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    Expert Column: Grocers, Get Ready for Generation Z

    Learn their needs and preferences now to reap success later

    By Jeff Engel, Interactions

    You've seen them in your stores, on the street — and if you're like me, maybe even in your own home. They're always texting with friends or staring at their tablet screens, tuning you out with their headphones and music. No, this isn't some new gang; I'm talking about Generation Z. Born after 1995, the children, tweens and teens of today are a group of constantly connected, multitasking, technologically savvy do-gooders that are getting ready to turn the grocery industry on its head.

    Consider these stats: Generation Z is the fastest-growing consumer group in the world — already making up more than a quarter of the U.S. population. In just a few short years, nearly four out of every 10 consumers will be from Generation Z — and their purchasing power will rise exponentially over the next five to seven years as they grow to be the single largest group of consumers worldwide. According to expert predictions, by 2020, they'll make up 40 percent of the population in the world’s biggest markets, including the United States, Europe, China, India, Brazil and Russia.

    So the question isn't whether Generation Z will have an impact on food retailing — or even when — but how soon. That means there's a prime opportunity for food retailers and CPGs to start working to understand Generation Z's needs and preferences now and set themselves up for potentially huge successes — and sales — in the not-too-distant future.

    We've seen this with nearly every generation that has come before. Take Starbucks and Generation X. Starbucks grew from a small Seattle coffee roaster in the 1980s to a huge international powerhouse with more than 18,000 stores and a catalog of products sold on grocers' shelves today. Their secret to success? Appealing directly to the then up-and-coming Gen Xers' desire for individuality, higher-quality items and convivial social atmospheres. Finding a retailer who "got them" turned Gen X into nearly cult-like followers, many of whom have maintained their loyalty for more than two decades, and have even passed it on to their own children.

    Capturing Their Attention

    So what will it take to capture the attention of Generation Z? To understand that, you first have to look at where they're coming from. Generation Z is growing up in a world where constant connection — via smartphones, tablets and other portable devices — is nearly ubiquitous. They're also the first generation to be coming of age in a time when the firsthand effects of global warming are being seen across the globe through rising sea levels and harsher weather. And they're being heavily influenced by the world's growing obsession with health and wellness.

    All of this adds up to some pretty unique — and perhaps unexpected — food preferences. On the whole, today's teens are more likely to seek out omelets and salads than cereal bars and Hot Pockets. They prefer fresh items to which they can add their own twist as they prepare their own meals. They also go for bold, adventurous flavors, Latin-inspired cuisine being particularly popular. But Generation Z doesn't just care about the flavor of what they put in their mouths, they also want to know how it was made. Sustainability ranks high on their food wish lists — think local and organic fruits and vegetables, non-GMO grains, Fair Trade spices and center store foods packed in reusable, recyclable or compostable materials.

    In addition to delivering the products they want, engaging Generation Z in a dialogue about their food and lifestyle preferences and how you as a food retailer can help them achieve their goals will be key to capturing their attention. Given their propensity for multitasking, marketing messages aimed at Generation Z need to be quick and simple, relying more on visuals than text. Also, they should be less about telling the story you want Generation Z to hear and more about starting a two-way conversation. That really gets to the heart of the matter. Generation Z wants you to get to know them, and when you make that effort, they'll get to know you.

    By Jeff Engel, Interactions
    • About Jeff Engel Jeff Engel is SVP of retail for San Diego-based Interactions, the largest provider of in-store product demonstrations and outdoor experience marketing programs for retailers and brands.

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