This new survey of young adults 18-to-29 years old from payments platformSwift Prepaid Solutions found that as Generation Z and young millennials exhibit much greater price sensitivity and much lower brand loyalty than prior generations—there is a challenge for name brands looking to grow loyalty with this group.
“Brands are at a crossroad with the shifting loyalty of Generation Z and young millennials, requiring a fresh approach to engaging this next generation of buyers,” said Rodney Mason, Swift’s chief revenue officer, in a news release. “As brands develop new strategies, incentives and referral programs using prepaid cards will become more crucial to recruit, retain and grow their customer base by appealing to buyer’s wallets and communities.”
Benefits of buying name brands:
Benefits of buying private label brands:
Highlights from the research:
- 60 percent of Generation Z and young millennials are neutral when choosing between name brands and private labels.
- Over 80 percent indicate price is the most critical factor when making a purchase; and 50 percent believe name brands are much more expensive than private label brands.
- 67 percent of those who regularly choose name brands, purchase them when they want assurance the product will be up to their standards.
- The number one way they learn about brands is from friends and family, outpacing Google, social media, Amazon, retail stores and television in order.
- 68 percent are willing to refer name brands to a friend and 41 percent would do so for an incentive.
- 83 percent are more loyal to brands that offer value-added rewards and surprises.
- 82 percent are willing to spend earned rewards on special offers delivered with the reward.
As more young adults choose private label brands over name brands, promotion pricing, recommendations from friends and family and loyalty bonus rewards are influencing more purchase decisions. Prepaid virtual and physical cards, which Generation Z and young millennials are twice as likely to prefer over checks and PayPal, work best for these incentives.
Key takeaways from the research: