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Marketing

13 Nov 2024

The future of Gen Z brand loyalty: What you need to know

Mohammadreza Javanian

Talon.One loyalty expert

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5 minutes to read

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Is loyalty fading with Gen Z? Not when it’s done right.

This generation is reshaping how loyalty is earned—focusing on authenticity, purpose, and meaningful engagement rather than traditional rewards. Gen Z brand loyalty isn’t dead; it’s just driven by principles that go beyond traditional incentives.

68% of Gen Z shoppers view their purchases as a reflection of their personality, values and beliefs, compared to just 43% of Baby Boomers. Building a loyalty program that speaks to these values is the first step to capturing Gen Z’s attention.

As the most digitally fluent generation, they’re highly attuned to values like authenticity, inclusivity, and environmental responsibility. Gen Z’s loyalty isn’t earned through points alone but through genuine connections and shared values.

Businesses that resonate with their ideals and create transparent, purpose-driven experiences will capture a place in this generation’s purchasing habits. Read on to understand what makes Gen Z loyalty tick.

Gen Z brand loyalty—key insights

Tech-fluent and drawn to seamless experiences, Gen Z is setting the pace for future consumer behavior. Let’s dive into some of this generation's key characteristics:

Gen Z consumer characteristics

Informed and research-oriented: Gen Z consumers research extensively before buying - 70% of Gen Zers say they only trust a brand after carrying out their own research.

Less brand loyalty, more deal-oriented: This generation isn’t afraid to shop around for the best deal, making brand loyalty a challenge.

High expectations for brand ethics: 73% of Gen Z seek out ethical companies, and nine out of ten believe businesses need to tackle environmental and social issues.

Social media-driven shopping: Gen Z uses social media as a shopping and discovery platform, and relies on influencers and peer recommendations.

In-store enthusiasts with a digital edge: Despite being digital natives, Gen Z still value the in-store shopping experience.
Demand for personalized experiences: Gen Z wants personalized shopping experiences to their tastes and interests.
Flexible payment preferences: This group is economically cautious but appreciates flexible payment options like Buy Now, Pay Later, seeing them as tools for responsible spending and budgeting.

"Gen Z loyalty starts with meeting them on their terms—flexible rewards, exclusive content, and real social impact. Brands that integrate these elements and embody culture in their loyalty programs, will make it easy for Gen Z to see their values reflected in every interaction."

Allie Isaac

Business Value Consultant at Talon.One

Gen Z brand loyalty essential statistics

Only 36% of Gen Z shoppers said they had a strong connection to a brand. (IBM)
85% of businesses are planning to adjust their marketing strategy to accommodate Gen Z’s unique preferences. (Segment)
61% of Gen Zers have positive attitudes toward AI-generated content on social media. (eMarketer)
53% of US Gen Zers want brands they shop at to support mental health causes. (eMarketer)
TikTok and Instagram are the most popular platforms among Gen Z for social commerce. (eMarketer)
73% of Gen Zers are willing to pay more for sustainable products. (CNBC)
GenZ consumers cite trust as a vital factor in their loyalty to a brand. (PYMNTS)

Key strategies to cultivate Gen Z brand loyalty

Research shows that 71% of Gen Zers say, “I’m always open to discovering new brands.” This open-mindedness means they’re willing to consider new options at the start of their shopping journey.

The good news? Businesses can capture their attention with the right approach. The challenge? Inspiring them to keep coming back. The potential is huge, but businesses that hesitate risk falling behind competitors who have already set up solid tactics to capture Gen Z’s loyalty. Here are strategies to use in your loyalty program and engage Gen Z with real impact.

Balance digital strategies with real-world touchpoints

Gen Z heads online for everything—from news to product reviews—before making a purchase. They move seamlessly between sites, apps, and social media feeds, each platform playing its own role in their online ecosystem. To engage them effectively, you need to meet them where they are across their digital world. Make sure to:

Focus on nontraditional channels: For Gen Z, Google’s old news—when it’s time to make a choice, they’re turning to their favorite social media platforms such as TikTok, Instagram, and YouTube for the real scoop.

Gen Z's top 5 most used social media platforms

Image source

Create omnichannel experiences: Gen Zers have grown up in a world where their physical and online lives have merged. Despite their reputation as digital natives, they still value in-person experiences, expecting a smooth transition across channels. To reach them where they're most engaged, create a cohesive experience across mobile, desktop, and in-store.
Add gamification to your loyalty programs: Gen Z’s enthusiasm for gaming highlights their preference for interactive and engaging experiences, and it goes beyond entertainment for many. This means adding elements of gamification to loyalty programs not only makes them fun and engaging but also aligns with their sense of purpose.

NASCAR’s Fan Rewards offers a standout example of a Gen Z–friendly loyalty program. Members can earn points alongside their favorite drivers by watching races, completing challenges, and even visiting tracks.

NASCAR's Fan Rewards exemplifies a Gen Z–friendly loyalty program.

Image source

Create IRL Experiences: Data reveals that 74% of Gen Zers prefer IRL experiences over digital ones. This trend has significant implications for your loyalty offerings. Experiential rewards like exclusive event access, behind-the-scenes experiences, or personalized interactions with influencers cater to Gen Zers’ desire for exclusivity and excitement.

Offer tangible, value-based rewards

It's often overlooked that Gen Z has less disposable income than older generations. This affects their loyalty preferences—and your loyalty incentives.

Instant deals do matter to Gen Z: Unlike their predecessors, they prioritize quick, value-based rewards over earning points for bigger perks. Because they’re price-conscious and value-driven, tangible rewards and personalized discounts via loyalty programs are super effective.
Go beyond basic earn and burn models: Loyalty programs that reward repeat purchases and offer exclusive deals can help retain this value-driven segment. Flexible points systems that adapt to Gen Z’s search for value will be key.
Be agile and flexible: Gen Z is coming of age with a new set of priorities, influences, and tech at their fingertips. Their journey to brand loyalty looks very different from prior generations. To keep them engaged and satisfied, you need a loyalty platform that allows you to customize offers swiftly and respond in real-time. Flexibility in how they can redeem rewards—whether for products, services, or payment offsets— increases program stickiness.

"Tactics like exclusive content, early access to products, or customizable rewards are key to fostering loyalty in Gen Z. Ultimately, the brands that allow Gen Z to shape their own loyalty journey, rather than follow rigid structures, will win their long-term commitment."

Matt Creer

Managing Director at Huge

Respect and reflect their values

Gen Z leans toward brands that genuinely reflect their values, including causes like racial equality and sustainability. Movements like the Global Climate March thrive on their dedication. Supporting initiatives that align with these values isn’t just a moral duty—it’s also a way to build authentic, non-transactional bonds with this purpose-driven generation.

Sustainable initiatives: For Gen Z, sustainability isn’t a choice—it’s an expectation. They look for brands that share a clear purpose and commitment to green practices. To engage Gen Z, loyalty programs must also reflect this ethos, aligning with their environmental priorities. Programs like H&M’s Garment Collecting and Patagonia’s Worn Wear resonate strongly with sustainability-conscious consumers, particularly younger generations.
Community involvement: The secret sauce in securing Gen Zers’ loyalty is making them feel like part of a community. Dubbed “the loneliest generation”, Gen Z values brands that create a sense of belonging for them. By showing up in the community—through partnerships or local events—you strengthen your brand image and build trust with young consumers.

"By integrating loyalty programs and brand-funded incentives, retail media networks can drive smarter targeting, stronger conversions, and deeper customer relationships, turning this high-margin revenue stream into an even greater competitive advantage."