Younger consumers are challenging brand loyalty ideas
Younger means more price sensitive, less brand-loyal
As Generation Z and young millennials exhibit much greater price sensitivity and much lower brand loyalty than prior generations, there is a challenge for name brands looking to grow loyalty with this group, according to the Swift Prepaid Solutions Survey.
As more young adults choose private label brands over name brands, promotion pricing, recommendations from friends and family and loyalty bonus rewards are influencing more purchase decisions. Prepaid virtual and physical cards, which Generation Z and young millennials are twice as likely to prefer over checks and PayPal, work best for these incentives.
Among the highlights of the survey, the company found that:
- 60% of Generation Z and young millennials are neutral when choosing between name brands and private labels.
- Over 80% indicate price is the most critical factor when making a purchase; and 50% believe name brands are much more expensive than private label brands.
- 67% of those who regularly choose name brands, purchase them when they want assurance the product will be up to their standards.
The number one way they learn about brands is from friends and family, outpacing Google, social media, Amazon, retail stores and television in order:
- 68% are willing to refer name brands to a friend and 41% would do so for an incentive.
- 83% are more loyal to brands that offer value-added rewards and surprises.
- 82% are willing to spend earned rewards on special offers delivered with the reward.
"Brands are at a crossroad with the shifting loyalty of Generation Z and young millennials, requiring a fresh approach to engaging this next generation of buyers," said Rodney Mason, Swift's Chief Revenue Officer. "As brands develop new strategies, incentives and referral programs using prepaid cards will become more crucial to recruit, retain and grow their customer base by appealing to buyer's wallets and communities."
Sources: Swift Prepaid Solutions / The Marketing Factbook.
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