Gen Zers Are Redefining Brand Loyalty



Currently, Millennials are one of the world’s largest demographic for retailers around the world with a huge consumer base, versus their Generation X predecessors. The Millennial generation accounts for 27 percent of the global population, or about 2 billion people.


Just as Millennials overtook Gen Xers, there’s another big buying group taking the lead for retail and consumer dollars – Generation Z. Born between the mid-1990s and mid-2000s, Gen Zers account for nearly 7 million Canadians, which translates into a significant chunk of buying power. The way they shop, though, is very new and different from other demographics, and those whose success is contingent on driving brand awareness will want to pay attention.


According to a new study on Generation Z, “Gen Z Brand Relationships” by the National Retail Federation and IBM’s Institute for Business Value, members of Generation Z are “digital natives” who cannot remember what it was like not to have access to the Internet, no matter when, no matter what, no matter where. The study is based on research from more than 15,000 consumers aged 13 to 21 from 16 countries and looks at how Gen Z engages with brands.


Generation Z expects brands to be transparent and authentic. Distinctive and disruptive, these young people wield influence far beyond their wealth and experience, and they have redefined loyalty as we traditionally know it. To attract this generation and build loyalty, brands must provide opportunities for engagement and co-creation, and demonstrate they are trustworthy as well as relevant. Here’s what brands must know to win them over.


Quality matters

To create a brand connection requires quality products and services, and active engagement. Quality was identified by 66 percent of respondents as the most important attribute. Further, 66 percent also said that, once they find a brand they like, they will continue to buy for a long time.


Generation Z wants to engage

Generation Z indicates they want to contribute and have an active role in brand engagement. Almost half – or 44 percent – of those surveyed would submit ideas for product design and 43 percent would participate in a product review. Further they are interested in how brands can gamify an experience, with 42 percent interested in participating in a game as part of a retailer’s campaign.


Interaction and transparency are key, yet brands are falling short

To build a successful relationship with Gen Zers, brands need to gain their trust by being transparent and allowing them to feel in control. In our study, 60 percent of Gen Zers said it is important that brands value their opinions. Further, 55 percent want to have control over what information to share, and 54 percent want to have control over how brands contact them.


Gen Zers share opinions in different ways, and when they do provide feedback, they are, on average, twice as likely to share positive feedback as to complain.


However, brands have failed to make the necessary or proper engagements. Almost half of Gen Zers surveyed indicated that they either didn’t get a response from the brand they contacted or were not satisfied or neutral about the interaction they did get.


One size does not fit all

Although it is the first truly digital generation, it is a mistake for retailers to view this group as an equal and connected collective. Gen Zers are as uniquely individual as members of past generations in their priorities for choosing brands.


Gen Zers from growth economies have a different range of priorities from their counterparts in mature markets. For example, 62 percent said they value brands they consider to be “cool and fun”, while 55 percent make it a priority to choose brands that are eco-friendly and socially responsible. They are also significantly more likely to believe their favourite brands understand them as individuals.


With the list of these new generation of shoppers’ expectations growing, the question is: are retailers prepared? With such information always at their fingertips, both Millennials and Gen Zers can consistently find something else available.


Retail businesses have ample opportunity to cultivate a culture of innovation so they can more readily prototype emerging technologies, such as the Internet of Things, cloud and AI. This will create more compelling customer experiences through better engagement and co-creation.


Forward-thinking retailers should use these new technologies to create a personalized, interactive experience if they hope to serve this “always on”, mobile-focused, high-spending demographic.

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