Millennials are more likely to switch brands over a company's product quality or supply chains than its marketing or image, according to research.
A survey found quality, ethical or sustainability concerns were much more important in a decision to ditch a favoured brand than its social media presence or a “cool” website or mobile app.
Supply chain management firm GT Nexus conducted the survey of 588 millennials, aged from 18 to 34, in partnership with pollsters YouGov.
Of the 55% of millennials who said they had changed their favourite brand in the last year, 41% cited problems with product quality, and the same percentage cited issues with product availability.
Nearly a third (28%) changed brands because they felt it did not pay or treat its workers fairly, and nearly a quarter (22%) because it was not environmentally friendly.
In contrast, only 5% of millennials surveyed said they left their favourite brand because it had a poor social media presence, 4% because it did not have a mobile app, and 3% because it lacked a cool website.
“I thought that it was a little bit surprising that factors like product quality, availability, working conditions and sustainability were so dominant as compared to the factors that are often associated with millennials,” said Boris Felgendreher, senior director of marketing at GT Nexus.
“It’s not even a grey area, it’s very black and white. It’s a very stark contrast between those [marketing factors] that didn’t seem to play any big role, or not as big a role as you would expect, and the behind the scenes factors that are really driven not by marketing or by sales but are driven by operations and production and logistics and supply chain,” he said.
Felgendreher said brands ignore how savvy millennials are as consumers at their peril.
He said firms can be tempted to over-invest in “front end, glitzy factors” like smartphone apps because that’s where they think millennials, known to lack brand loyalty, can be reached.
“We can see a number of examples where companies have spent hundreds of millions in marketing and advertising and suddenly something happens in the supply chain, a scandal that effects factories in the Far East, or the product can not be delivered in time, or the product explodes on you. Then every dollar you’ve invested in the front end is useless,” he said.
Although the scope of the research does cannot say how millennials judge a company’s ethics, Felgendreher’s hypothesis is that public scandals over supply chain issues have made them more aware and less tolerant of ethical and sustainability factors than older generations.
“For [millennials], it seems like common sense, but to a lot of retailers and people that own brands, in many ways this is an eye opener for them,” he said.
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