Alarm bells ringing for millennial fashion brands

This article was written by Guy Courtin for Just Style. 

A recent survey, commissioned by GT Nexus and conducted by research company YouGov, confirmed a lack of brand loyalty among millennials. For the fashion industry, the devil is truly in the detail of this research as it not only sounds a series of clear warning bells to fashion brands, but also reveals some surprising truths about influencing this most fickle of markets.

Alarm one: brand loyalty is dead

This article is not the place to debate the definition or attributes of millennials. There are already small libraries worth of books dedicated to that endeavour. Suffice it to say, the demographic of those born 1983 to just before the millennium is one of the most widely studied markets.

While the attributes of millennials are a cause of some debate, one aspect of consensus is the unrivalled plethora of alternative brands for them to identify with, and spend money on. This has led to the death of brand loyalty, as millennials switch quickly and with ease, thanks to the range of shopping channels they have at their disposal.

Globally, 61% of millennials have switched their favourite brand in the past 12 months. And perhaps even more telling is that more of them don’t know or cannot recall if they have switched, compared to those who are sure they have not. Simply put, brands may be important to millennials, but brand loyalty is not.

Alarm two: a lot of fashion retail may have misread the millennial market

Whilst food and drink top the list of product categories most accustomed to defection, fashion comes in a close second. 42% said fashion would be the most likely product category they would change. That is an outright admission by four in every ten customers aged 18-34 that they will change brands.

In the case of Levi’s, Forever 21, Under Armour, Vans, Victoria’s Secret, River Island, Nike or any other fashion brand whose number one market is millennials, this is a concern.

Perhaps more worrying, is the evidence that fashion brands may have misread how to address this. There is evidence that contrary to popular belief, consumer-facing marketing factors, such as a brand’s social media presence, mobile apps or a cool website, don’t have a big impact on millennials’ brand loyalty.

It turns out that the top two factors that will cause this demographic to change brands are exactly the same as those that would have caused the same change in the behaviour of their parents or grandparents: product quality and availability.

At the risk of stating the obvious, it is worth noting that both of these major disloyalty factors fall into the “behind-the-scenes” domains of operations, logistics and supply chain management.

Whilst it is no surprise to see a high percentage of this demographic shifting brand loyalty frequently, fashion brands have often previously thought of millennials as being drawn to cool, edgy and flashy front-end brand experiences. This is simply not the case.

Alarms three and four: quality and availability

This new realisation should sound the next alarm bells for fashion manufacturers and retailers. Expectations of product quality continue to rise, even throughout fast fashion and cheap chic brands. Better quality typically means more cost but now, if low-cost fashion still fails to meet millennial expectations of quality, there is a very real risk of losing customers.

One of the basic truisms of fashion is you cannot sell what you don’t have available. This goes for online, in store or across a multi-channel experience. And whilst there are now more options than ever to fulfil an order, the failure to do that on the millennial customer’s first visit may cost a fashion brand more than just one lost sale.

As part of a strategy to reclaim lost market share, Adidas is going to start offering customised shoes to appeal to millennials. It is also working to reduce the time between when products are designed and when they hit shelves. These are both initiatives that live or die with the success of an agile supply chain. Retailers are becoming ever more dependent on the supply chain as a source of competitive advantage.

Alarm five: ethical and environmental profile

And it does not stop there. Millennials care about how their favourite brands are made. 25% of respondents would turn on a brand if it doesn’t treat or pay its workers fairly. 20% would switch brands if the product isn’t environmentally friendly.

As an industry, fashion is often in the spotlight for its ethical or environmental performance. It is clear from these results that not only are millennials concerned with what goes on behind the scenes of a brand and how it produces goods or operates, but that ethical, responsible business practice is now a source of competitive advantage.

Initiatives such as ‘Love Fashion, Hate Sweatshops,’ send a very clear message to millennial brands. If a fashion brand doesn’t respect the workers creating the goods on sale – either inside an organisation or throughout supply chains – customers will consider leaving that brand.

This is of course equal part risk and opportunity; and visibility throughout a supply chain is a critical tool in ensuring that a brand can defend – or trumpet – its ethical or environmental track record.

Thankfully, fashion has a growing track record in developing progressive, effective initiatives that harness better business practices and commercial growth. It will be the millennial market that continues to drive this synthesis, rewarding brands that can use their supply chain in this way.
About the author: Guy Courtin is vice president of industry and solution strategy for retail and fashion at GT Nexus, a cloud-based global trade and supply chain management network that connects all parties and orchestrates the movement of goods, data and money.