They might not be purchasing homes, investing in stock, or picking up diamonds, but this young demographic drops serious cash for necessities like groceries and gas.
As a collective generation that has completely revolutionized the American business market as a whole, Millennials are reportedly generating more sales in grocery stores than other age groups, according to a new study put forth by Bankrate.com.
According to the study, consumers within the age bracket of 18 and 36 are spending nearly $2,300 more each year on staple purchases in the grocery category, as well as on gas, restaurants, and cell phone bills.
This pattern is a stark contrast to consumers 37 and up, where the trend doesn’t exist. In fact, Millennials spend less than $1,100 on travel and television as a comparison.
While Millennials have previously been reported to have less weight in the market as frugal spenders compared to other age groups, the upward spending on groceries and other staples can be traced back to the group’s general lifestyle habits.
It probably doesn’t surprise you to hear that Millennials are the top smartphone users in the American market, and we can explain the increased amounts they spend on phone usage thanks to this 2016 study put forth by Nielsen.
But as we get closer to the end of the second or third decade in the lifespan of many Millennials, the majority of the generation is slowly but steadily creeping into family life. The oldest Millennials are now in their early-to-mid thirties, firmly established in their careers, seeing more disposable income as they get older, and already putting food on the table for their family. And the youngest in this group are graduating from college and are mostly focusing on costs associated with living in a shared space or amongst their family, especially groceries.
This positions grocers and the food retail industry in a particularly exciting time where Millennials, who have grown up with the Internet and with services like Amazon since its inception, could revolutionize the American grocery landscape with an influx of cash.
Whereas many older Americans have long-established loyalty to branded stores in the grocery retail space. A recent study put forth by Magid shows that more than 50 percent of U.S. consumers aren’t completely loyal to a particular grocery store over another. Millennials readily shop around to meet their personal needs, which paints a hopeful picture for those in the market and the future.
With the younger crowd appreciating in-store innovations—amenities like in-house restaurants and bars, prepared meals, and eye-catching product demos—there’s been a steady change in both local and corporate retail spaces, and storied legacy grocery chains around the country have noticed.
Given that Amazon recently overtook Whole Foods and is closing in on the heels of meal-kit service Blue Apron, the generation that is the most familiar with ecommerce and online shopping could be the main driver to completely change how food is bought and consumed.
Amazon is leading the onslaught of technology into the grocery store with disruptive innovations like the Dash Wand, Amazon Fresh, and the Amazon-to-Go service. But with Millennials in the driver's seat directing sales in this ever-changing landscape, where does the buck stop, exactly?
Will more and more retailers take in-store technology to the next level as they compete for the biggest share of the influx of cash from America’s youngest adults?
We’ll just have to wait and see, but the rise of an online grocery marketplace in the future doesn’t sound too far off, especially if this generation has anything to say about it.