Problem Saturated markets are known to be competitive, with a wide selection of alternatives. In a saturated market is essential to differentiate a brand to compete in a market. Therefore, innovation has become a central part of a brand’s DNA when developing strategies, such as product evolvement and marketing. Today, there is a research gap of how innovation efforts are perceived by consumers of Generation Y, and how their loyalty to a brand is influenced by the phenomenon. Purpose The purpose of this qualitative research study was to investigate how Generation Y perceives a brand’s innovation efforts. Further, how their loyalty is influenced by the innovation efforts. One research question was developed to fulfill the purpose; how does innovation influence brand loyalty in saturated markets?   Methodology This thesis was written from a qualitative perspective. To gather empirical data, semi-structured interviews were conducted. The participants were all within the age restriction of Generation Y, and the samples were chosen through the purposive sampling approach.     Findings Several findings were identified from this qualitative research study. The two main findings were of great importance. One finding showed that within the saturated market of low-involvement products, marketing innovation plays a greater role than product innovation. Marketing innovation shows to have a large impact on establishing brand loyalty within a saturated market. Both findings were identified from the viewpoint of Generation Y.