Now there are brands and there are cool brands, of course. While research shows young people are suspicious of large traditional brands and corporations, they appear to be more than happy to part with their cash for hipper brands, which are typically more niche, but not necessarily so (look at Apple and Starbucks).
Similarly, there are store brands (Walmart Equate) and there are sexy store brands (Trader Joe’s), so generalizations are difficult…
Younger consumers are also more interested in the story behind brands
However, Millennials “appear to have kind of a love, hate relationship with private labels”, claims Datamonitor product launch analytics director Tom Vierhile.
In general, younger people are “buying more private-labels because they cost less”, he observes, with 50.6% of consumers aged 22 to 24 agreeing that they are ‘buying more private label when grocery shopping in order to save money’ compared with 47.7% of consumers 65+, according to the 2011 Datamonitor Global Consumer Survey.
But this may be more out of expediency than loyalty, as 34.8% of these younger consumers also agreed that ‘private label brands are not suitable when quality matters’ versus just 21.5% of consumers in the 65+ age bracket, he points out.
“This may indicate some trepidation about the quality of private-labels relative to so-called ‘famous brands’.”
Younger consumers may actually have more respect for brands than older consumers
And when asked if ‘famous branded products offer better value-for-money than private labels’, 37.1% of young shoppers agreed versus just 23.6% of shoppers aged 65+, he notes.
“This is a fairly sizeable gap based on age… The data seems to indicate that younger consumers may actually have more respect for brands than older consumers.
He adds: “I think what may be going on is that younger consumers are less loyal to a particular brand, and may have a wider set of acceptable brands for purchase than older consumers.
“Younger consumers are also more interested in the ‘story’ behind brands and want to know the ‘how’ and ‘why’ answers about a brand that older consumers may not be concerned about.”
Is gourmet private label the answer?
But what about the research showing that young people - or at least higher income young people - are increasingly spurning big box stores and seeking out specialty stores in search of unique - often private label - product selections you might find in a Trader Joe’s or a Whole Foods relative to a Wal-Mart?
“Big box stores that try to be everything to everyone often have a difficult time catering to this type of consumer”, notes Vierhile.
“One way to possibly turn this around would be to utilize the ‘store within a store’ concept, but even then this could be tricky to execute. Mass-merchandisers like Wal-Mart are known for being highly competitive on price, and opening stores up to specialty stores within the larger store could dilute this price champion image with their core audience.”
Lori Colman: I don’t believe Millennials are categorically eschewing big brands per se
CBD Marketing president Lori Colman agrees: “Serving niche needs and preferences may be one of the most important ways for manufacturers/retail brands to differentiate / drive incremental revenue these days…but the cost of private label brands serving niche needs to be weighed.”
Meanwhile, she is not convinced that Millennials are any more or less brand-aware/loyal than anyone else, it all depends on the brands, she says.
“I don’t believe Millennials are categorically eschewing big brands per se. Loyalty from this group is probably the reward of a brand being nimble enough to keep up ahead of them or stay relevant.”
Some health issues just seem to be too far removed for younger people to care
As for health, there are “clear differences in the preference for nutrition and health products by younger consumers, versus older ones”, claims Datamonitor’s Vierhile. “The results are actually quite fascinating.”
“I looked at the difference in response for 22 to 24 year olds vs 65+ consumers, and identified out of 10 different health issues, the top four with the biggest gaps in consumers that are ‘interested and actively buying’ these products.”
The survey question was: ‘How interested are you in food and beverages providing the following benefit?’
The biggest differences with younger consumers showing more interest than older ones were:
- ‘Improve your appetite control/satiety by providing you with a feeling of fullness” (+15.1% point gap)
- ‘Improve your appearance’ (+12.1% gap)
- ‘Improve/helps you to relax and feel calmer’ (+8.9% gap)
- ‘Improve your ability to concentrate’ (+5.4% gap).
Younger consumers are more interested in body shape, mental alertness and stress relief
Conversely, older consumers were much more interested than younger consumers in:
- ‘Improve your heart health’ (-14.6% gap)
- ‘Improve your bone and joint health’ (-5.7% gap).
“The survey results clearly show a preference by younger consumers for products making body shape-related claims, as well as mental alertness and stress relief”, says Vierhile.
“Other health issues just seem to be too far removed for younger people to care, which suggests that the path to success may be focusing on the areas of highest interest, like body shape.”
Click here to read about what branding experts think about marketing to Millennials.
FoodNavigator-USA and NutraIngredients-USA are hosting an online conference on October 2 focusing on marketing to consumers at different life stages, from infants to baby boomers.
Click here to find out more and to register.