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Creating Loyalty Among Gen Z Customers: What You Need to Know

Millennials get a lot of attention from retailers - and for good reason - but a group that you should be focusing your loyalty efforts on is Gen Z. Often called “Post-Millennials,” they were born between 1996 and 2014, and they’re the first generation who’s had easy access to technology most of their lives and grew up with smartphones and iPads. This differs from other generations like Gen Y or Baby Boomers who came upon tech later in life. The oldest members of Gen Z have already graduated from college, and given that they’re starting to enter the workforce, they will also start to increase their spending power. 

That's why retailers need to adjust their approach to successfully market to these up-and-coming young adults and create loyalty to your brand that will last for years to come. Check out our must-know tips to create loyalty among Gen Z customers.

Rethink Your Approach

Acquiring new customers is anywhere from five to 25 times more expensive than retaining new ones, and increasing customer retention by just 5 percent boosts profits by 25 to 95 percent. Those strong numbers are why most retailers implement a loyalty program, and for good reason.

But when it comes to Gen Z, a loyalty program is not necessarily something that will reel them in. In fact, according to a report published by Ernst & Young, only 30 percent of Gen Z consumers see loyalty programs as a positive thing, and less than half of Gen Z shoppers were influenced to purchase based on a loyalty program. That’s compared to nearly three-quarters of millennials who value those loyalty programs.

For retailers, that means creating loyalty is less about a rewards program and more about how the brand experience aligns directly with their lives. That brings us to the next point.


Your Mission Matters

Despite being young, Gen Z is all about making the world a better place, and they tend to be drawn to brands that follow the same ideas. In fact, a brand showing dedication to social impact is a driving factor when they make purchases for more than half of Gen Z. In addition, 84 percent of Gen Z will actively promote a brand that stands up for something they believe in.

A brand showing dedication to social impact is a driving factor when they make purchases for more than half of Gen Z.

Retailers can commit to making a difference by partnering with organizations or other brands that are known for their social consciences and offering employees volunteer opportunities where they act as brand ambassadors. There are a variety of resources out there that work with brands to drive charitable efforts, environmental awareness, and other positive impacts on the community. 

As a bonus, your brand and business can take comfort in knowing that not only are you reaching your target audience, but you’re also contributing to the greater good. 

Go Mobile

When it comes to getting the loyalty of Gen Z, it’s critical that you go where they are — on their phones. The proof? Gen Z spends twice as much time as Millennials using mobile devices for shopping and converts about twice as much on mobile than any other demographic.

Gen Z spends twice as much time as Millennials using mobile devices for shopping and converts about twice as much on mobile than any other demographic.

They’ve grown up with the convenience of everything being at their fingertips with a constant connection, and they require mobile access to information and offers more than any other generation. This means retailers absolutely must invest in the best mobile-shopping platforms available. If your app can’t close the deal seamlessly, Gen Z will simply go somewhere that can — your competition.

Give Them an Experience

Gen Z shoppers are attracted to stores that have a "vibe" about them, so your store should appeal to as many senses as possible. No matter what you’re selling, focus on the sight, sound, touch, and smell — and make sure that you have music. A quiet store is the quickest way to lose their attention. 

Touch is also a big sense for this generational shopper. While they do a lot on their phones, when they come in-store, they want to be able to interact with the products. They want to try things out and not just look at it. Even smell is important. For example, Abercrombie & Fitch is known for placing their branded fragrance in diffusers at the front entrance. Brand expectations are being set even before shoppers set a foot in their store. 


Be a Good Influence(r)

Much like Millennials, Gen Z lives their life on social media. According to a recent study, Gen Zers say they have increased their usage of Snapchat and Instagram in the past year, 55 and 56 percent, respectively. That’s important for retailers to know, because they deeply value the opinions of their social community, and often seek advice on their purchasing decisions. In fact, 68 percent of Gen Zers read three or more reviews before making a first-time purchase.

68 percent of Gen Zers read three or more reviews before making a first-time purchase.

In order to win their trust, loyalty, and spending dollars, collaborate with their favorite influencers to connect your retail brand to them in a way that makes sense. It has to be authentic in order to make a valuable impression, so make sure the influencers you partner with are creating content that is a natural extension of your brand. 

The Final Word

This generation is smart, and that means retailers have to make smart decisions when it comes to creating loyalty. Retailers have to embrace the new shopper that is coming in their store, and the best ways they can be reached. Don’t be afraid to test new ideas, as Gen Z'ers also don’t need perfection. They like the process and will reward you for your efforts with their loyalty. 

If you’re looking for ways to strengthen your brand and increase store traffic – whether online or offline – visit ASD Market Week’s over 100 free educational sessions and learn how to improve your retail business! Begin by registering for ASD for FREE today.


Written by Nicole Leinbach Reyhle of RetailMinded.com. Select images courtesy of pexels.com.


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