In Brands, Gen Y Consumers Value Buzz, while Gen X insists on Functionality [INSIGHT]

The GfK Brand Benchmark Study, assessing US consumers’ relationships with hundreds of products and services in 48 categories, found stark disparities in what different generations value in a brand. While both Generations X and Y value a product’s functionality (associated with a Best Friend relationship), Gen Y also cares strongly about a brand’s image and notoriety (epitomized by Star and Guru status).

GfK has also found that brand relationships can translate directly into revenue. Brands thought of as Best Friends enjoy a share of wallet up to several times greater than average, while Star and Guru brands often command higher price premiums.

“It is essential for brands to create positive and memorable experiences to build strong consumer-brand relationships,” said Jo-Ann Osipow, EVP of GfK’s Brand and Customer Experience team. “Our study shows that negative or even casual brand relationships result in low market share and low price premiums. Bolstering a brand’s reputation as having the qualities of a true friend – with a clear understanding of customers’ needs and a presence in their social world – can be a win-win for both marketer and consumer.”

Based on online surveys among 17,000 consumers, the GfK US Brand Benchmark study yielded results for the total market (ages 18 to 65), Generation X (35 to 48), Generation Y (18 to 34), and Baby-Boomers (49 to 65), in addition to other demographic sub-groups. The categories included packaged goods, technology/telecom, automotive, retail/restaurants, hospitality, media, financial services, and government.

For hundreds of products across the categories, the study determined which of 27 different archetypal relationships consumers had with that brand – from Complete Stranger to Buddies to One-Night Stand.

Best Friend connections – one of the most desirable brand relationships — can be found in diverse categories, from food and beverages to cosmetics. To be a Best Friend, a brand needs to be seen as trustworthy, understanding of consumer needs, reliable, and committed.   

By contrast, Star and Guru relationships require that a brand be perceived as being of superior quality, unique, and more visible than other brands. Buzz is key for this relationship type.

Generational differences

The study shows that Gen Y is more likely to have Guru/Disciple connections to brands, indexing at 148 compared to the average of 100. Gen Y also indexes at 133 for Villain-Victim relationships.

In contrast, Gen X – dealing with the multiple demands of family and career – respond to brands in a pragmatic way, seeking out products that meet needs and help them gets things done faster.  .  They focus on quality more and style/design less compared to other generations:  over 90% equate product quality with value, while fewer Gen Y consumers make that connection.

The value of brand relationships

Brands considered Best Friends by 20% of category users have an average of five times the share of wallet of brands with less than 10% Best Friends. Further, high-ranking Best Friend brands have three times more positive word of mouth and 2.5 times the recommendations, compared to those with low Best Friend rankings.

Star and Guru relationships drive not only high market share, but also premium pricing. Brands that are seen as Stars by over 5% of category users achieve an average of three times more share of wallet compared to brands with a Star rating under 2%. They also receive three times as many recommendations from customers, and have six times as many consumers calling them “favorite brands.”