Millennials, young people aged between 18 and 34, determine their loyalty to a brand in part to how the manufacturer's supply chain is set up. That striking conclusion is drawn by research firm YouGov and GT Nexus. Young consumers place a high value on behind-the-scenes issues such as operations, logistics and supply chain management.
The study shows that 67 per cent of US millennials have turned their back on their favourite brand in the past 12 months due to factors such as product quality, availability issues, working conditions and sustainability. Marketing factors such as posts on social media have little impact on millennials' brand loyalty.
Product quality, availability, labour and sustainability
US millennials value product quality and availability. Respondents cited quality issues (49 per cent) and issues with product availability (44 per cent) as the top two reasons for switching from their favourite brand to another. Guy Courtin, vice president industry & solutions strategy at GT Nexus calls it alarming how easily millennials turn their back on their favourite brand if a product is not on the shelf or available for delivery. "This shows that brand loyalty from millennials is weighing heavily on the shoulders of logistics and supply chain departments," Courtin said.
In addition, American millennials care about how products are made. Thirty-two per cent of respondents turn their back on a brand if it does not treat its employees well. Twenty-seven per cent do so if a product is not environmentally friendly. "Millennials are sending a clear message to their favourite brands: 'If you don't respect the workers who make your products - within your organisation or in your supply chains - we will turn our backs on you'." According to Courtin, the same applies to environmental impact. "Manufacturers and retailers should take this warning to heart and strive for fair, transparent and environmentally friendly supply chains. The apparel and footwear industry has a number of challenges in this area and needs to be extra vigilant. This also happens to be an industry where millennials switch brands easily, forty-seven per cent according to the survey," Courtin said.
Investing in an excellent supply chain
"Companies are investing significantly in technology, but this research raises the question of whether they are doing so in the right things," said Courtin. "The most enterprise systems and investments in supply chain technology are failing miserably when it comes to helping companies in the way they source, make, transport and deliver their products. It is no longer a case of cutting costs. An excellent supply chain is directly related to the health of a brand."
Editorial LogistiekProfs
