Everything you know about Gen Z and loyalty is wrong
For years, commerce leaders have chased the elusive butterfly of Gen Z loyalty, often with disappointing results.
We’ve seen the data: 62% of Gen Z will explore other brand options even if they have a favourite.
This “promiscuous” shopping behaviour, a direct result of their upbringing in a digitally saturated marketplace with an infinite number of choices, has led many to a grim conclusion: Gen Z is disloyal.
But what if this surface-level analysis is missing a crucial, contradictory truth? What if, beneath the swipe-and-tap exterior, Gen Z harbours a capacity for loyalty more powerful and profitable than any generation before them?
The myth of the “disloyal” digital native
Yes, Gen Z is a digitally native generation. Their lives are a seamless blend of online and offline, often happening concurrently. They discover products on social media, research them in-store, and expect a consistently perfect experience across every touchpoint.
A disjointed experience isn’t just an inconvenience; it’s a signal of incompetence. However, this isn’t necessarily disloyalty; it’s simply a demand for seamless service.
And they’re not just buying products; they’re making a statement about who they are and what they stand for. Their value-driven mindset means they’ll actively boycott brands that don’t align with their principles on issues like social justice and ethical labour practices. This isn’t disloyalty either; it’s an ethical alignment variable in their purchasing decisions.
The gold standard: passionate advocacy
The “loyalty paradox” reveals a profound truth: while Gen Z may appear a bit scattered, they are passionate advocates when a brand successfully resonates with them.
Consider that:
-
64%
are willing to pay a premium for brands they feel loyal towards
-
70%
of Gen Zs belong to a loyalty programme of some sort
-
50%
are willing to share their data to receive personalised rewards
Gen Z loyalty isn’t dead, but it has been fundamentally redefined. The barrier to earning their loyalty is higher. The goal isn’t just transactional engagement; it’s cultivating a dedicated cohort of brand advocates whose loyalty is rooted in deep, emotional, and value-based connections.
The anatomy of true Gen Z loyalty
So, how do you cultivate this “gold dust” loyalty? It’s about building a relationship rooted in deep emotional and value-based connections, not just transactions.
Our recent work with a global quick service restaurant (QSR) provided insights into unlocking this new loyalty. We conducted a three-part study to gain a deeper understanding of the behaviours, attitudes, and needs of the Gen Z audience. We learned that:
- Users need compelling reasons to leave their feeds. Audiences are resistant to visiting a platform just for content, especially if it can be found on social media. Storage limitations and screen-time fatigue mean they are highly selective about the apps they download.
- Rewards motivate where content alone does not. Giveaways, rewards, and discounts are their biggest motivators for visiting a cultural platform after trusted recommendations. They also highly value exclusive and unique content that can’t be found on social media. As one respondent put it, “If it’s just content, I’m not downloading it. I’m already getting enough from Instagram. There needs to be real rewards, like tickets, giveaways, or something big. A voucher isn’t enough.”
- Authenticity means letting the culture take centre stage. Our audience accepts that brands want to align themselves with youth culture, but they have high standards for how they show up. Brands earn credibility by providing platforms and support to creative communities, demonstrating that they have done their homework about the scenes they cover.
This research solidified our strategic approach, focusing on a loyalty programme that acts as an ecosystem, not just a platform. It needs to be the central hub that connects and synchronises every user interaction with your brand.
A high-quality digital experience is a prerequisite
For Gen Z, 75% believe an engaging digital experience is essential for any loyalty programme they consider joining. A flawless UX is the cost of entry.
A loyalty app must be an ecosystem, serving as the central hub that connects and synchronises every user interaction with your brand. This creates a data-rich environment essential for personalisation and engagement.
Common pitfalls for loyalty apps with Gen Z include: taking too long to receive meaningful rewards, a lack of genuine personalisation, infrequent communication, a mismatch between brand values and loyalty programme offerings, and a failure to clearly communicate the programme’s value proposition.
Future-proofing your brand
Gen Z’s behaviours and values are not fleeting trends; they are the new standard.
By 2030, Gen Z is projected to command a global purchasing power of $12 trillion, making them the most critical and complex consumer demographic for brands today.
Investing in a loyalty experience that “speaks the Gen Z language” is an investment in future-proofing your brand. It’s about building a more resilient, engaging, and profitable business by capturing the loyalty of this influential generation. The future of loyalty is in their hands, and it fits perfectly on a mobile screen.
