Gen Z and brand loyalty

Last updated
Apr 17, 2024
How to authentically engage with this economically powerful generation

Gen Z, the first generation to grow up entirely in the digital age, is redefining brand loyalty in a unique way. They are incredibly tech-savvy and rely heavily on social media and peer recommendations to make their purchasing decisions.

A positive online presence and genuine social engagement are crucial for brands looking to win over Gen Z consumers. It's a generation that can catapult a new brand to stardom or take it down with a single viral post, making their brand loyalty a dynamic and influential force in the modern marketplace.

Millennial brand loyalty is driven more from online reviews than social influencers, and more from value and convenience than transparency.

Gen Z is the conundrum we all love to talk about – they defy consumer behavior, they demand more from brands than generations before them, they’re loyal but ready to switch at any time, and their behavior as a group wields great economic power.

The stats from National Retail Federation’s report on Gen Z loyalty show that even if Gen Z doesn’t have boomer spending power yet, they still influence it significantly:

Natonal Retail Federation report on Gen Z brand loyalty shows that Gen Z spends their own money to an extent, but significantly influences family (and therefore boomer) spending. Graph shows that GEn Z spends more on Clothes and Shoes than Furniture, but more than 60% and 76% of Gen Zers influence family spending in these categories respectively.

Gen Z is the "connected generation," having grown up with the internet. They’re digital natives but rely heavily on social influence, equally referencing the influencers on their phone and friends for recommendations.

A study from the Gen-Z focused culture company Shaka found that only 45% of Gen Z’ers report having “excellent” or even “good” mental health (12% less than Millennials). In fact, 87% responded that they would like companies to prioritize their mental and physical health.

They’re used to searching for deals and comparing; which makes a perk center one sticky way to engage this group of your audience. Imagine your brand is one of the bookmarks in a Gen Zer's phone because they find your perks so valuable. After all, 96% of customers say they wish brands would offer more and better rewards and perks (KPMG).

Here are 6 ways to engage these digital natives

  1. Build a perks center through Paylode with highly relevant and valuable offers, creating instant value for your audience. Curate local, trending, and high-value deals so they have reasons to come back.
  2. Ask them what they want. 44% of Gen Z said that they would like to contribute ideas for product design, if they had the chance. What if your next great idea to improve your business came directly from your future customers?
  3. Wellness as a focus. Gen Z is fully committed to work-life balance and improving their mental health, even moreso than millennials. Add gifts and deals from this category, for example massages, beauty, or spas, and show that you're reflecting their focus on self care.
  4. Be transparent. It’s no secret Gen Z demands higher standards from their brands. According to NRF, if a brand is slow to engage or breaks its promises, Gen Z will be ready to switch to a competitor.
  5. Get reviews from Gen Zers. NRF states that “When Gen Zers share opinions, they provide 2X more positive feedback than complaints.” If you can delight them, you’ve got some great social influence you can tap into.
  6. Personalize everything. Gen Z expects tailored, personalized experiences from the get-go. Understand their engagement with your product at a basic level (how often do they log in? What's your retention rate? Best and worst performing categories? Customer demographics, etc.) so you can create customer experiences that reflect their preferences and relationship with your company.

➡️ Read more: Engaging Gen Z in social impact campaigns by Lauren Atherton

Ready to woo this elusive yet powerful group of customers? Learn more about perk centers.

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About the author
Adrienne Kmetz
Adrienne is a marketing expert with a career history of working in startups of all sizes, from early stage to series A. She has 17+ years of experience writing about business, finance, and entrepreneurship. She went to Colorado College where she majored in skiing.
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