Retailers and brands have spent years chasing the elusive Millennial. They've poured resources into research, marketing, technology and flashy front-end assets. This generation of tech savvy, demanding consumers are perceived as non-loyal customers, heavily influenced and attracted to the digital flash and sizzle. Millennials have grown up in a world driven by mobile, apps, social media and an "always-on" attitude. Brands assumed that in order to keep this generation engaged, they needed to act brash, be loud, and constantly offer shiny "toys" to cut through the noise.
A new study conducted in late in 2016, however, paints a very different picture: one of a consumer conscious of what goes on behind the scenes of a brand, in operations, in production and in the supply chain. According to this survey, retailers and brands would be better served focusing on these areas of business to win the Millennial crowd. We partnered with survey provider YouGov to poll Millennials in the United States, UK, Germany and France about factors that impact brand loyalty — specifically, what causes them to shift from their favorite brands. Here's what we found:
According to the survey, 67 percent of U.S. Millennials admit to having switched from one of their favorite brands in the last 12 months. The startling findings, however, are the factors that spur Millennials to turn on their favorite brands: product quality, availability issues, working conditions and sustainability. They are aware of the importance of how the product is produced and brought to market,and are not just concerned with the brand being "cool."
All of the major disloyalty factors identified fall into the "behind-the-scenes" domains of operations, logistics and supply chain management. Contrary to popular belief, consumer-facing marketing factors, such as a brand's social media presence, mobile apps, or a cool website, don't have a big impact on Millennials' brand loyalty.
Millennials in the United States put a premium on product quality and availability. Respondents cite quality problems (49 percent) and issues with product availability (44 percent) as the two biggest reasons for switching from one brand to another. Experiences are a large part of retail today, but at the end of day it still comes down to the inventory: being of good quality and being available.
Millennials in the United States care about how their favorite brands are made. Thirty-two percent of respondents would turn on a brand if it doesn't treat or pay its workers fairly. Twenty-seven percent would switch brands if the product isn't environmentally friendly. Being environmentally conscious is no longer a "nice to have" for brands, but in some cases is influencing how consumers spend their money.
Millennials are often perceived as digital natives. But according to the study, social media presence, mobile apps, and cool websites have comparatively little impact on their brand loyalty. The lack of a strong social media presence (9 percent), the lack of a mobile app (7 percent) or the lack of a cool website (7 percent) don't compel Millennials to turn on their favorite brands. Maybe being digital natives gives this cohort a greater ability to cut through the fog that digital media can at times create.
When we think of Millennials we tend think of their attention being drawn to all things cool, edgy and flashy. These survey results depict a very different generation of consumers. This survey describes a demographic that's more concerned with what goes on behind the scenes of a brand and how they produce goods or operate, as opposed to being drawn to social media, apps and websites. A demographic characterized by consumers who are conscious of their environment and society and do not allow themselves to be distracted by marketing spin.
There's been so much written about demanding Millennials, omnichannel retail, and copious amounts of money spent on front-end technology designed to lure in this younger demographic. It turns out that retailers and brands would be better served rethinking their strategy to connect with Millennials. The ability to produce and deliver quality product responsibly is at the core of their brand loyalty decisions. These consumers are being won and lost in operations and supply chain.
At the end of the day, Millennials, much like most consumers, want quality products and want them where and when it is most convenient to their needs. Understanding and knowing how those products are being created and brought to market is becoming as much a part of the product as feature functions. Brands beware: your Millennial shopper is savvy and conscious, so treat her accordingly.
Guy Courtin is vice president, industry & solution strategy, retail and fashion at Infor.