Millennials are fast becoming the dominant economic force – and in many categories they are the only force to be reckoned with by brands. As marketers, we adapt or our brands fail. The old order of the brand’s relationship to its intended customer is morphing right in front of us. The new order is interesting to say the least.
For example, are brands now competing with retailers for customer loyalty? The trends we are seeing seem to suggest that. In a research brief published by The Center for Media Research, writer Jack Loechner cites compelling findings in the “Global Brand Shopper Survey” by Lauren Freedman. The headline says it all: “55% of shoppers pick brand manufacturers over retailers.”
Among the various stats, consider these:
- 59% research their purchases on the manufacturer’s website and “usually make their purchase there as well.”
- 37% expect “a more engaging experience” on the manufacturer’s website.
- Almost 1/3 rely on virtual reality tools to help them with buying decisions.
- 45% of Millennials expect more from a manufacturer’s website “where they can get a strong sense of the brand.”
- 56% of Millennials connect with brands weekly on social media and use brand content in their own social media feeds.
Contrary to a once popular notion, it would seem brand preference isn’t getting weaker with the next generation. It’s getting stronger. Technology when it comes to shopping is one key. Relevance when it comes to buying is another.
In a Pew Research Center report “Millennials. A Portrait of Generation Next” published in 2010, Millennials themselves believed that their generation was unique, with the top reason given as “Technology Use.” And technology has directly connected Millennials to brands like never before.
Obviously, the Pew report was very predictive, but what got marketers to this point?
For as long as we can remember, retailers and brands have enjoyed a symbiotic relationship, but that has slowly become increasingly strained. A generation ago, the television medium cemented the dominance of “the brand” as the holy grail of retail. If it wasn’t advertised in the “Mad Men” era, was it really a brand? Most would argue no. Baby Boomers coming of age propelled a spate of brands, from P&G’s Tide and Ivory Soap, to GM’s (at the time) Frigidaire Appliances, to RCA’s ColorTrak TV’s and countless others. They owed much of their growth to increasing earning power and relative prosperity of Boomers and the age of television.
But media consumption habits became fragmented. Category killing retail chains emerged wielding their own proprietary brands. Home shopping networks became the rage and direct response brands grew as cable TV grew. All the while, the “national advertised brand” designation became synonymous with needless, even irresponsible consumer excess. Many brands struggled. Some became extinct.
In the last decade, we have witnessed the proverbial tectonic shift in the retail landscape, as Boomers hand the purse strings over to Millennials, as digital technology permeates modern culture, as smart phones become the ubiquitous standard, and as social media (and with it online reviews) form opinions and preferences the way an agency network media buy never could. In fact, in many ways today’s retail environment resembles the marketplace about 20 years ago about as much as a rain forest resembles the lunar surface.
Retail outlets like Macy’s, JCPenny and Sears, favorites during the Boomer spending era, are shrinking in number. Border’s Bookstores are gone. Dick’s Sporting Goods is feeling the heat from online sales. Even successful brands like Starbucks have felt the pinch. It recently announced the closure of all its 379 Teavana stores, citing shrinking mall traffic as the cause. Amazon is taking on Walmart, the country’s largest food retailer, by its acquisition of Whole Foods and moving toward a home delivery service. And the evolution continues.
Many brands are aware of their increasing connectivity to their customer through online media, yet walk a tightrope lest risking the ire of their retail channel partners. Retailers grow suspicious of manufacturers, fearful that brands may circumvent them for an ultimate e-commerce solution where touching and experiencing the brand’s product may not be a prerequisite to purchase for most.
But while meeting and engaging successfully with the Millennial shopper online is important for brands, as Best Buy seems to have figured out, it is by no means a guarantee for survival. Brands must stay relevant, and quickly evolve to changing preferences and tastes.
Recently in beverages, Millennials are having their say with respect to some of the marketplace’s most revered brands. For example, Bud Light, America’s best selling beer, is losing share in the US, as popularity of craft beers increases, according to industry observers. And Diet Coke and Diet Pepsi are down 4.3% and 9.2% in market share over increasing concerns about artificial sweeteners. To be sure, these brands have robust online and social marketing skills, but product concepts that are out-of-step will still stumble. Just as Millennials have been weaned on technology, they have also grown up in an increasingly LOHAS (Lifestyle of Health And Sustainability) culture that regards with suspicion anything corporate or artificial.
The irony of all of this change is that brand marketers must continue to apply strategic discipline now more than ever. Even as generations, and with them technology, media habits, tastes, beliefs, priorities and preferences change, marketers must remain both nimble and bold to reach and persuade their respective customers.
The more things change, the more they remain the same could never be truer.
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