It is going to take more to win with Millennials this holiday season than sharp prices on key items, according to new research from Accenture.
The consulting firm found that older millennials will spend $779, on average, while nearly four times as many younger millennials compared to baby boomers (49 percent versus 13 percent) said they plan to spend more this holiday season. The research also found that retailers’ inclusion and diversity practices – with regards to age, gender, ethnicity and disability etc. – are playing a role in millennial shoppers’ purchasing decisions. The findings suggest that if a retailer is not authentically committed to prioritizing inclusion and diversity, millennials are likely to take their money to a competitor who is inclusive.
“Our research suggests that the millennial generation has high expectations when it comes to retailers’ commitment to inclusion and diversity, and those values are influencing their decision-making in choosing one brand over another,” said Jill Standish, Senior Managing Director and Head of Accenture’s Retail Practice. “National and multinational retailers serve diverse customer bases, so they need to position the brand accordingly – its messaging as well as its product selection. That will require not just more local decision-making, but also assistance from analytics tools that enable retailers to build a granular picture of their customers.”
Millennials are more likely to choose one brand over another if that brand demonstrates inclusion and diversity in terms of its promotions and offers (cited by 70 percent of younger millennial respondents and 69 percent of older millennials), their in-store experience (66 percent of younger and 72 percent of older millennials), their product range (68 percent of younger and 70 percent of older millennials), and their environmental awareness (61 percent of younger and 57 percent of older millennials). 54 percent of younger millennials surveyed believe that retailers have a responsibility and duty toward addressing wider social and political issues with regards to diversity. 51 percent of younger millennials are more likely to shop at a retailer that demonstrates awareness of such issues. 31 percent of younger millennials see diversity in the workplace – with regards to staffing, as an important attribute when it comes to deciding where to shop.
This year for the first time, Accenture’s survey included questions related to food shopping for the holidays. A key finding: quality matters, and shoppers are willing to pay more for it. Six in seven shoppers (86 percent) cited quality as “important” or “very important.” In addition, consumers are also likely to “trade up” when shopping for food this holiday season, with more than half (54 percent) likely to shop from a high-quality retailer and nearly as many (48 percent) likely to buy premium brands instead of the market’s own label.
When asked to select the factors that influence their purchases when shopping for groceries during the holidays, respondents most often cited “trust of the grocery provider and its products and services” – with 82 percent of respondents ranking it as one of the top three factors – followed closely by “offers best range of options so you can buy majority of items in one place” (78 percent). More than two-thirds (69 percent) of consumers cited convenience/location of the physical store as the key factor that would inspire them to purchase from a grocery provider they don’t normally go to.
Millennials are leading the holiday hosting trend, with younger millennials (ages 21-27) 50 percent more likely than baby boomers to say they plan to host a Christmas meal or party (60 percent versus 40 percent) and to host a Thanksgiving meal (62 percent versus 41 percent) – and more than four times as likely as baby boomers to say they’re planning to host more holiday meals this year than last year.
“Holiday meals have historically been how we show we care for our loved ones,” said Standish. “It’s positive to see millennials, with their significant purchasing power, taking a greater interest in hosting these important holiday meals at home. And what an opportunity for grocery retailers to meet this generation of shoppers. If done right, it might be the start of a relationship that will last all year and beyond.”
In addition, the online survey of 1,500 U.S. consumers found that Americans will spend $658 on holiday shopping this year, on average, compared with $632 in the 2017 survey. Nine in 10 respondents said they plan to spend as much or more than they did last year – 53 percent and 36 percent, respectively – with only 11 percent planning to spend less.
To read the full survey findings, click here.