The Fickleness of Youth: Are Millennials Loyal?

Posted by Jeff Swystun

Sep 17, 2014 2:35:00 PM

While in high school my stepdaughter appeared stamped from a mold. She and her fellow clones would wear reassuring uniforms commonly accepted in the suburbs. American Eagle, Hollister, Lululemon, and Abercrombie & Fitch among others were accepted suppliers within her peer group. These girls also adopted the same hairstyle so when clustered together I would often fail the stepfather test of locating her in a crowd (she often used that to her advantage).

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Now just a few years later and she shops with a different goal. Now the quest is to find a style uniquely hers. This involves a great deal of mixing and matching between styles and brands, along with vintage items thrown in for real differentiation. The irony is in striving for that difference, she finds herself emulating the entire Millennial Generation who pride themselves on their individuality and shop accordingly. In the United States that group numbers upwards of 80 million Americans born between 1977 and 2000.

Nielsen produces an annual study on trust that has charted its relative decline in longstanding institutions. Organized religion, government along with traditional advertising are no longer held in high regard and continue to slide in esteem. Pew Research has found that Millennials are much less likely to identify with a political party or to formally affiliate with a religion. Researchers cite this as a clear indicator of an independent streak that marketers and brands cannot ignore. 

Millennial Spending Power

Millennials represent a staggering $600 billion in spend annually in the United States, according to Accenture. This is expected to grow to $1.4 trillion in 2020. Amazingly, Millennial men spend more than twice as much on apparel as non-millennial men and millennial women outspend by a third. Clothing retailers have felt the trend towards highly individualized style acutely.

Loyalty programs are an important means through which brands are creating loyalty with Millennials, especially for brands in CPG, telecommunications, and entertainment. In our 2014 Loyalty Report we found that Millennials are the customer segment most willing to modify how they shop, in order to maximize the benefits they get from loyalty programs. 60% are willing to switch the brands they buy, if it means getting more benefits. And one-third of Millennials have confessed that they’ve bought something they didn’t need or want in order to earn points or maintain status benefits. In many ways, Millennials are the most loyal customers – provided the brand knows how to connect with them in ways they care about. They are very clear that fair value trade-offs must be two way and beneficial to both brands and consumers. In fact, 46% of Millennials surveyed wouldn’t be loyal to a brand that doesn’t have a strong loyalty program.

Millennial Brand Evolution 

After experiencing ten straight quarters of declines in same-store sales, Abercrombie & Fitch knew they had to do something. The response was to shrink their famous logo (something that would have been sacrilege just a few years earlier) while increasing the assortment of apparel and turning over styles more often. Michael Scheiner, an Abercrombie spokesman said of their customers, “They no longer want to be a walking billboard of a brand. Individualism is important to them, having their own sense of style." 

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Gap Inc. reacted creatively to this evolution with an advertising campaign with the clever tag line, “dress normal.” It does not imply, dress the same, and is all about creating one’s own style. The campaign uses taglines such as “dress like no one’s watching” and “simple clothes for you to complicate.” Gap has said the ad campaign is aimed at customers who want to dress for themselves.

Millennials and Brand Loyalty

It should come as no surprise that Millennials are using technology to find their style. The Intelligence Group discovered that more than 70% of Millennials research options online before visiting a store. For their part, malls and stores are making the customer experience more engaging and dynamic with interactive technologies. It is becoming clear that a rack of clothes no longer does the job. While that investment may seem strange given the rise of online shopping, retailers know that Millennials still complete over 75% of their purchases in a physical store.

This mix and match style does not have to come at the expense of loyalty to a brand. Brands exist as sorting devices allowing people to make quicker and more informed choices. However, it does put a new onus on brands not to be complacent and to know their customers as intimately as possible. ‎People of all ages want shopping experiences to deliver value, provide comfort in the decision to purchase, prove to be more dependable and reliable, and that are rewarding for all involved. Style may be subjective and fickle but relationships built on trust and value will endure.

 

Jeff Swystun
Chief Marketing Officer

Topics: Brand Loyalty

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