For years, grocery retailers followed a simple formula to identify their key customer. The target was a woman 19 to 49 years old. Why? Because this group most often was married, had children, were homemakers and did the majority of grocery shopping. Their shopping list was usually made up of recipes for family meals. As time moved on, not only did those shoppers born between 1946 and 1964 become known as “Baby Boomers” and referred to as a demographic class, but over time, pundits found names for different age groups. Those generally born between 1980 and 2000 were referred to as Millennials. Others referred to in this column are Gen-Xers (1960-1980) and Gen-Yers (1980 to 1990).
In terms of numbers, the Millennials passed the Baby Boomers 75.4 to 74.9 million in 2015.
However, the younger Millennials became known as Gen-Xers. As of 2015, the Millennials surpassed the Gen-Xers in number—74.9 million to 74.5 million—in 2015.
Maybe the CBS TV show “Survivor,” which used demographics to pit two age groups against each other to determine which could survive for a month eating beans and bugs, will clear things up. “Survivor” pitted the Millennials against the Gen-Xers. The Millennials were described as “ambitious, creative, open-minded and dreamers”; the Gen-Xers as “independent, pragmatic, hard-working and realistic.” We won’t know who wins until September, when it airs.
A recent study by Pew Research reported facts about 18- to 34-year-olds that can make those demographic labels even more confusing. The study concluded that for the first time in modern history, living with parents has become the primary living arrangement for the 18-to-34 age group. In 2014, 32.1 percent of young adults lived in the parents’ home, exceeding marriage and co-habitation. In 1960, 62 percent of this group were married or living with a significant other. This trend is driven by a less-than-favorable job market, the burden of student loans and an inflated real estate market.
Given Pew’s findings, there is a growing number of Baby Boomers finding room in their homes for a Millennial or Gen-X child. Many of this group living with their parents have never had a full-time job.
Based on recent industry findings, there are some interesting shopping findings that have surfaced and are consistent with the Pew’s study.
• Approximately 40 percent of Baby Boomers are no longer employed, either retired or unemployed. This number may vary depending on the economy.
• Baby Boomers spend $20 more a week on groceries than do Millennials. What we don’t know is how much of the increase is due to 18- to 34-year-olds returning home.
• Baby Boomers make 67 percent of their grocery purchases at a supermarket—an atmosphere where they feel comfortable. Millennials prefer to shop at superstores or online.
Whether you are aware of the “Survivor” show or the Pew study, none of this information alone is sufficient to build a marketing plan.
The supermarket that is most successful is one that understands the importance of communication between a store manager and a category manager. An experienced store manager knows more about the needs of their customers than someone reviewing data, demographic or otherwise, remotely.
Chase those sales. They won’t chase you!
After a 40-year career that included executive-level positions with Safeway, Lucky Stores, Appletree Markets and Save Mart/Food Maxx, Art Patch retired from the retail grocery business in 2007. He is a graduate of San Jose State College and the Cornell Food Executive Program. Patch is on the ExecuForce Team of Encore Associates and is a counselor for SCORE, helping new and emerging businesses develop business and marketing plans. He welcomes your feedback; email him at [email protected].