Gen Z, Young Millennials Challenge Traditional Concepts of Brand Loyalty

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Gen Z and young millennials aged 18-29 have a much greater price sensitivity and lower brand loyalty than previous generations, presenting a challenge for brands aiming to sync with this demographic, according a to survey by Swift Prepaid Solutions.

The survey found 60% of those in the Gen Z and young millennial age groups are neutral when choosing between name brands and private labels.

Over 80% of those surveyed in these groups said price is the most critical factor when making a purchase, and half believe name brands are much more expensive than private label. Sixty-seven percent who choose name brands do so to get assurance the product will be up to their standards.

The number one way this demographic learns about brands is through friends and family, outpacing Google, social media, Amazon, retail stores and television (in that order), the survey found.

Sixty-eight percent of those surveyed in this are willing to refer name brands to a friend, while 41% would do so for an incentive. Eighty-three percent are more loyal to brands that offer value-added rewards and surprises, and about the same (82%) are willing to spend earned rewards on special offers.

As more members of Gen Z and young millennials form a neutral outlook on name brands compared to private brands, cost and recommendations from friends and family increasingly influence purchase decisions, the survey found.

It also found that as more of them choose private labels, promotion pricing, recommendations from friends and family and loyalty bonus rewards are the key influencers. Prepaid virtual and physical cards, which they are twice as likely to prefer over checks and PayPal, work best for incentives.

“Brands today are at a crossroad with the shifting loyalty of Gen 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 experiment with new strategies, prepaid cards and referral programs will become more crucial to recruit, retail and grow their customer base by appealing to buyer’s wallets and communities.”

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