MILLENNIALS ON MILLENNIALS U.S. SHOPPING INSIGHTS IN A NEW ERACopyright © 2018 The Nielsen Company (US), LLC. FALL 20182Copyright © 2018 The Nielsen Company (US), LLC.WELCOMEThe fast-moving consumer goods (FMCG) market is facing a variety of growth challenges. As large consumer segments age, a new group is gaining relevance.Making up 26% of U.S. shopping households, Millennials are the future front-runners in generational spending power.As Millennials, we are the most diverse generational segment to date from an ethnic and racial perspective, and as a result, our perspectives about consumer spending, shopping channels, information transparency, social responsibility and health consciousness are as unique as we are individually.Generalizing and trending the variety of perspectives and life stages present among Millennials can be a challenging task for FMCG companies. As a part of this dynamic generation, we feel uniquely positioned to analyze the data and provide insight into the distinct consumer behaviors of U.S. Millennials.Focusing on data-driven insights and adding in personal perspectives provides a necessary rich comprehension that can influence the decisions of advertisers, manufacturers and retailers. This report provides FMCG organizations with critical knowledge they need as they compete for our attention and our dollars.Within this report, generations are defined as follows: Greatest Generation: born before 1946 Baby Boomers: born between 1946 and 1964 Generation X: born between 1965 and 1976 Millennials: born between 1977 and 1995, or consumers under 35 as of 2017. This is different from the Millennials on Millennials report on TV and digital news consumption, which categorizes Millennials as 21-37.- THE NIELSEN MILLENNIALS ON MILLENNIALSGATES HELMSSENIOR ANALYSTNATASHA SAYLORCLIENT MANAGERNEERAL MEHTAANALYSTJUSTIN WIRTHASSOCIATE CLIENT MANAGERNICHOLAS KAUFMANSENIOR ANALYSTCAROLINE SCAGLIONESENIOR ANALYSTKEY TAKEAWAYSMILLENNIALS GATHER INFORMATION USING NEW MEDIUMSMILLENNIALS CARE FOR INTEGRATED CORPORATE SOCIAL RESONSIBILITY INITIATIVESMILLENNIALS ARE MORE LIKELY TO PUT DOLLARS BEHIND HEALTHSpecial thanks to Samantha Stricker and Ronjan Sikdar.3Copyright © 2018 The Nielsen Company (US), LLC.The Millennials on Millennials Report is led by Nielsen Millennial associates and analyzes the unique nature of this demographic group by leveraging Nielsen data-sets and fielding custom surveys to provide deeper insight into the attitudes and behaviors of Millennials in regards to purchasing behavior. The intent of this primary data collection was to complement information obtained on these topics from other existing Nielsen primary and secondary datasets. Utilizing BASES E-Panel, 1,058 interviews were obtained among U.S. residents ages 18+. Millennials were defined as 18-34 year olds. Data is weighted by age and gender to ensure adequate demographic representation. Nielsens Homescan Panel is a nationally based and geographically representative panel of households who continually track purchase data and their household demographic information. Panelists use mobile app or in-home scanners to record all product purchases for household use. Panelists are then weighted and projected to represent U.S. Census estimates.For the purpose of analysis we will be using index figures to better understand Millennial spending relative to the spending of the total population. Generations were defined as follows unless where otherwise noted:METHODOLOGY Total U.S., 52 weeks ended 12/31/2017.SHOPPING HABITS BY GENERATIONMILLENNIALSGENERATION X100123146149BABYBOOMERSGREATESTGENERATIONTRIPS PER SHOPPER$ SPENT PER TRIP$57 $55 $46 $40MILLENNIALS GENERATION X BABY BOOMERS GREATEST GENERATION7Copyright © 2018 The Nielsen Company (US), LLC.MILLENNIALS ARE TRANSITIONING TO FAMILY LIFESTAGESReflective of their entrance to parenthood, Millennial spending habits are shifting. Notably, theyre spending a greater amount of their income on baby care and family planning categories. And as their families grow, theyre buying more food as well, with Millennials spending more than other generations on easy and convenient products for families. However, some stereotypes also shine through. Millennials tend to spend more on newly growing categories. For example, they spend 80% more than the rest of the population on alcoholic cider.TOP CATEGORY BUYING INDEXES AMONG MILLENNIALSSource: Nielsen Homescan Panel; Total U.S., 52 week ended Dec. 31, 2017. Millennials identified as households with head of household under 35 years of age.Index value can be read as: Millennials spend 76% more of their $ than expected on Lunch Combination compared to the total population. FOOD CONSUMPTIONFROZEN BREADED CHICKENLUNCH COMBINATIONSHELF STABLE CONVENIENT BREAKFASTSHELF STABLE CHOCOLATE DRINKINSULATED CONTAINERSBOXED PREPARED DINNERS183176160 160150 150BABY CAREBABY FOOD DISPOSABLE DIAPER they shop with value retailers frequently. And as a result, they spend a higher percentage of their disposable income in value-related channels rather than convenience-related channels (i.e., drug, convenience and gas stores). Source: Nielsen Homescan Panel; Total U.S., 52 weeks ended 12/31/2017.*Note: “deal” in panel refers to perceived deal.SHARE OF CONSUMER SPENDING BY CHANNELCONVENIENCE / GAS STOREDOLLAR STOREDRUG STOREPREMIERE FRESH GROCERYVALUE GROCERYMASS MERCHANDISERW/O SUPERMARKETCLUBSUPER CENTERSCONVENTIONAL GROCERY2%4%3%3%4%5%9%7%11%9%11%8%18%19%30%25%33%32%MILLENNIALS TOTAL POPULATION9Copyright © 2018 The Nielsen Company (US), LLC.THE GENERATION OF RESEARCHERSWhile consumers have myriad channels and options to meet their FMCG needs, retailers shouldnt underestimate the importance of brick-and-mortar operations. In fact, the latest Nielsen Category Shopping Fundamentals study found that 60% of consumers FMCG decisions are still made at the shelf. Millennials are, however, more active than older generations on social media, which affects the way they look for information when shopping. For instance, Millennials are significantly more likely to conduct an online search than the broader population when shopping for common items such as food or cleaning products. Additionally, the way consumers seek out information tends to differ across categories. In 2017, we conducted a custom E-Panel survey to probe on shopping behaviors and motivations among Millennials and the broader population. When it comes to health/beauty products, most people ask family members for guidance and opinions; Millennials, however, are more inclined to trust friends and social media when researching in this category. Theyre also more likely to check user reviews than they are to ask a family member or their friends. PERCENT CLAIMING THEY USE SOURCE WHEN SHOPPING FOR COMMON ITEMSSource: Nielsen BASES E-Panel; 10/27/2017 - 11/10/2017.INFORMATION SOURCES WHEN SHOPPINGMILLENNIAL WOMEN MAY BE MORE INCLINED TO IMPULSE SHOP, WHILE MEN CLAIM TO DO A BIT OF RESEARCH ON MORE COMMON ITEMS.FEMALES MALES49%56%64%49%FEMALES MALES49%56%64%49%IF IT LOOKS GOOD, I BUY IT ONLINE SEARCH57% 57%55%53%54%48%19%18%24%28%53%39%54%41%25%15%23%14% 14%6%3%8%IF IT LOOKS GOOD I BUY ITFAMILY FRIENDS DOCTOR / DIETICIAN REFERRALTV ADS ONLINE SEARCH USER REVIEWS FACEBOOK YOUTUBE INSTAGRAM OTHER MENTIONSMILLENNIALSTOTAL POPULATION10Copyright © 2018 The Nielsen Company (US), LLC.MILLENNIALS ARE DRIVING THE GROWTH OF ONLINE SHOPPINGMillennials are driving much of the growth in online shopping, with 61% saying they buy FMCG products online. As they enter adulthood and become parents, Millennials buy more household items, baby care and meal kits than the norm. Across generations, all consumers prefer to receive the items they buy online directly at their homes instead of picking them up in store or curbside. In terms of online shopping preferences, however, Millennials are more likely to consider an e-tailer if it offers a subscription service. In fact, three out of the five categories that Millennials purchase online are subscription based.MILLENNIAL GENERATION X BABY BOOMERS GREATEST GENDiapers Vitamins etc. Vitamins etc. Vitamins etc.Vitamins etc. Chips Pet Treats Pet TreatsToilet Paper Toilet Paper Pet Supplies Toilet PaperChips Cosmetics Dog Food (dry) OTC RemediesWipes Shampoo etc. Toilet Paper Dog Food (dry)MILLENNIAL GENERATION X BABY BOOMERS GREATEST GENDiapers Vitamins etc. Pet Treats Prescription RxDog Food (dry) Mens Razors Dog Food (dry) Pet TreatsWipes Meal Kits Prescription Rx Vitamins etc.Meal Kits Dog Food (dry) Vitamins etc. Dog Food (dry)Toilet Paper Pet Treats Mens Razors Dog Food (wet)TOP ONLINE CATEGORIES PURCHASED BY GENERATION ON LAST ORDERPERCENT WHO PURCHASED FMCG PRODUCTS ONLINE IN THE PAST THREE MONTHSTOP ONLINE CATEGORIES PURCHASED BY GENERATION - SUBSCRIPTIONSource: Nielsen Homescan Panel; Total U.S., 52 weeks ended 05/13/2017.Source: Nielsen Digital Shopping Fundamentals, 2017 FMCG Edition - Nielsen Homescan Panel; Total U.S., 52 weeks ended 05/13/2017. 61%55%44%39%MILLENNIALS GEN X BABY BOOMERS GREATEST GENERATION