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12/12/18, 7(44 PMGen-Y, Not Gen-Z, Holds The Key- Business News
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The Generation Y (also known as the millennials), bornbetween 1990-2000, is coming of age, and they hold most ofthe keys to unlock grocery retailers' revenue streams. By 2022,Gen-Y will number over 450 million in India.
The millennials will play a big role in India's economic growth,when they enter the workforce and start families. They willoccupy more than 47% of India's workforce in the next twoyears. Globally too Gen-Y has become the biggest and accountsfor more than 28% of the 7.4 billion population.
Home OPINION Columns Story
Dr M Muneer Last Updated: December 6, 2018 | 20:24 IST
Gen-Y, Not Gen-Z, Holds The KeyThe millennials will play a big role in India's economic growth, when they enter the workforceand start families. They will occupy more than 47% of India's workforce in the next two years.
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12/12/18, 7(44 PMGen-Y, Not Gen-Z, Holds The Key- Business News
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While many predict the next generation, the Gen-Z (born after2000), with entirely different preferences and behaviours, willbring disruption; the real game changer will be Gen-Y.
For ages, there have not been many changes in the way groceryretailers managed their business. Even the fairly new grocery e-tailers like Grofers and Big Basket have not understood themarket segments well. They have been sinking in investors'funds deeper and deeper into penetrating households andoutrun the kirana stores. Amazon and Flipkart are sensing bigpotential in groceries and have made tentative steps in testingthe waters.
The Gen-Y - with its size, tech-savvy mindset and sheerpurchasing power - is already driving change elsewhere in theworld, unlike any other generations before it. Indeed theirshopping habits are disrupting the business models of grocerystores. In order to keep up with the pace of change that theMillennials are familiar with (they were born in the era of rapidchanges, remember?), retailers in grocery must deliver bettershopping experience, much more than their products mayoffer.
In a high-growth developing economy, shopping choices areaplenty. Gen-Y tends to spend less on groceries overall ascompared to others. They search for quality food at better valuein many more stores than before. They will spend their rupeesat places where similar values exist for them. Most importantlyfor the retailers, they look for places with meals in their mindsinstead of planning to stock refrigerators for weekly cooking athome.
In a recent study involving over 2000 Gen-Y shoppers, as manyas 40% do their grocery shopping around a specific recipe ormeal while the majority of the earlier generation (Gen-X) tendsto stock up for the month in the beginning of the month.(Going by the Amazon Pantry promo, with special discounts inthe first three days of every month, do you think they don'twant the Gen-Y?)
Another insight was that the Gen-Y doesn't frequent groceryshops much, preferring to go online more. For them, quality ismore critical than quantity but at the same time they considerthemselves as "smart shoppers seeking value" when it comes togrocery shopping. With the hyper proliferation of products,they are increasingly switching between brands and retailerswith comparable quality. Brand loyalty is probably notsomething they stick to, given that most brands offercomparable quality at reasonable value.
This perhaps explains why private label products find moreacceptance today. Most private label groceries from bigretailers offer the same quality at lesser price than big brands
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12/12/18, 7(44 PMGen-Y, Not Gen-Z, Holds The Key- Business News
Page 3 of 8https://www.businesstoday.in/opinion/columns/gen-y-not-gen-z-holds-the-key/story/298082.html
from HUL, ITC or P&G do. Further, Gen-Y prefers digital appsor coupons to physical ones when it comes to saving money onpurchases.
In India, just as in the US, the most populous age group is the20s. The Gen-Y tends to get married later than their oldergeneration, the Gen-X, but they get into more complexlifestyles when they start their families. It is interesting to notethat the single Millennials shop differently than the ones withfamilies. This has big ramifications for retailers when majorityof this age group gets married in a couple of years and raise afamily. The behaviour of current Millennials with children willprovide some indications.
What is astonishing is that Gen-Y with families shop almostsimilarly as Gen-X than one can imagine. It is now apparentwhy Amazon Pantry has identified the best family segmentswith its promo. Clearly, life stage, not generation, is a betterpredictor of future purchase.
There are three broad areas where the Gen-Y with childrenapes Gen-X:
Convenience and monthly budget
Preference to make cooking and shopping easier
Desire to cook more at home
While the Gen-Y with children don't have major differenceswith Gen-X in shopping cart contents or attitude, the subtledifferences in what they buy, and how, will help retailers planbetter. They can do well by focussing on the following keyareas:Revised loyalty programmes: Given their attitude to shoppingsmart with little/no loyalty to anyone, attracting and retainingGen-Y with instant discounts, brand advocacy programmes andengaging shopping experiences will be key. Making specialdiscounts at the beginning of the month (as Amazon does) toencourage bulk purchases is one good step.
Offer right product mix: They don't like processed food and arewilling to pay higher for natural and organic products, unlikeother generations. They are happy to look at meal units as isfashionable in the Silicon Valley where ingredients to cook adish as per recipe will be sold as one unit. Startups like BlueApron and Goodeggs are thriving on this unique insight byempowering the Millennials to cook healthy meals withoutmuch effort. Grocers should look out for those who makefrequent but smaller purchases for meals.
Convenience is digital: Gen-Y doesn't want to make weeklytrips to stores but prefers to get things their way at their time.
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12/12/18, 7(44 PMGen-Y, Not Gen-Z, Holds The Key- Business News
Page 4 of 8https://www.businesstoday.in/opinion/columns/gen-y-not-gen-z-holds-the-key/story/298082.html
They shop at all retailers: Amazon, Big Basket or Grofers.Technology is comfortable for them and they save money, timeand hassles by shopping online. Making digital shopping moreenjoyable will offer an advantage.
Community engagement: Communicating louder than thecompetition in a crowded market is tough. Not only shouldretailers stand for certain values but also should listen tocustomers constantly. Engage in community activities locally tostart dialogues with consumers at festivals and specialoccasions. This is a "Blue Ocean" today.
(The author is Co-Founder and Chief Evangelist at the non-profit Medici Institute.)
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Tags: Retail Sector | Economic Growth | Millenial | Grocery Retailer | Revenue System | Grofers |Bigbasket | Big Basket | Flipkart | Amazon | Grocery Store | Etailer | E-Tailer | Ecommerce | E-
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Vishwanath 10 points
about a minute ago
Will Generation Y behave the same way across all india? Is there urban rural divide here?How can a marketer take a decision? Obviously amazon is much ahead with its consumerresearch. Flipkart under Walmart will catch up?
Like Reply
22 hours ago
Fantastic insights even if the numbers may not hold totally true. The same numbers hadbeen floated by other research agencies as well. But the rural market dynamics,ics may
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12/12/18, 7(44 PMGen-Y, Not Gen-Z, Holds The Key- Business News
Page 7 of 8https://www.businesstoday.in/opinion/columns/gen-y-not-gen-z-holds-the-key/story/298082.html
been floated by other research agencies as well. But the rural market dynamics,ics maynot be the same as urban. However, the educated Gen Y behaviour overall will hold.Thanks.
Like Reply
Gopinath 5 points
3 days ago
I am not convinced that the author's views on numbers will hold good for India's ruralmarkets where it will continue to be local markets and not really the online markets.Perhaps some of them may do occasional household goods that are not readily availablein the local markets but not groceries.
Like Reply
Shiv 10 points
3 days ago
Geny Y or Gen Z, whats the difference? Eventually given India's young age, they will allmatter for the economic growth. Smarter ways of reaching out to them and catering totheir needs will be key.
Like Reply
Kunal 5 points
4 days ago
Being one of the oldest millennial I can confidently say that I fall into this category as perthe author. I am not too much worried about lowest pricing but I am keen to be seen as asmart buyer. So i buy on Amazon and avail of the cash back offers and I do occasionallybuy from Grofers and big basket but both have their on supply chain issues and userinterface issues.
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