Consumers favor smaller formats, frequent visits
You thought it was just smaller carts, right?
It’s not. Retail, is changing — this time, the data suggests, for the smaller and the frequent — customers appear to prefer smaller stores and are willing to visit them more often. Discount retailer like Dollar General, which plans 1,000 new stores this year — have been riding the evolving behavior pattern. The big boys have noticed, too. Even Amazon has, in the past year, changed Prime’s subscription structure and item eligibility to reach out to discount consumers.
Data from e-commerce analytics firm Edge by Ascential show that discount retail stores have been growing at a faster clip than other retail environments. Non-food value-based or discount retailers, like Dollar General, are expected to grow at an annual rate of 5.2% through to 2024. Food discount stores, like Lidl — which began a U.S. expansion two years ago, are expected to grow at 4.9%. Superstores, conversely, are forecast to grow at a 2.7% clip.
One reason? They’re cheap and relatively easy to open, certainly when compared with the logistics of a garden variety superstore. The stores only cost about $250,000 to open
The market does not appear saturated: Consumers’ penchant for discount stores only seem to be growing. Many suggest this is because the domestic economy has been stuck in low gear.
“Although the economy is doing well,” said Neil Saunders, managing director of GlobalData Retail, some areas have faced headwinds. “Wages have stagnated and there hasn’t been a rise in income levels,” he said. Data suggest that despite healthy employment numbers, the average wage “has about the same purchasing power it did 40 years ago.” As a result, a lot of consumers have had to become more value-savvy.
What’s next for this segment? As it meets the challenge of growth, the next phase seems to be convenience. Dollar General, for example, has a pilot program that lets customers to buy online and pick up in store. Aldi, too, has forged partnerships with companies like Instacart, making it possible for people to have their cheap goods delivered to their homes.
File this under “news you can use to beat your head against the wall.” Deep breath:
Millennials are about to surpass baby boomers as the largest generation. Among the areas this demographic, which is 73 million strong, is influencing: Food.
• Millennials tend to like small quantities, and they also like to indulge. To exploit this, StarKist tuna developed a red curry coconut flavor that they sell in a pouch.
• They don’t like cereal. Former Wisconsin Gove. Scott Walker recently commented that the generation’s rejection of breakfast cereal is affecting the milk market.
• Special needs aren’t so — special. A recent survey by vegetarian and plant-based food provider Sweet Earth Foods found Millennial diets differ greatly from other generations. Nearly 60% of millennials eat a special diet, which includes keto, Whole30, plant-based or vegan. They’re not doing this for health reasons, they say they do it to help the environment and because it is more “ethical.”
The average millennial spends 200 hours a year at the grocery store and more than 300 hours a year cooking. Millennials spend $2,200 annually at the grocery store and nearly $1,700 a year eating out.
Speaker giant Bose — known for its noise-cancelling headphones and other high-end sound toys — doesn’t want to limit itself to cool audio products anymore. Its next forays are in the medical space.
“We thought we could make a significant impact in hearing and sleep,” said John Roselli, general manager of Bose Health.
It’s a rich market: 37.5 million American adults suffer form hearing loss. The National Institute on Deafness and Communication Disorders estimates 28.8 million U.S. adults are in need of a hearing aid, which is already a $7.7 billion domestic industry business. Over-the-counter hearing aids could grow the business opportunity further. Bose Health will target these millions of people, not to mention the one in four Americans who periodically can’t sleep. Sleep aids, meanwhile, generate $70 billion in sales.
Bose’s hearing aid has not yet launched commercially, but it has already garnered important federal approval. In 2018, the FDA granted Bose’s current hearing aid “de novo” status, an approval to market novel medical technologies that don’t fit into existing categories.
Bose’s hearing aid is considered “novel” because of its self-fitting features.
Bose started tiptoeing into sleep tech by acquisition. In 2017, it bought Hush, which embeds white noise inside ear buds. It incorporated the Hush technology into its $250 Sleepbuds, which play white noise to drown out nagging sounds. That product, however, was discontinued because of battery life issues.
