What Millennials Want
Retailers tend to treat millennial shoppers with a kind of anthropological obsession. This generation, which at first glance, seems to defy conventional consumerist behavior, is varyingly described as whimsical, idealist, flashy, hip and self-obsessed. It seems like part of the reason for this “exotic” characterization is that the rise of millennials has also coincided with big, unsettling events in retail: countless long-established brands have died, companies like Amazon.com are annihilating the retail playbook via technology, and markets have become international. To retailers accustomed to the stable, traditional ways of doing business, it’s easy for millennials to appear as an unpredictable force of chaos.
Surviving this century’s retail revolution requires understanding millennials. However, in their efforts to create flashy mobile apps, social media ads and commercials, have retailers actually gotten to the root of the issue?
A recent survey by YouGov and GT Nexus indicates otherwise. The survey set out to investigate one major hypothesis about millennial shoppers — their lack of brand loyalty — and uncover the causes behind it. Retailers have felt that brand loyalty has all but eroded in the era of e-commerce. The YouGov and GT Nexus survey confirmed this; surveying 18-34 year olds, it uncovered that 67 percent of U.S. millennials admit to having switched one of their favorite brands in the last 12 months. The reason behind this disloyalty, however, turned out to be not so obvious.
It’s tempting to think that technology is the sole force behind brand disloyalty. Comparison shopping today literally sits at consumers’ fingertips. With minimal effort, they can discover lower prices or better products elsewhere. But just because customers can shop elsewhere, does that automatically mean they will?
Here’s where the truly counterintuitive part about millennials’ mind-sets comes in. Millennials are often perceived as digital natives. According to the study, however, a very small percentage of millennials cited 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) as reasons for turning against their favorite brands.
Instead, all the major disloyalty factors identified fell into the “behind the scenes” domains of operations, logistics and supply chain management.
Quality and Ideology
U.S. millennials put a premium on product quality and availability. Respondents cited 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.
Millennials also care about how their favorite brands are made. Thirty-two percent of respondents stated they would turn on a brand if it didn’t treat or pay its workers fairly. Twenty-seven percent said they would switch brands if the products made by a company weren’t environmentally friendly.
Information Changes Everything
The big takeaway for retailers is that in reaching millennial customers, consumer-facing technology isn’t the ends, it’s just the means. A generation raised with the ubiquity of information doesn’t just demand digital nativism from their brands; it expects those brands to also respect the fact that information is widely available, and that shoppers will use that information to judge, punish and reward brands. Authenticity, therefore, becomes paramount.
Millennials have become adept at seeing through the guises brands have historically employed to boost their public images. Information about supply chain practices, worker conditions, environmental impact and executive connections to politics are accessible to an extent they never were, historically. Failing to be aware of this, or acting in denial of this, is an easy way for retailers to lose millennial business.
Suhas Sreedhar is the manager of supply chain and technology thought leadership at GT Nexus, a cloud-based global supply chain management platform.