Millennial and Gen Z consumers show loyalty when companies value purpose
Young consumers want brands to reflect their values, and their loyalty is shifting.
Companies need to take notice of the changing habits of U.S. consumers, especially millennials and Gen Zers, according to a report by McKinsey & Company released on August 11. By gauging the sentiment of consumers during the COVID-19 pandemic, the firm provides a snapshot of trends, including buying habits.
Around 40% of Americans surveyed said they have changed brands since the onset of the pandemic. The level of brand-switching also varied by generation, according to McKinsey. Almost half (44%) of millennial and Gen Z consumers have tried a new brand, compared to 35% of baby boomers. Overall, 65% of respondents said the main reason for the switching brands was better product value and quality. However, younger consumers’ decision to switch was driven by a company’s ethos. About 42% of millennials and Gen Z consumers cited purpose as the primary factor in changing brands. For example, they based their decision on whether a company shared their values and if employees are treated well. And 44% of millennials and Gen Zers said it mattered to them whether a product is organic or natural. The data is based on a consumer pulse survey of more than 2,000 respondents.
A company with a clear purpose signals to both internal and external stakeholders who you are and what you stand for, according to McKinsey. And young consumers also want the companies they work for to reflect shared values.
The 2021 Fortune Best Workplaces for Millennials list was released in July. Fortune’s research partner, Great Place to Work, analyzed feedback representing more than 5.3 million employees in the U.S. The top three firms ranked by millennials are Cisco (No. 1), Salesforce (No. 2), and Hilton (No. 3). This year, Zillow jumped 42 spots on the list to No. 24. Millennials named a commitment to gender equity as one of the reasons they are drawn to Zillow. And for the past 12 months, the company has maintained pay parity between genders doing the same job.
The McKinsey report also found that e-commerce showed more than 40% growth over the past 12 months taking a “homebody economy” mainstream. People are still investing in their homes, especially as 70% of companies continue some type of remote work even following the pandemic. “We expect to see this trend continue in the medium term,” according to the report.
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Fortuna Advisors and the CEO Investor Forum at CECP, a global organization, published new research in the Journal of Applied Corporate Finance on the link between corporate purpose and value creation. Companies leading on purpose "significantly" outperformed those scoring low on purpose, the research found. "The research provides empirical support to the growing debate on whether purpose and profit can coexist in the public corporation," according to the report.
Why Every Executive Should Be Focusing on Culture Change Now, a report published in the MIT Sloan Management Review on August 10, examines how leadership can meet the challenge of making culture a priority amid transformation. Digital technologies, new business models, and new ways of working have all been accelerated by the pandemic. "Business leaders must lay the foundation for their organizations to thrive in a very different world," the authors write.
Rich Fisher was promoted from CFO to SVP and CEO at Centene Corporation, a multi-national health care enterprise. Fisher joined Centene through the acquisition of Wellcare. He has worked over 15 years in the combined organization. Fisher served as Medicare's CFO for the past four years.
Don Alvarez was named CFO at Cyngn, an industrial autonomous vehicle technology developer. Alvarez joins Cyngn from the International Council of Shopping Centers where he served as VP of finance for three years. He also served as VP of finance at QuVa Pharma, Inc, and regional managing director at Resources Global Professionals.
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