Despite consumer trends and major retailer campaigns, the majority of consumers prefer “retail populism” — discounted prices and convenient store formats — to premium grocery amenities and offerings, TABS Analytics Founder and CEO Kurt Jetta wrote in a commentary in Progressive Grocer.
Jetta suggests that industry fascination with millennial purchasing behavior may be alienating older consumers and hurting business potential. Millennials only make up 17% of the grocery market, and only 20% of that group actually buy organic foods.
Online grocery is another niche offering that’s getting too much attention, Jetta says. Only 15% of consumers buy groceries online regularly, far below the 70-75% benchmark loyalty rate for brick and mortar stores.
Many retailers equate success with staying ahead of consumer trends, but most product developers are pursuing a non-existent market force.
This doesn’t mean that grocery chains should ignore changing consumer sentiment and shopping behavior, but catering to millennial shoppers could turn away older generations with a lot of spending power.
Mass-market consumers aren’t interested in organic produce or expensive in-store amenities such as store dieticians and cooking demonstrations. These trends are being driven by upper-class consumers who only represent 20% of grocery shoppers. This shopping population shouldn’t be ignored by retailers, but it also shouldn’t be treated as the future of the grocery space.
Convenient, low-cost grocery products will continue to be a major demand, and retailers should innovate their offerings with this and the average consumer in mind.