As the wave of Baby Boomers ebbs into re- tirement, a new gen- eration of consumers is just starting to flex its purchasing power. Millennials, as Americans born from the early 1980s to the
mid-2000s are collectively known, currently account for $1.3 trillion dollars in
annual consumer spending, according
to the Hartman Group. That sum is even
more impressive when you consider
that members of this generation are still
at least a decade away from their peak
Ranging in age from 19 to 34 this year,
Millennials sit right in the demographic
sweet spot for convenience stores. But
stores are finding that the same strategies that kept older generations coming
through their doors won’t work with Generation Y, another name for Millennials.
To harness this generation’s substantial spending, convenience stores
should understand what these consumers are all about and find new ways to
cater to their needs.
While previous generations hit adult-
hood milestones like stepping stones,
Millennials seem to be forging their own
paths — waiting longer to marry, buy
houses and have children, or shunning
these rites of passage altogether. This
departure from tradition is shifting the
paradigm in industries from real estate
to retail and resulting in a few challeng-
es for convenience stores in particular.
Take Millennials’ attitude toward
transportation. The average 16- to
34-year-old drove nearly a quarter less
in 2009 than in 2001, according to U.S.
PIRG, and a separate Deloitte study
showed that Millennials have a strong
preference for fuel-efficient vehicles
such as electric cars and hybrids. Those
trends could spell trouble for conve-
nience stores that are not nimble enough
to accommodate new fuel preferences.
“We’re not going to get a lot of gal-
lons of fuel from these customers, but
we can get their snacks, breakfast and
lunch,” said Ernie Harker, executive
director of culture, research, events,
advertising, theming and excitement
at Maverik, which owns more than 260
convenience store locations throughout
the Western United States.
Gen Y isn’t following previous generations into the suburbs either. A recent
study by the American Public Transportation Association found that 90%
of Millennials in six metro areas — Boston, Chicago, San Francisco, Seattle,
Portland and Washington, D.C. — live
within the city limits or just outside. Urban dwellers tend to have smaller living
quarters and make shorter trips than
their suburban counterparts, and that
trend is forcing big box stores into competition with convenience stores.
“Mass retailers are having to figure out
small format,” said Katie Elfering, a consumer strategist with CEB Iconoculture.
Millennials (also known as
Generation Y) generally re-
fers to the generation of
people born between the
early 1980s and the early
2000s. The demographic has
also been called the Peter
Pan or Boomerang Gener-
ation because of the pro-
pensity of some to move
back in with their parents,
perhaps due to economic
constraints, and a growing
tendency to delay some of
the typical adulthood rites
of passage like marriage or
starting a career.