A $1.4T Opportunity for Food Retailers
Grocers not already adding restaurants and other experiential features to their physical stores may be missing out on a big revenue opportunity.
According to new research from 5W Public Relations, dining out and experiences rank at the top of the list of categories that consumers, especially younger consumers such as Millennials, are most likely to splurge on. The agency's 2020 Consumer Culture Report shows that dining out and travel/experiences ranked first and second respectively across all generations as the most splurge-worthy categories, beating out fashion, beauty, electronics, and health among others.
Overall the consumer categories ranked in the following order:
- Dining Out 43%
- Travel/Experiences 41%
- Snacks 39%
- Electronics 35%
- Health & Wellness 33%
- Personal Care 30%
- Shoes/Accessories 30%
- Beauty 29%
- Home Goods/Furniture 29%
- Clothing/Fashion 27%
"Our data shows that the trend of buying experiences over possessions is not only on the rise, but that people are willing to spend the highest amount of money on these categories," said 5W CEO and Founder Ronn Torossian. "There is a huge opportunity for growth and expansion in the travel, entertainment, hospitality and restaurant industries this year. Furthermore, all consumer brands need to realize that their customers value experiences first, and tailor their messaging to capture this want."
Specifically, Millennials are projected to spend $1.4 trillion in 2020. Their No. 1 "splurge" is dining out, according to the report. In addition, at least 68% of them prefer finding new products in-store to finding them online, and 83% of Millennials say it’s important for the companies they buy from to align with their beliefs and values.
The report detailed some key takeaways for retailers:
- Tell stories (visual or otherwise) about the experiential value of your products beyond the dollar value.
- Take the regret out of impulse purchases through easy return policies.
- Facebook reigns supreme as the most used social media platform.
- Allow opportunities for discovery, sharing and conversation.
- Know your customer – what do they think, feel and believe, and how can your brand purpose motivate them to engage with you?
- Stories about a product in the news, magazine or newspaper still remain the most impactful in making purchase decisions when compared to traditional advertising.
The data in 5WPR's Consumer Culture Report was collected from an online survey that ran from Nov. 13 to 18, 2019, by MARU/Matchbox on behalf of 5WPR. The survey was conducted among a nationally representative sample of 1,001 American adults aged 18+. The report includes unique consumer statistics on industries, buying behaviors by generation, social media marketing, corporate image, brand activism and more.