Researchers working on Student Price Card‘s ongoing “Pulse of the Canadian Student Shopper” study say teens and millennials are less committed to brand names than they were a year-and-a-half ago – more bad news for stressed retailers heading into the sector’s most important quarter.
Mike Farrell, senior vice-president research and strategic insight at Conversion Marketing Communication, said new SPC Card research suggests a majority (65%) of shoppers 14-24 think people place too much importance on brands – an increase of 4 percentage points since 2011. Percentages are also down on several other key respondent groups: those who said they consider what other people think of the brands they wear dropped two points to 39%; those who purchase a brand when it stands for something they believe in dropped two points to 48%; and those who save money to buy a brand rather than a discount product dropped 2 points to 25%.
Farrell said that when combined with his company’s proprietary research and anecdotal evidence from some of SPC’s 1.1 million members, the poll shows a downward trend in student shopper’s attachment to brands. Farrell called it an “inflection point” for millennial culture, and said youth are returning to a culture of individualism and brand-negativity seen in the late 90s.
“We’ve gone from a conservative mindset – very focused on big-name fashion brands like Aeropostale, Abercrombie & Fitch, etc. – to a more visceral throwback to 1997, 1998, with the start of Vice magazine,” he said.
Nicholas Bianchi, SPC vice-president of sales and loyalty marketing, points to the rise in second-market fashions and cheap-chic retailers. “We’re seeing a lesser affinity for brands and a greater affinity for style before brands,” he said. “So although there’s an affinity to shop at H&M, realistically they’re not going to H&M for the specific brand. They’re looking more toward the value, price-point and style before the brand itself.”
The study showed a significant increase in the number of student shoppers who are researching products before they buy them (up eight points to 59%). This increase in competitive awareness among students reflects a trend towards more critical shopping, both culturally and technologically, Bianchi said. Consumers, including students, are being empowered by comparison-shopping platforms, and brands are being forced by new technologies to be more transparent, which is leading young consumers to seek better-value alternatives to big-name brands.
Research released last fall by SPC suggests that while brand loyalty may be down, that hasn’t translated into declining membership in loyalty programs among young shoppers. The majority (76%) of 1,440 student shoppers polled in 2012 were enrolled in at least one loyalty program and about half considered themselves frequent points collectors.
But Bianchi said that’s not a reason to be complacent. He points to the rise of cause marketing as evidence that young consumers’ social values are changing, and that brands will need to adapt or be left behind. Brands and loyalty marketers should take advantage of the direct access to young consumers offered by new mobile and social platforms, to better understand and align with their values.
What these changes in brand loyalty mean, Bianchi said, is that “loyalty marketers have to work harder at creating those intimate relationships with consumers, and understanding the consumer beyond the transactions.”
