The grocery multiples are missing out on the potential that Gen Z shoppers represent by failing to meet their needs where they currently shop.
This is according to a final year Oxford University undergraduate who spent his summer as an intern with consultancy firm The Category Management Company. Reflecting on his time working for the company, Freddie Finlay noted that he has been struck by how grocery retailers are not fully exploiting his generation.
“Gen Z shoppers are making their shopping choices for the first time, shaping our behaviours for the future right now; standing in the wings to play a major role as shoppers for decades to come,” he said.“But whilst Gen Zs must surely present a commercial opportunity, retailers seem to be failing to ‘decode’ our needs.”
First up is what he describes as Format Failure. “With no car, I use shops within bag-carrying distance of my college, so I’m confined to convenience formats, where I find larger supermarket best-selling ranges seemingly compressed into smaller layouts. This is our channel but there is little or no inspiration, just products that largely appeal to my parents’ generation. Where are the products that appeal directly to me?”
This he said leads on to a Range Paradox.“On visits to larger supermarkets, which I never normally frequent, I was overwhelmed by choice. Unique pack formats with striking designs, like Kim Chi noodles or Tikka Masala in a can, are a ‘go to’, but I struggle to find them where I normally shop. The paradox? Gen Z do not shop in larger store formats where the products they want are stocked but shop in convenience formats where they are not.”
Environmental concern is also an issue raised by Finlay. “My generation is the first to have been raised on the importance of protecting the environment,” he said. “But I was disappointed by how little this is reflected in-store in terms of both pack labelling and product grouping. Why not dedicate an easy-to-find section to showcase well labelled environmentally friendly products?”
Meanwhile, Finlay noted that when it comes to meal deals, retailers are also missing a trick: “Meal Deals represent fantastic value for money because both taste and price are important. But variety and trying new things are also central to my decisions. We’re now being offered Iced Coffee, for example, but only alongside old favourites from big brands. Why not use some of the meal deal space to trial innovations or flavours, appealing to a more experimental audience?”
He added: “I love my Clubcard, and expect the algorithms know my exact shopping habits. But I’m not sure they know ‘who’ I am. I may be short on money, but this doesn’t mean I don’t want great-tasting and quality products. Others target students with student-specific discounts, yet grocery retailers don’t seem to take us as seriously. I think it’s simple, build loyalty by using student-targeted discounts on quality products within bulk foods like pasta and convenience products like ready meals.”
Finlay said his period as an intern had put him in awe of the complexity and sophistication of the grocery industry. “But, if my observations are anything to go by,” he added, “there’s a danger that retailers may continue to ‘mainstream’ their offer in the hope that Gen Z will conform in time. And truthfully, I’m not sure that’s going to wash.”
NAM Implications:
- Given the pricing/space constraints of local convenience…
- …perhaps finding ways of easing the constraints of Gen Z access to larger branches of mults…
- …might be more productive?
