earlier in the day prior to 3 p.m. The 18-34 year old shoppers, when compared to their older counterparts, were more likely to be single, with lower education levels and lower household incomes. Forty-six percent of these younger shoppers reside in more densely populated, urban areas.
Implications and Potential
Knowledge of buying behavior such as frequency of shopping, average dollars spent and the preferred categories shopped among key shopper segments, such as Millennials, strengthens category management and product assortment strategy; informs development and implementation of tactics to drive high-value buyer segments to increase their trips and dollars per trip.
Overlay social media and digital influences in the lives of these hyper-connected Millennials, and retailers and manufacturers might want to explore how new technological advances in the areas of mobile wallet payment systems, mobile coupons, location-based messaging and check-ins and social networks could be leveraged to increase store and brand loyalty, and ultimately sales and revenues.