Customer Engagement

Watch out – here comes Generation Z

For the past decade, the demographic focus for most marketers has been Millennials – remember them? – the generation that crashed the music and publishing industries, turned social media companies into multibillion-dollar businesses, and began the retail apocalypse. As the oldest Millennials enter their thirties – that’s only ten years away from 40 and your impending irrelevance to marketers, Millennials! – marketers are now turning their attention to Generation Z, those screen-addicted, participation trophy-receiving, mollycoddled teens and twenty somethings who we will most certainly be scrutinizing at length in our desperate attempt to understand how they will change everything that the Millennials already changed. Fortunately, a new research report helps us gain some early insight.

By Wise Marketer staff

The report, released by loyalty provider CrowdTwist and called “Generation Z vs. Millennials: The Changing Landscape of Loyalty,” reveals research into the similarities and differences between Generation Z and Millennials in their attitudes towards brand loyalty and engagement. The research explores how they engage with brands, their shopping habits, their brand loyalty and the loyalty programs they are active in.

The results indicate that in order to encourage loyalty among younger generations, brands must build personalized experiences, facilitate engagement across all channels including in-store, online, social, and mobile, and provide relevant loyalty rewards and a wide range of opportunities to earn loyalty program points, including playing games and writing reviews. Marketers should note that there is growing opportunity for non-traditional industries such as beauty and media and entertainment to adopt loyalty programs.

Key findings include:

  • 57 percent of Generation Z prefer shopping in-store: Despite being digital natives, Generation Z prefer to shop in-store rather than online, and a slightly larger percentage of them compared to Millennials prefer to do so.
  • 75 percent of Millennials and Generation Z are willing to share personal information in exchange for a personalized experience: Customized experiences are important to Millennials and Generation Z, so much so that the majority of participants surveyed are willing to provide brands with additional personal data.
  • 63 percent of Generation Z are active in at least one loyalty program: Despite their youth and reputation as “less brand loyal,” the majority of Generation Z are already participating in at least one loyalty program. 71 percent of Millennials are also active in at least one program.
  • Loyalty programs provide a competitive advantage: The majority (64%) of both Generation Z and Millennials could be persuaded to shop with brand if they have a loyalty program. Generation Z consumers rank beauty and media/entertainment in the top five categories for loyalty programs. It is worth noting that beauty ranks #5 with Millennials.
  • Almost 40 percent of Generation Z ranked playing games as their preferred way of earning points as part of a loyalty program. Generation Z are also almost 50 percent more likely than Millennials to write a review for a brand in exchange for points.

Money quote from Scott Matthews, CEO of CrowdTwist:

“The survey results provide a comprehensive overview of the current loyalty climate and a view into how Generation Z could change the way brands engage with consumers in the years to come. Loyalty programs remain one of the biggest drivers of brand choice across both generations. In fact, the younger generations are driving the success of loyalty programs. In order for brands to succeed in meeting the expectations of these young consumers, they must adopt a data-driven, omnichannel approach to customer loyalty.”

Download the CrowdTwist report here.

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