There is a perception that Millennials aren’t brand loyal. A new survey conducted globally by supply chain management firm GT Nexus with research company YouGov seemingly confirm this lack of brand loyalty among 18 to 34 year olds. The survey’s results show that 61 percent of all respondents don’t consider themselves to be brand loyal, and in the U.S. and France, the numbers were even higher—67 percent and 72 percent respectively.
What does come as a surprise, though, are the factors which cause Millennials to switch brands. People often associate Millennials with “cool, edgy and flashy” things, a GT Nexus blog notes. Despite this stereotype, however, all the major disloyalty factors Millennials identified in the survey fall into the “behind-the-scenes” domains of operations, logistics and supply chain management, GT Nexus reports. Contrary to popular belief, consumer-facing marketing factors, such as a brand’s social media presence or mobile apps don’t seem to have a big impact on Millennials’ brand loyalty, the blog explains.
“It’s no surprise to see a high percent of this demographic shifting brand loyalty frequently,” says Guy Courtin, vice president of Industry and Solutions Strategy at GT Nexus. “But when we think of Millennials, we think of their attention being drawn to flash and sizzle such as apps and a website. These survey results paint a different picture. They describe a demographic that’s more concerned with what goes on behind-the-scenes of a brand: how they produce goods or operate.”
U.S. Millennials in particular place a premium on product quality and availability. Survey respondents cite quality problems (49 percent) and issues with product availability (44 percent) as the two biggest reasons for switching from one of their favorite brands to another.
“A number of recent high-profile product recalls have shown us how quickly quality issues can damage the reputation of a brand, but it’s alarming to see how readily Millennials turn on their favorite brands if the product isn’t on the shelf or available for delivery,” Courtin says. “This shows that the brand loyalty of Millennials lies heavily on the shoulders of the logistics and supply chain departments.”
U.S. Millennials also care about the ethical aspects of how their favorite brands are produced. For example, 32 percent of respondents said they would turn on a brand if it doesn’t treat or pay its workers fairly, and 27 percent said they would switch brands if the product isn’t environmentally friendly.
“Millennials are sending a very clear message to their favorite brands. If you don’t respect the workers creating your goods—either inside your organization or in your supply chains—they will turn on you. Same goes for the environment,” Courtin says. “Manufacturers and retailers should heed this warning and strive for fair, transparent and environmentally friendly supply chains. The apparel and footwear industry has met some challenges in this area and should be extra vigilant because it also happens to be a category in which Millennials are most likely to switch their favorite brands—47 percent according to the survey.”
Finally, Millennials are often perceived as digitally focused, but, according to the study, social media presence, mobile apps and websites have comparatively little impact on Millennials’ brand loyalty. The lack of a strong social media presence was cited by nine percent of the respondents, a lack of a mobile app was only cited by seven percent of the respondents, and the lack of a cool website was only listed by seven percent of the respondents as reasons for switching brands.
“In recent years, manufacturers and retailers have paid a lot of attention to consumer-facing marketing factors such as websites, apps and social media to attract and keep Millennials loyal to their brands,” says Courtin. “This research instead suggests that actions which occur in operations, production and supply chain—that directly impact product availability, quality, ethics and the environment—are much more important factors when it comes to influencing the brand loyalty of Millennials.”
What are your thoughts on the survey results? Do they mirror what you see?