Cut through the noise: 3 tips for attracting Millennial and Gen Z shoppers

Chelsey Capps is the director of thought leadership at Daymon, the global private brand experts with over 50 years of delivering end-to-end solutions. She is the co-founder of a functional packaged beverage brand, a former head buyer in the C-store channel, and former innovation leader at Petco. With 15-plus years in retail, Capps is passionate about strategy and consumer behavior, leading Daymon’s thought leadership department.

The generational shift in store choice, alongside the continuing expansion of food retail across channels, has intensified the competitive grocery landscape. While the response to, “Where do you shop for groceries?” used to be “a grocery store,” today the response is more complex as a variety of channels offer groceries — including mass, club, dollar, and online.

While nearly 90% of the oldest generations still choose traditional supermarkets, younger generations are the least likely to shop at supermarkets, instead turning to mass retailers. Gen Z and Millennials now make up 43% of US shoppers, with unique preferences and a differentiated framework for making decisions.

According to recent FMI research, these younger consumers shop the most, at nearly seven retail banners a month across all channels, compared to just five banners shopped by Gen X and four by Boomers. While Gen Z and Millennials are most likely to shop mass retailers, the number of banners shopped has increased since last year, highlighting increasing competition within channels.

With increasingly busy lifestyles, one of the reasons these younger shoppers are shifting to channels like mass and club is the convenience of assortment variety, with the ability to one-stop shop. Beyond variety, there are a plethora of factors impacting store choice: low prices, meeting lifestyle and innovation expectations, and maintaining consistent inventory of preferred brands to deliver on the shopper experience. Daymon custom analysis shows that as high as 98% of national brands overlap across retail banners, making differentiation through a high quality and robust private brand program critical to driving loyalty and ultimately store choice.

Even more compelling, 46% of Gen Z and 43% of Millennial shoppers view private brands as better than national brands when it comes to offering new and innovative products. Leveraging innovation through a strong private brand portfolio delivering the best overall value is a winning strategy to capture younger shoppers.

Let’s look at three ways to deliver on capturing the sales dollars of this group — via innovating to meet lifestyle needs, doubling down on flavor innovation, and reaching them where and how they choose to shop.

1. Meet their core lifestyle needs

With many Millennials either entering parenthood (or in the thick of it), and Gen Z consumers just starting out on their own (or even still at home), these shoppers are looking for brands and products to make life easier. From easily selecting products that are clean and safe for their families to learning how to cook, they seek easy decision making at shelf and opt for brands with strong ingredient standards, convenient meal preparation solutions, and products that meet dietary needs like plant-based or keto.

Sustainability is also critically important to younger shoppers. Retailers should focus on claims such as free-from artificial preservatives and ingredients, minimally processed, and sustainably made.

According to a recent 2023 Mintel study, taking care of mental health and managing stress are also a top health priority for Gen Z consumers. Private brands need to be thinking about the future of wellness, leaning into functional health and wellness ingredients like stress-reducing ashwagandha or reishi.

2. Double down on flavor innovation

Private brands are a tool to drive innovation and on-trend assortments that younger shoppers demand, providing room to increase both browsing time and baskets. Key innovation opportunities for retailers to capture these shoppers include developing bold, head-turning flavor profiles alongside a winning limited-time offer (LTO) strategy driving newness. Our research shows that 90% of younger shoppers view private brands that launch new flavors and LTO’s positively, saying they are exciting, prove to them that retailers care about their wants, and even are a reason keeping them coming back.

Younger shoppers tell us that they like to try new food and beverage products and flavors often, over three times more than the oldest shoppers, “the wilder the better,” with flavors like pizza-flavored ketchup being of interest.

3. Support the digital natives

Creating a destination-worthy experience using technology throughout the path to purchase is important. Retailers should align their omnichannel, online presence, in-store messaging, payment options like buy-now pay-later, and social media personality to capture digital natives. Interestingly, Millennials represent the highest online-reliant shopper group across generations, in particular opting for click-and-collect as a convenient time savings tool to support their busy lifestyles.

However, both Millennials and Gen Z are omnichannel shoppers, with 72% having used a grocery store app in the past year. They compare prices digitally, alongside deal seeking efforts to make sure they feel confident in the value of their purchases. These shoppers are most likely to make mobile purchases and do so amongst a widened competitive set to include DTC brands that are also seeking this shopper’s cart. Offers that can only be redeemed in store, alongside exclusive online deals and digital coupons are important. If the lowest price is aligned across the path to purchase for exclusive private brands, direct price comparison with other retailers can’t happen, offering another clear advantage for strong private brands.

With social media as a top influence for younger shopper purchasing, retailers should be investing in TikTok and Instagram engagement to drive store choice. This can look like quick and fun recipes incorporating private brands, deals on trending items, and working with influencers to increase brand awareness and appeal. With the right strategies in place, and by leading with exclusive private brands, retailers can put their best foot forward to drive younger shopper traffic.