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How to earn Millennials’ loyalty

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Millennials account for nearly a quarter of the American population, with collective pockets each year as deep as $200 billion. For mass market retailers, this makes them a critically important group — especially as they begin to have families.

The high bar Millennials hold for brands is only made higher when it comes time to clothe, feed and care for their children. And, of course, these children are then raised with this same standard, undoubtedly informing their relationships with brands as they mature in the marketplace. The question is, what are those standards? What must brands and retailers do today to ensure long-term customer loyalty from Millennials and from their children?

Based on research conducted by Catalant, there appears to be a set of integrated features and behaviors throughout the value chain that resonates with this cohort in a way that’s creating opportunity for brands and retailers of all sizes. This set of values can be summed up in the word L.A.T.T.E., which stands for local, authentic, transparent, traceable and ethical.

Research suggests that Millennial parents are 20% more likely to heavily weigh the elements of L.A.T.T.E. when it comes to shopping for their children as compared to non-Millennials. These particular consumers want to know that the stores they’re engaging with are honest about their brand story and products; forthcoming on details of sourcing and manufacturing; committed to honest, genuine packaging and brand communications; reflect long-standing quality; and honor the geographic and diverse needs of ­customers.

Several consumer packaged goods companies have leaned on the five tenets of L.A.T.T.E. to define or pivot their brands. For example, KIND is a leader in the snack space, having grown into a $500 million-plus business since its 2010 launch — leadership built on its promise of offering high-quality ingredients “you can see and pronounce.” This mission focuses on addressing traceability, transparency and authenticity in a way that allows consumers to personally judge the information the brand shares. KIND goes so far as to wrap its snacks in clear packaging, inviting consumers to literally see for themselves the natural ingredients. This is precisely the kind of thing that falls in line with Millennial parents’ value system when they’re considering what to buy for family members.

In this same vein, and in line with L.A.T.T.E.’s local principle, companies are incorporating local elements while still reaping the benefits of distribution at a national or global scale. It’s important to consider the idea of local in a broader sense. Here’s why: Of Millennial parents, 62% value local products, and of those, 84% pinpoint quality as the main driver in buying local. With this in mind, companies can share their brands’ stories of “place-hood” across regional lines and resonate with Millennial parents in meaningful ways.

For example, Maine-based Downeast Cider has found that its cider sells as well in New England as it does in the Mid-Atlantic. Consumers identify cider as a distinctly New England-made product, and therefore authentic and of high quality, even if purchased outside the region.

These examples all share pieces of the L.A.T.T.E. ideology, and they explain why related brands have been able to soar amid the shifting landscape in consumer products.

For brands, navigating the emergence of new ideologies among consumers is challenging, but it can also create an incredible growth opportunity if done well. For retailers, Millennial parents will want to shop at the stores that have the products they love, whether that be locally sourced cider or snacks made with authentic ingredients. This means that retailers must be thoughtful and strategic in the sourcing and purchasing of goods — keeping the L.A.T.T.E. mentality front and center. And, as a result, they should expect to see a positive, direct impact on business growth and customer loyalty.

Pat Griffin is general manager of retail and consumer goods at ­Catalant.


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