Earning an A+ from Gen Z with 7 Loyalty Must-Haves

When people think of “Gen Z”, they often associate the term with the stereotype of a young person who spends too much time on their phone. While this may be true for some members of the generation, it is not an accurate representation of all of them.

As the youngest adult generation, Gen Z is often confused with the millennial generation, as they both grew up surrounded by digital technology and share some similar characteristics. However, there are distinct differences between the two groups that businesses should be aware of if they want to build a relationship with Gen Z customers.

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As a knowledgeable marketer, it is essential to understand their preferences and what loyalty program features would attract them. Gen Z shoppers are more likely to view brand loyalty as an emotional connection, rather than just a series of transactions. Hence, it is imperative to connect with this demographic on a personal level and establish a long-lasting relationship to ensure their continued loyalty.

Who are gen Z customers?

The generation known as Gen Z is becoming an increasingly significant part of the workforce and is also gaining significant purchasing power and disposable income. Gen Z is typically defined as those born between 1997 and 2010, although the exact dates can vary. This age group is at a unique intersection because the older half is legally considered adults and has started working, while the younger half is still in school and will not achieve financial independence for some time.

Gen Z has experienced several significant socioeconomic events that have impacted their development, including the COVID-19 pandemic, which has had a particularly severe effect on them. Additionally, the great recession of 2007-2009 also significantly impacted this generation, despite the youngest members not yet being born at that time. This recession had a long-lasting effect on the job market, influencing attitudes towards higher education and leading to a shift towards STEM (Science, Tech, Engineering or Maths) subjects.

Compared to millennials, who grew up with social media, Gen Z is more interested in immersive experiences such as Minecraft and Roblox. They tend to be financially practical and risk-averse, although they share a commitment to social causes and corporate responsibility with millennials. This is a notable difference from Gen Xers.

Understand their mindset

Gen Z is an exceptionally diverse generation that values inclusivity, open-mindedness, and has strong beliefs against gender discrimination, climate change, and marriage equality. They have grown up with instant and on-demand access to goods, services, entertainment, and information, and are not easily swayed by advertising. Instead, they prefer ad-free media spaces and subscription services. While they have a complicated relationship with social media, over 50% of Gen Zers trust social media influencers to give them credible advice on brands or products. Nonetheless, these influencers must remain consistent in their product reviews and feedback.

Gen Z consumer characteristics

Gen Z’s consumer behavior tends to be characterized by:

• Researching and weighing options before making a buying decision
• Being less attached to specific brands and instead shopping around for the best deal
• Placing a high importance on brand ethics and corporate responsibility
• Being the most likely to shop via social media
• Looking for a mix of value, quality, and ethical practices in products and brands

When it comes to shopping, Gen Z prefers:

• Shopping in-store despite being the most online generation
• Having real shop assistants to help them with queries
• High expectations in terms of customer service and product quality
• Individualized shopping experiences tailored to their personal preferences

According to a survey by IBM, product choice, availability, convenience, and value are the top factors influencing Gen Z’s choice of shopping channels. Despite having lower spending power, Gen Z has a big influence on the consumer market through their influence on their parents’ buying decisions and wider product trends.

What Gen Z Is Looking for in a Loyalty Program

Gen Z is highly receptive to loyalty programs, with 79% of them expressing interest in such schemes. Additionally, a significant majority of 60% believe that loyalty programs should be offered by all brands. Compared to other generations, Gen Z values experiences, charitable donations, unique and exclusive rewards, and partnership perks more. The For Love or Money™ 2022 survey conducted by The Point of Loyalty found that financial rewards are less of a priority for 49% of Gen Z members. Moreover, Gen Z is interested in innovative ways of being rewarded, such as receiving incentives for recycling (93%) and maintaining healthy habits (83%).

1. Authenticity: Gen Z values authenticity and honesty. They want to know that they can trust the brands they interact with. Therefore, it’s important to be transparent and honest in all your dealings with this demographic. For example, A clothing brand uses real customers in their advertisements and social media posts instead of professional models to showcase their clothes on people of different shapes and sizes.
2. Personalization: Gen Z expects a personalized experience. They want to feel like you understand their unique needs and preferences. Therefore, it’s important to tailor your messaging and offerings to their individual interests. One example of this is a beauty brand uses a quiz on their website to recommend personalized skincare routines based on each customer’s unique skin type and concerns.
3. Social Responsibility: Let’s say A coffee shop switches to biodegradable cups and donates a portion of their profits to an environmental charity. Because gen Z is socially conscious and cares about the impact businesses have on the environment and society. Therefore, it’s important to be socially responsible and show that you are committed to making a positive impact.
4. Innovative Technology: Gen Z is tech-savvy and expects businesses to keep up with the latest technology trends. Therefore, it’s important to incorporate innovative technology into your business offerings. As a case in point A fast-food chain introduces a mobile ordering app that allows customers to customize their orders and skip the line when they arrive.
5. Omnichannel Experience: Gen Z expects a seamless, omnichannel experience. They want to be able to interact with your brand across various touchpoints, whether it’s in-store, online, or through social media. For example, a home decor store offers in-store pickup for online orders and also provides virtual consultations with interior designers via video chat.
6. Memorable Experiences: Gen Z values experiences over material possessions. Therefore, it’s important to create memorable experiences that will leave a lasting impression on them. As an example, An amusement park introduces a new roller coaster with virtual reality headsets that transport riders to different worlds and create an immersive experience.
7. Customer Service: Gen Z values good customer service. They want to feel valued and heard when they interact with your brand. Therefore, it’s important to prioritize customer service and ensure that your team is equipped to provide a positive experience for every interaction. Let’s say a tech company provides 24/7 customer support via chat, email, and phone, and also assigns a dedicated account manager to each customer to ensure personalized attention and timely issue resolution.

Building Loyalty That Lasts a Lifetime With Gen Z Customers

Gen Z consumers have a strong desire to receive recognition for every interaction they have with a brand. This demographic is willing to participate in activities that are valuable to the brand, such as providing feedback or engaging with games, in exchange for rewards. It’s crucial for brands to seize every opportunity to engage with their customers, in order to maintain their active participation in the loyalty program. By taking a personalized and strategic approach to program design, brands can effectively capture the loyalty of Gen Z.

To assist in the creation of a reward system that inspires customers to return, book a demo with us today to get started.