Millennials and brand loyalty: My thoughts

 

When Gallup says Millennials are “the least-engaged generation of customers,” with “the lowest level of customer engagement” of any group of consumers in the country, a couple thoughts come to mind.

Those conclusions come from Gallup’s recent study, “How Millennials Want to Work and Live.” Full disclosure: I read this article, which is from Gallup, about the study, and not the long study itself.

The study’s supposition, it seems to me, is that it’s important for companies to earn the loyalty (committed engagement) of customers, who then go on to become “advocates and brand ambassadors” for the companies’ products and services. I certainly “get” that concept: when I was a young rock-and-roller, groups like the Beatles, Stones, Grateful Dead and Led Zeppelin became superstars through the advocacy of people (like me) who heard them very early and told all our friends to check them out. (I never thought of myself as a Beatles “brand ambassador” but in retrospect, I guess that’s what I was.)

These days, the Gallup study warns, instead of creating such “brand ambassadors,” many companies run the risk of “creating brand destroyers who have a host of digital soapboxes from which to air their grievances.” Lord knows that’s true! I myself have been known to go to Yelp to air grievances about restaurants—although not too often, since I’d rather praise than pan. And with Millennials living on their mobile devices, they’re bound to stumble across “brand destroyers.”

Of course, the news isn’t all bad for all companies: Gallup found that “95% of fully engaged millennial customers say they plan to stay with their wireless provider,” a degree of customer loyalty that bodes well for the wireless providers, since “These fully engaged customers are substantially more likely than other customers to say they would recommend their provider to others…”. That’s what every company wants to hear about its customers.

Thing is, most of us ordinary customers have little choice of wireless provider. I suppose that instead of AT&T, which I’ve had for years, I could have Verizon, Sprint or T-Mobile. But in my mind, they’re Tweedledum and Tweedledee: The new boss is the same as the old boss. Do I love AT&T and would I recommend it to my friends? No. It simply means that AT&T does a decent enough job, and it’s not really worth my time and energy to look into other providers; changing wireless providers can be a real hassle. This is especially true of cable T.V. providers in America, a business that I think is monopolistic. I’ve had Comcast for a long time, but that doesn’t mean I love them. In fact, I don’t particularly like Comcast, but I feel rather like they have me over a barrel. So the mere fact that I’m “fully engaged” with Comcast means nothing.

There’s another factor when it comes to those low levels of engagement by Millennials: The younger people are, I think, the less engaged they are with almost any company. Isn’t that true? Millennials may be highly engaged with, say, Instagram, but Instagram is the outlier. When it comes to soaps, or cereals, or pants, or sneakers or toothpastes or bicycles or toilet paper or rock bands or video games or, yes, wine, I should think Millennials are a lot more experimental (or maybe fickle is a better word) than us more-conservative older consumers; we are admittedly less adventurous, but we do tend to be brand-loyal. Naturally impatient, Millennials are reluctant to commit; they want to keep their options open. And who can blame them? They’re young, figuring the world out. They may be in love with Nike today, only to switch to Asics tomorrow. It doesn’t mean they hate Nike, and it doesn’t mean they have any interest in being a “brand destroyer” for anyone.

The implication of all this is that it’s hopeless for a wine company to pin their strategy on earning the undying loyalty of Millennials. And yet, we know that millions of Millennials will eventually end up liking specific wines and wineries, once they get the experimentation thing out of their heads. Wineries know that, which is why they’ll continue to try to appeal to Millennials as “brand ambassadors.” The trick is to actually get it done. My own two cents is that Millennials, not having a lot of money, are looking for bargains and values. Beyond that, I believe they’re “get-attable” (FDR’s word) with the right combination of flavors, packaging and story-telling. And to understand what that means, you should look at the most popular wines in America, not just among Millennials but everybody, and analyze how they got to that exalted status.

A conversation with Press Club’s Aram Roubanian

 

Aram Roubinian is the thirty year old assistant GM and beverage manager for Press Club, the hot, stylish wine bar and lounge on Yerba Buena Lane, tucked between Market Street and Yerba Buena Gardens. I asked Aram, who’s been there for five years, to tell me a little about Press Club.

Aram: Right after we opened, in 2009, the economy tanked. Trying times. The original concept was, we had contracts with different wineries—Miner, Chateau Montelena, Mount Eden, Hanna, Saintsbury and Fritz—with each occupying a different space. But it became apparent that wasn’t viable, so now, we showcase California wine, as well as Old World wines that inspired the wine renaissance in California, like classic Burgundy and Bordeaux. We also offer crafts beers and small plates.

SH: How would you describe your clientele?

AR: I’d say a Financial District crowd, mostly female, but professionals both men and women, and lots of corporate events, a nice range. I’d say the average age range is 30-40, but we do have some more mature clientele.

SH: What’s the customer’s sweet spot, price-wise?

AR: By the glass, $12-$14, and for bottles, $60-$80.

SH: What’s selling well?

AR: Whatever Sauvignon Blanc we have just flies off the shelf–doesn’t matter if it’s winter or summer. Our Pinot Noirs are very popular and, surprisingly, price point doesn’t matter. Our clientele likes premium Pinots and popular price points as well. Right now, our most popular Pinot is Stoller, from Dundee Hills, which is right in the middle, pricewise ($18 – $82). I’m also seeing a spike in Spanish wine; Tempranillo is very trendy. But the hottest trend going is Prosecco.

SH: What’s not hot now, compared to when you first came?

AR: Chardonnay is losing traction, especially the oaky style.

SH: Why do you think that is?

AR: I think it’s a little bit of what happened to Merlot after Sideways: a lot of people began to bash it–the media and, these days, everyone has Facebook, twitter, and a lot of people get their info from peers, as opposed to only from the media, so I think of it as a whole collective, people were influencing each other. People call it “cougar juice,” the big buttery oaky Chards. It has this connotation that old women drink it.

SH: Kiss of death!

AR: Yes, right, especially for the female clientele, they don’t want to be perceived as older, out of touch. And also, with our younger clientele, they don’t want to drink domestic wines. Which is scary for the domestic market.

SH: Again, why is that?

AR: It’s a rebel without a cause, the hipsters; this generation wants to go back to more of the old world wines. But I feel like that too will change in time, and people will discover there’s wonderful wine everywhere.

SH: Where do you see the Millennials going in the future?

AR: I see a move towards more natural winemaking–that’s on everyone’s mind. Not a wine that’s necessarily certified organic or biodynamic, but a more natural process, with less pesticides, sustainable, and people are conscious about the environment, global warming, I see more solar power being used. People want to know what they’re consuming. These days, there’s a lot of fillers in wine, and people are becoming more aware that wine can be easily manipulated. Ridge lists all the ingredients. I like that; I like the transparency there. But overall, I see people becoming a more self-sophisticated wine consumer. They realize, while they may have enjoyed consuming that buttery chardonnay and it was pleasure to the palate, they found out with a more delicate, balanced wine they could find more nuances and actually enjoy it more.

SH: Thank you Aram!