Research shows largely no difference in brand loyalty for Millennials and Gen X
The ‘illusory truth effect’ is the idea that if you repeat something often enough, people start to believe it’s true. We see this phenomenon amongst a lot of trade press these days, especially when it comes to stories about Millennials, where there are frequent claims that this generation is fickle, and lack any sort of brand loyalty.
Such an example surfaced recently in this article for a report on Millennials using Nielsen data, we were told that Millennials “are less likely to stay loyal to a specific media the way other generations are.” While I am certain that the data is correct, I believe the reason they are less loyal has almost nothing to do with their age, and almost everything to do with their category usage. Let me explain …
It’s much easier to be loyal to one brand, if you only buy once
Research has consistently shown that 100% loyal buyers are typically light buyers of the category.
Data for many categories, even those that are frequently purchased, show that a light category buyer may only purchase once during a measurement period. As Professor Jenni Romaniuk, author of How Brands Grow 2, explains, “highly loyals (giving 100% purchases to one brand) tend to be light category buyers, as if you only buy the category once, then you are – by default – 100% loyal to that brand!” By contrast, as a buyer makes subsequent category purchases, there is less opportunities to be loyal, as there are more purchase situations where they might buy an alternative brand.
That’s good in theory – but where is your evidence?
We recently collected data on four very different product categories – automotive, fashion accessories, magazines and soft drinks. For each product category we asked respondents to provide the number of times they had purchased from the category for a relevant period (n.b. this period varied for each category). We then asked them to select all brands that they purchased, from a list of leading brands, during the period.
The results below show the average number of brands bought for each category by Millennials (18 – 34) and Gen X (35 – 54) is largely similar – it is slightly higher among Millennials for fashion accessories, and slightly lower for soft drinks.
However, a much bigger difference appears if we split by purchase weight. Here we see that Heavier Category Users consistently buy from more brands (are less loyal) than Lighter Category Users for all product categories we tested.
And when it comes to fashion accessories, the reason we see less loyalty (higher average number of brands bought) for Millennials is due to the fact that they had more Heavier Category Buyers. Specifically, Millennials (21%) had more than twice the proportion of heavier buyers for fashion accessories during the period, when compared to Gen X (9%)*.
So why do Millennials appear less loyal for digital music services?
The answer is simple – Millennials are heavier users of the US digital music services category. Indeed, the article also told us that, they “are consuming an enormous amount of content every week”, and data from our own Australian study similarly showed that more Millennials used digital music services daily, compared to Gen X (+15%)**.
And so, much like our fashion accessories example, it is their purchase weight, rather than age, which is driving down their loyalty. Let’s hope we can put this Millennial myth behind us, and focus on winning more category buyers overall, as that will drive the greatest opportunity for growth.
Slides are available for download here.
* SOURCE : Marketing Scientist : Online Video Study (July 2017) : % of each generation buying ‘two or more fashion accessories in a three month period’.
** SOURCE : Marketing Scientist : Digital Habits by Device (July 2017) : % difference in Millennials vs. Generation X who ‘Listened to music via a streaming service (e.g. Spotify or Pandora)’ in the past day.