Millennial Brand Loyalty: Rewards Over Relationships

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Millennials are redefining the concept of brand loyalty; in their eyes, it has changed dramatically from their parents’ version.

A new MindSwarms study shows that for Millennials, brand loyalty revolves around user-centric transactional benefits that are fleeting and unemotional. Whereas their parent’s loyalty is seen to be a dynamic built on personal and emotional long-lasting relationships.

Millennials say they were hugely impacted early on by online shopping, and have redefined the terms of customer loyalty to be more self-centered. Instead of developing long-lasting personal ties to stores and brands like their parents, Millennials become temporarily loyal to a brand or company as tactical decision based on convenience and rewards offered.

Many explain that most of their shopping interactions are with “faceless” companies online, and that they don’t feel that they know the companies they are buying from. Given that they don’t feel much of an emotional pull to be loyal, it follows that Millennials’ loyalty is easily rescinded in favor of a company with a better rewards offer or more convenient service.

Millennials said their parents’ customer loyalty developed slowly and was relatively stable over time.

Like their parents, Millennials do value positive customer service interactions. But rather than in-store customer service, they are oriented toward online interactions. Millennials appreciate the ability to interact with brands online, easily research products, and get personal assistance when they need it.

For companies looking to win the loyalty of Millennial shoppers, it may be valuable to ask how they can make their shopping experience (either online or in-person) as explicitly rewarding as possible.

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Millennial Brand Loyalty: Rewards Over Relationships

  1. 1. Millennial Brand Loyalty: Rewards over Relationships A top line report on brand loyalty. !Q2 2014 mindswarms
  2. 2. Customer loyalty can have a significant impact on the success of a brand or company. But how do young Americans today perceive their own loyalty? ! !‣ Objective: To understand how the Millennial generation's definition of customer loyalty differs from that of their parents. Research Objective mindswarms
  3. 3. Target Audience ‣ National US sample ‣ 13 states ‣ 22 cities ‣ Ages 18 - 34 ‣ Even male/female ratio ‣ Mix of socio-economic backgrounds & ethnicities mindswarms
  4. 4. Previous generations were loyal based on the personal relationships they established with companies and brands. mindswarms
  5. 5. “My parents always went in to the same grocery store, they got to know some people there. And so their loyalty would be based on that.” ! Roger, 26, Tennessee Loyalty used to be based on personal relationships. mindswarms
  6. 6. “I think that's what the difference is from my parents' generation. They basically stuck with the company through the good, bad, the ugly. […] They would stick to the company that they're loyal to.” ! Chiezika, 30, California Loyalty used to be based on personal relationships. mindswarms
  7. 7. As the defining event of the generation, the rise of the Internet changed everything for Millennials — including shopping strategies. mindswarms
  8. 8. “My definition of customer loyalty is different than my parents because we have the internet to basically get the best deals. If you try hard enough, you can find the best deal out there.” ! Adam, 25, Oregon The Internet changed everything. mindswarms
  9. 9. “In our case, we shop around and a lot of times, most things are bought on the internet. We don't even know who we're buying from.” ! Aimee, 27, Florida The Internet changed everything. mindswarms
  10. 10. “I do a lot of my shopping online, and because of that I'm interacting on a regular basis with companies that have no face, it's not about the relationship I'm forming, it's purely about content, it's purely about the products that I'm receiving.” ! Haley, 22, California The Internet changed everything. mindswarms
  11. 11. While their parents became regulars at local stores, Millennials diversify their shopping and don’t expect to find everything in one location. mindswarms
  12. 12. “In my parents’ generation, they would go to a single store, like Sears for example, and they would stick with that store because they knew they could trust the products. Whereas now there's a lot more competition, so I don't think brand loyalty and customer loyalty are as important.” ! TJ, 25, Kentucky Millennials diversify their shopping. mindswarms
  13. 13. “For my generation I think we always want things tailored to us, so we go to places that have the best prices, or are the most convenient, or tailor items to us - like have the most natural products or whatever we're looking for.” ! Ana, 33, Texas Millennials diversify their shopping. mindswarms
  14. 14. For Millennials, loyalty is transactional: they expect to receive benefits in exchange for their loyalty. mindswarms
  15. 15. “I'm loyal to a company that can make something that I'm happy with, but my loyalty doesn't mean that it spans a long amount a time. It just means that I appreciate the products.” ! Kendall, 20, Washington For Millennials, loyalty is transactional. mindswarms
  16. 16. “Our expectations? We expect to have just as good service - even though we're not as loyal.” ! Aimee, 27, Florida For Millennials, loyalty is transactional. mindswarms
  17. 17. “We look to see what the store can give us in order for us to be loyal to them and I think that our expectations are so different because it's easier for us to find another store that's willing to meet our needs.” ! Alexis, 23, North Carolina For Millennials, loyalty is transactional. mindswarms
  18. 18. “I feel people in my generation tend to focus on places that offer more goods and offer free things or rewards.” ! Zora, 22, Massachusetts For Millennials, loyalty is transactional. mindswarms
  19. 19. “First off, the customer loyalty in my generation really is about quality, how much we pay for things, and not just being loyal for the sake of being loyal.” ! Gabriella, 34, California For Millennials, loyalty is transactional. mindswarms
  20. 20. Conclusions & Implications ‣ Millennial consumers demand more benefits in exchange for their loyalty. Some benefits, like free shipping and returns for products bought online, go a long way in increasing brand loyalty. ‣ Retailer reward programs can win Millennials' loyalty for a short time, or until a competitor offers a better program. mindswarms ‣ Millennials are less swayed than their parents by personal relationships to brands or companies. With a diminished sense of attachment to particular companies, this generation will readily switch brands. mindswarms
  21. 21. ‣ Thanks to online shopping, Millenials are accustomed to having a vast number of options at their fingertips, and they make savvy decisions based on price, quality, and convenience. mindswarms Conclusions & Implications ‣ Online reviews carry tremendous weight. When Millenials are making purchase decisions, they seek out customer reviews. When targeting Millenials, retailers must pay attention to the online conversation about their brand. ‣ Today’s large companies feel too big for Millennials to build relationships with. They are concerned that the level of customer service is diminishing. mindswarms
  22. 22. To watch the video, click here. mindswarms
  23. 23. ‣ MindSwarms gathers video feedback from consumers via smartphone/ tablet (and webcam) all over the world. Fast. ‣ Consumers are screened first, then qualified respondents are invited to record their responses (asynchronously). Consumers are paid for participating. ‣ Responses to the study questions are viewable and shareable online, and can be downloaded in Quicktime format for inclusion in presentations or to create curated videos. ‣ Learn more at MindSwarms.com or blog.mindswarms.com. ‣ Contact sales@mindswarms.com for inquiries. About MindSwarms mindswarms
  24. 24. mindswarms Thank you.
  25. 25. Photo Attribution ! Page 1 CC-licensed Flickr Photo: American Apparel Bag by Ken Hawkins ! Page 2 CC-licensed Flickr Photo: Shop Till You Drop by Rob Holland ! Page 3 CC-licensed Flickr Photo: Re Flect by Adrian Scottow ! Page 4 CC-licensed Flickr Photo: Grocery Window by Ornello Pics ! Page 7 CC-licensed Flickr Photo: Internet Chairs by Mads Bodker ! Page 11 CC-licensed Flickr Photo: Specialty Store in St Augustine, FL by Maryland Route 5 ! Page 14 CC-licensed Flickr Photo: Gift Wrapping by Roberto Verzo mindswarms

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