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Businesses face higher expectations than ever

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A report about brand loyalty among Millennials released last month includes some surprising findings that should prompt mass market retailers and consumer products suppliers to reexamine the way they do business. Based on a survey of people between the ages of 18 and 34 conducted by research company YouGov and GT Nexus, a supply chain technology provider, the report found that 67% of Millennials abandoned one of their favorite brands during the past year and embraced an alternative.

MMR OpinionProduct quality and availability were the most common reasons given for changing allegiance from one brand to another, with 49% of respondents citing the former and 44% the later. Those elements, along with price, are bedrock concerns for consumers of all ages and represent continuity in the marketplace, providing a degree of reassurance to companies intent on continuing to do business as usual.

Things get more interesting when one considers some of the other explanations Millennials offered for switching brands. Thirty-two percent of survey respondents indicated that they would make such a change if workers aren’t paid or treated fairly, and 27% said they would do so if a brand isn’t good for the environment.

“Millennials are sending a very clear message to their favorite brands,” says Guy Courtin, GT Nexus’ vice president of industry and solutions strategy. “If you don’t respect the workers creating your goods — either inside your organization or in your supply chain — we will turn on you. The same goes for the environment. Manufacturers and retailers should heed this warning and strive for fair, transparent and environmentally friendly supply chains.”

Many top-tier retailers — Walgreens Boots Alliance, Kroger and Walmart, among them — have already started down that road. Along with their customers, they are increasingly tracking progress in terms of how things are done and their impact on the community as a whole, in addition to using the traditional measures of sales, earnings and other financial metrics. Perhaps no company better exemplifies the ongoing shift in orientation than Ahold Delhaize, whose top two executives, Dick Boer and Frans Muller, are honored elsewhere in this issue as MMR’s Retailers of the Year. Formed through a merger that was finalized last July, the company has established a strategic framework that focuses on areas where the retailer can make a difference in the day-to-day lives of its employees and the customers and communities it serves.

The plan calls for Ahold Delhaize to promote healthier eating, cut down on food waste, and maintain healthy and inclusive workplaces. In addition, the retailer has pledged to sell high-quality products that are safe, affordable and meet sustainable sourcing standards; reduce carbon emissions and waste; and encourage the development of its associates and provide them with a safe environment.

This brief summary reflects the scale of Ahold Delhaize’s ambitions, but it doesn’t begin to do justice to the way that vision is now being weaved into operations at every level of the company, which operates 6,500 stores on three continents.

Boer, Muller and their colleagues understand that, because of external and internal forces, retailers and their suppliers must approach business today in ways that not all that long ago were afterthoughts. Millennials, as well as a growing number of employees and customers from other generations, demand it. Companies that fail to respond are likely to find many of their customers looking for other options.


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