Millennial brand loyalty comes into question

Discussion
Photo: RetailWire
Nov 26, 2018
Jasmine Glasheen

In 2015, Inc. Magazine called Millennials “the most brand-loyal generation.” Public perception of the generation has changed, however. Millennials are now considered “the least” loyal customer demographic, according to research, to the great horror of the retailers who need to win the loyalty of Millennial shoppers to grow their businesses.   

A recent study by Daymon Worldwide found that just 29 percent of Millennials usually purchase from the same brand, compared to 35 percent of Gen X-ers. In fact, Gen X is now being held up as the most brand-loyal generation of consumers.

Not all studies came to the same conclusion. In a recent Valassis survey, only 34 percent of respondents said that they “had one preferred retailer for each purchase category,” but the percentage of customers with preferred brands was much higher among Millennials (47 percent), and Millennial parents (57 percent).

The idea of Millennials as fickle customers actually doesn’t extend to Millennial parents at all, which is ironic considering that over 40 percent of Millennials are indeed parents. The National Retail Federation reports that Millennial parents are more brand loyal than parents from any other generation; their purchasing behaviors, however, are slightly different. Millennial parents were found to eschew traditional Millennial brands in favor of brands that focus more on price, rather than on quality. 

Forbes reports, “Millennial parents were found to index below their non-parent generational counterparts at Millennial-favored stores like H&M, J. Crew, Sephora and the Apple Store. Additionally, Millennial parents were found to index higher at Dollar General, Home Depot and Kohl’s, just to name a few.”

Millennial parents do, however, share some buying behaviors with their childless counterparts: quality, price and customer service are priorities across the board, and consistently delivering on these can help retailers win lasting loyalty from this generation of consumers.

“To keep parents of any generation happy, brands and retailers must deliver on both price and quality,” Katherine Cullen, director of retail and consumer insights for NRF, told MediaPost. “But Millennials are very concerned about good customer service and are twice as likely to back out of a purchase for lack of it. For Millennials, service ranks ahead of convenience, selection and loyalty programs.”

DISCUSSION QUESTIONS: In your experience are Millennials a particularly brand-loyal generation? What do you see as the keys for retailers seeking to attract and retain Millennial customers?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"There are hundreds of Millennial sub-segments. Retailers that try to group them all together as one demographic do so at their peril."
"The whole premise of “consumer loyalty” is out of whack with today’s retailing reality. The unstated assumption is that a retailer or a brand can “own” a consumer..."
"Millennials are very loyal, in my humble opinion, until something better or new comes along (which always does)."

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17 Comments on "Millennial brand loyalty comes into question"


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Art Suriano
BrainTrust

So we’re saying that Millennials are interested in price, quality, and service. Gee … how is that different from any other generation? I think sometimes we get so caught up on data thinking it’s going to solve all our problems when in reality we’re better off with common sense. As Millennials got into the working world responsible for paying their bills, they became more money conscious, so the price for them as with any other generation has become an essential factor. Moreover, as they became aware of “good” products versus “bad” products, they’ve learned to pay attention to quality. Lastly, who wants to buy an item from someone who hasn’t treated them nicely? So just said, Millennials have proven they have grown up and are addressing their needs as other any other generation has with their focus on price, quality, and service. Do we need to spend much money on data to figure that out?

Adrian Weidmann
BrainTrust

As the parent of two Millennials, I observe their shopping patterns and behaviors. There is some brand loyalty but one aspect of online shopping that remains very consistent is free shipping. Free shipping is very often the deciding factor on a purchase. They’ll search for the product where free shipping (and returns) is offered despite the brand. In many cases they’ll find a preferred (and cheaper) alternative during their search.

Charles Dimov
BrainTrust

More important than Millennials vs. Gen X vs. Baby Boomers is the stage of life that consumers are in. To Jasmine’s point, if the service offering is right, and the price to quality ratio is reasonable, then Millennials are loyal to a brand.

Consistency is one key for retailers. Millennials become loyal when their repeat visits (online or physical) are equally good. For the parental Millennials, it is about efficiency, speed, convenience and ease. Give them the full choices of omnichannel retailing (delivery, in-store pickup, mobile or online purchasing, BORIS … ) and it will serve retailers well.

Zel Bianco
BrainTrust

As stated, service and quality of product and, yes, price — especially for those that are now parents. Prior to becoming a parent, Millennials are more about what’s in it for them, (big generalization) but when kids arrive, they realize that they need to be a little more frugal to make ends meet so they look much more closely at price. As to loyalty, Millennials are very loyal, in my humble opinion, until something better or new comes along (which always does).

Ron Margulis
BrainTrust

As has been widely opined on this site and others, there are hundreds of Millennial sub-segments. Retailers that try to group them all together as one demographic do so at their peril. That written, there are several Millennial sub-segments that are very brand-loyal, particularly those in urban areas. Age also plays a dramatic role, with younger Millennials more sensitive to price than their older, more established cohorts. And gender is critical, with Millennial men more interested in brands when it comes to sportswear and electronics, and Millennial women more interested in brands when it comes to shoes and makeup. Neither are all that brand conscious when it comes to food, however.

Ray Riley
BrainTrust

People in this generation are used to having access to information, reviews, and changes at their finger tips. Therefore when they observe a trending pizza bar, cocktail lounge, or cool brand/store via technology, most will eventually gravitate towards it and form some type of a bond. More mature generations, while not unfamiliar, are not natively-inclined to this type of information “push/pull” mechanism. I find general degrees of loyalty to be linked among all generations.

Michael La Kier
BrainTrust

The concept of brand loyalty is one sided and comes from a myopic internal view — people simply don’t associate “loyalty” to brands. There are certainly brands shoppers like and prefer, but the idea of a brand saying “thank you for your loyalty” always struck me as odd (and, as background, I led the My Coke Rewards loyalty program to over 22,000,000 members). Millennials are more fluid in their purchases and have more information at their finger tips. They have quick access to sales, trends and information; they take all of this into account when making purchases. The real key for brands is ensuring they have a relationship with Millennials (and all generations) to ensure consideration and purchase.

Min-Jee Hwang
BrainTrust

Analyzing retail data by generation is always a challenge, as there are so many individual people with their own lifestyles, backgrounds, incomes, etc. In fact, we’re on the cusp of Gen Z becoming a major factor in consumer spending. With that said, retailers should focus on quality, service, and especially price to attract shoppers of any generation, including Millennials.

Brandon Rael
BrainTrust

In an age where brands are being diluted on giant e-commerce platforms, the concept of brands has taken a hit. However, both the Millennial and Gen Z generations enjoy shopping in the store and seeking an experience that extends beyond the brands themselves. These groups, in particular, are also attracted to brands that have a sense of purpose, a social stance, are environmentally conscious, yet most of all offer an outstanding customer experience across all possible shopping channels.

Prior generations may have made their brand choices based simply on price and quality, yet today’s customers want to connect with a brand that “gets them,” knows what they need, and just naturally fits with their lifestyle.

Retailers who get it right know that the physical retail showroom is evolving into the theater that is our lives. Build it and they will come. Millennial customers are no different than all generations, as they will stay loyal to brands that meet their needs.

Evan Snively
BrainTrust
Wait I know, I know! It’s a question about Millennials so the answer must be “experiences” right? Millennials are fairly brand loyalty, and a big part of that comes from the abundance of opportunities to outwardly identify with brands and their content via social media. Whenever a person commits to endorsing a brand in a public forum, it strengthens the resolve of their own beliefs. It also puts up a bit of a mental barrier to disassociating because they actually have to admit they are wrong or were a phony if they switched (and no one likes to admit they are wrong) so people tend to double down on their commitment. Some additional data from a market study Maritz performed in conjunction with The Wise Marketer last year revealed that in the short term, Millennials tend to disengage early on at a higher rate, but for those who make it beyond the initial engagement cliff, their brand loyalty is deeper and more resolute in comparison to other generations. Two key ingredients to fostering this deeper… Read more »
Mohamed Amer
BrainTrust

Our approach to prioritize any generation by some key attributes that keep their cohorts coming back to spend more money is locked into a long outdated mass marketing model. Just because you can measure it, doesn’t continue to make it valid.

The whole premise of “consumer loyalty” is out of whack with today’s retailing reality. The unstated assumption is that a retailer or a brand can “own” a consumer through marketing and advertising. Today’s consumer choices are too many, the competitive landscape is too intense, and the consumer purchasing power through technology breakthroughs require us to jettison the old notions of consumer loyalty to a brand. What’s needed is the reverse approach of building brand and store loyalty to individual consumers, to give them compelling reasons to spend their money in your store and on your brands.

A shift in mindset is a necessary first step towards new set of behaviors. The accelerating adoption of online digital retailing will hasten the strategic and organizational changes required to address retail’s new reality.

Richard J. George, Ph.D.
BrainTrust

As I have stated before in this forum, the concept of customers being loyal to a brand or retailer makes no sense. People can be loyal to their family, faith, country, Alma Mater, etc. but there is no need to be loyal to consumer packaged goods or retailers. Instead, brands and retailers need to be loyal to their customers, namely, by delivering on their promises. Continuity of purchases, not loyalty, is earned by offering a revised version of quality. How? Make sure the benefits provided to your customers are greater than the burdens your customers must endure in doing business with you.

Georganne Bender
BrainTrust

I’m sticking with my theory that the only thing that truly separates the generations is the technology available while growing up; after we hit our 30s we tend to assimilate. Every customer wants price, value, convenience and selection. Why should Millennials shoppers be any different?

Ralph Jacobson
BrainTrust

I see some traditionally strong brands, like one or two in electronics losing their luster with many Millennials, but also other generations. I also see many Millennials becoming very frugal and jumping from brand to brand to secure the best value at the moment. But again, other generations are following this trend. And all Millennials are not alike. Be careful how you target your marketing.

Jasmine Glasheen
Staff

Millennials also seek out sustainable brands, or brands with ethical corporate practices. While it’s true that the price of buying from ethically-run companies can be prohibitive for some millennial consumers, the intent to buy from these brands is there and companies that offer a feel-good buying experience at an accessible price (and yes, with decent customer service, too) will always be in the lead. In fact, sustainability will become a necessity for companies as Gen Z comes into their own.

Patricia Vekich Waldron
BrainTrust

Consumers universally demand value (price/quality), and generational brand preferences shift as individuals go through life stages. Retailers and brands should make sure they have the basics right and then target the myriad sub-segments.

Joel Rubinson
BrainTrust

I see these articles from time to time … new consumers have no brand loyalty … blah, blah. Such articles usually signal a lack of understanding about the marketing advantages that brand preference creates.

Brand loyalty does not mean exclusive loyalty … that would be a red herring definition. Popai and other shopper studies have documented that half or more of shoppers are actively considering multiple brands at the point of purchase.

Brand knowledge gives us the simplifying heuristics we need to navigate a world of otherwise overwhelming choices. Without brand knowledge, our ears would bleed!

Young consumers are just as brand focused as anyone else. Look in the right places. Look at beauty, apparel, social media, and sports fandom. I see no evidence that young Red Sox fans are more tolerant of the Yankees and vice-versa.

wpDiscuz
Braintrust
"There are hundreds of Millennial sub-segments. Retailers that try to group them all together as one demographic do so at their peril."
"The whole premise of “consumer loyalty” is out of whack with today’s retailing reality. The unstated assumption is that a retailer or a brand can “own” a consumer..."
"Millennials are very loyal, in my humble opinion, until something better or new comes along (which always does)."

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