Targeting Gen X & Y? Think Social.
As Gen X and Y shoppers command more and more buying power, forward-thinking retailers will keep the behaviors and preferences of young consumers top-of-mind when developing strategies to compete in the ever-fragmented grocery industry.
And, according to the results of a recent survey by Chicago-based KPMG, there’s no better way for retailers to appeal to this segment than to position themselves on the forefront of socially conscious business practices, such as transparency in product labeling, identifying fair-trade and conflict-free items, and taking part in the myriad environmental and sustainability initiatives.
To quantify the point, 70 percent of consumers under 30 consider social issues before making a purchase, outpacing the less than 50 percent of the overall population who do the same. According to Jim Low, audit partner at KPMG, human rights and sustainability campaigns “begin on college campuses,” and “it would fall within reason that younger people are more influenced by social issues when they shop.”
Retailers in lock-step with this trend are working with suppliers to assess their environmental and social sustainability. And, according to Low, leading grocery chains have even introduced ranking systems to help shoppers identify sustainable products, driven by the “increased pressure” consumers and investors have placed on companies to adopt such practices.
According to the survey, more expensive purchases such as automobiles, computers, electronics and jewelry spark slightly more social concern among young consumers (41 percent) versus everyday purchases like gas, toys and food (34 percent).
Such big-ticket items often contain what are referred to as “conflict minerals,” which include tin, tantalum, tungsten and gold, the sourcing of which may involve human rights violations in certain parts of the world – an issue that saw 75 percent higher awareness among consumers under 30 than the general population, according to the survey.
On the heels of the Dodd Frank Act – a piece of legislation concerning the regulation of conflict minerals, which seeks to curb funding of militias in the Democratic Republic of the Congo (DRC) and adjacent countries – companies must now identify their products as DRC conflict-free, not DRC conflict-free or undeterminable.
"Celebrities and college campuses around the nation are organizing awareness and conflict-free campaigns,” added Low. “Based on our survey results, companies who have a head start on this issue are in a position to quickly carve out a competitive advantage with consumers. What's more, greater supply chain transparency can help companies develop a more resilient and efficient supply chain."
So, given that these business practices not only support social responsibility and target a lucrative consumer group, but can also improve overall operations, how does your company plan to “think social" in the coming year?