retail

Fickle Gen Y Trusts Channels, Not Brands

Gen Y

Between the BP oil spill and privacy issues at Facebook and Google, the concept of brand trust is coasting at mighty low levels these days. But some marketing experts -- including Paul Parkin, founding partner of SALT Branding, an integrated brand consultancy in San Francisco -- don't think the issue is always that brands are less trustworthy. It's that most companies have not kept up with swiftly changing definitions of brand trust, especially among different age groups. 

"In the digital age, consumers understand the concept very differently," says Parkin, whose clients range from Disney and Coca-Cola to start-ups like Jawbone and Mintfolio. Marketing Daily asks him why:

Q: Doesn't the word 'trust" mean what it always did?

A: No, because we experience it very differently. Once, it was based on solid and physical things -- people would look shopkeepers in the eye, shake their hands, touch their product -- and maybe buy it. Companies defined their brands themselves; they created advertising and told their story. But that's changed radically. As the culture moves increasingly online, there's an entirely different basis for the relationship. It's not physical, and it's not defined by the marketer.

advertisement

advertisement

Q: How important are demographics?

A: In some ways, very. Baby Boomers have one set of expectations of brands, and an idea of what it means to trust them. Gen X is quite different. In many ways, they are the brand generation. They latched onto powerful brands that emerged in the 1980s and '90s, and if you asked most people in that group to name 10 brands that define them, they could probably do it. Gen Y is completely different -- they want to multitask, and are much more into "we," in the sense of collaboration. They want to interact with companies, and with each other.

Q: Are they less loyal?

A: Much. They grew up in an age when there was always a new site emerging that was better than the old one, and they're happy to leave it behind. Facebook, for example, has done a good job of adapting to new technology and staying relevant, while appealing to older and older audiences. But I have no doubt that when the new Facebook -- whatever that turns out to be -- comes along, Millennials will flock to it. But they are more loyal to channels. They may not be loyal to any brand of shoes or department store, but they are loyal to the Internet channel, and brands like Zappos.com and Amazon.

Q: Who's keeping step with them?

A: The fastest-moving consumer companies, like Virgin, Red Bull and Pepsi. They're recognizing that consumers want to engage with brands in entirely new ways, such as through mobile or social media. And they know people want to do it on their own terms.

Q: Why so few?

A: Because marketers -- even though social and mobile media are the real hot buttons right now -- are very intimidated by the power shift. They recognize that consumer engagement is a double-edged sword, and that scares everybody. If you open yourself up and play that game, and then that trust gets broken, the reaction will be severe. We're seeing a lot of consumer aggression. Yet companies know they do have to create more interaction, that consumers of all ages are coming to expect that, so they are entering this space very begrudgingly.

4 comments about "Fickle Gen Y Trusts Channels, Not Brands ".
Check to receive email when comments are posted.
  1. Jordyn Haas from NetElixir, June 8, 2010 at 10:20 a.m.

    Excellent insights! Some companies are definitely reticent to shift the power to consumers. But the creativity that comes along with listening to your audience can do wonders for your product.

    http://bit.ly/9PKzxg

    http://netelixirblog.wordpress.com/

  2. Rochelle Tancioco, June 8, 2010 at 12:15 p.m.

    Fantastic article. I definitely agree that Gen Y is more skeptical of brands and prefer to try a bit of everything instead of sticking to a few brands. Gen Y is a curious bunch. We want to know a lot of "whys" and become knowledgeable before conforming and accepting. We want to be included in processes, asked for our input, and encouraged to interact, not just told what to do or forced to listen. It will be interesting to see how companies face this brand loyalty issue with Gen Y.

  3. Todd Parsons from Acxiom, Inc., June 8, 2010 at 8:58 p.m.

    Good perspective, but not so sure I agree that Gen Y trusts channels rather than brands. Facebook is a medium of communication, and while it has a powerful brand, you rightly point out that users will flock to another medium if it's more efficient. Similarly, Amazon is a medium, a way to get to physical goods of choice and join in the conversation about what we like, buy or should buy in the process. It's hard to compare these to Red Bull, a brand whose success with Gen Y is tied to investment in and intelligent use of new mediums. Like Facebook, they've become a participant in the lives of their users, and that takes doing even with great product behind you. Gen Y has actually shown resiliency in supporting brands which do the same, and I'd argue that the relationships that result transcend product and can give brands staying power with any generation. But hey, I'm a Gen X'er, so what do I know?

  4. Andrew Ward from Trust FX, June 9, 2010 at 7:31 a.m.

    Good article.

    The Internet and social media has shifted the balance of power away from businesses to consumers. Trust has always been a key enabler whose value increases with the risk and cost of a given transaction. It is important that the Brand image that a business projects is congruent with the quality of their products, the quality of their customer engagement and how they behave as a business.

    Consumer skepticism will continue to rise as they are able to see behind the curtain of the “brand facade”. This represents a great opportunity for quality companies with authentic brands to build deeper customer relationships and brand loyalty. Shallow brands will produce shallow loyalty.

Next story loading loading..