Loyalty is Royalty: How to Capture the Gen Z Audience

In the fast-paced retail environment of today, customers have endless choice both offline and online, it can be hard for retailers to entice the always-on Generation Z when there is so much competition out there and they are exposed to so much chatter from retailers.

But it’s not only the increased competition from other online and offline retailers, Kobie Marketing also explains that there are now more customer touchpoints than ever before – giving rise to a fragmented customer journey (Kobie, 2018). Gen Z are multichannel shoppers, they move from one channel to the next hitting various touchpoints along the way, so it’s important that your loyalty schemes are easily transferable from online shopping to in-store. Attracting Gen Z to your store definitely requires an online presence. According to online marketplace, Down Your High Street, “Lots of people prefer to shop local, but convenience means they go to bigger stores.” Ensuring your operation is omnichannel, online, in-store and even on social, will all help to attract Gen Z and keep them coming back.

Our latest consumer data research with YouGov, asked Generation Z (18-24 year olds) what they want from loyalty schemes and the results were quite surprising. Gen Z are a generation that appreciate a good deal and enjoy knowing that they have received value for money.

“Despite their age, Gen Z are more akin to their grandparents than they are to Millennials when it comes to money. They are hardworking and value financial stability and witnessed their parents in the recession”
Angie Read, 2018

Their top incentive to sign up to a loyalty scheme is discounts with 75% of Gen Zers selecting this option. This is in comparison to only 18% who said that VIP events (e.g. launch parties, masterclasses, celebrity signings etc) would encourage them to sign up.

Loyalty schemes are a great way to add that personal touch in this tech-heavy world we live in. Gen Z like to feel as though they are connected to brands and are cautious and sceptical when choosing which brands they want to support. So, creating a sense of community with this generation through a loyalty scheme, is great way of retaining this influential consumer segment.

Each generation from Baby boomers, to Generation X, to Millennials, to Gen Z, will use loyalty schemes differently. Baby boomers are more likely to want a physical loyalty card to keep in their purses, compared to Gen Z and Millennials who may prefer an app which they can use online and show at the till in-store. 35% of Gen Z would like it if they could view and redeem their offers/discounts on a mobile device.

“Gen Z and Millennials are more likely to join mobile app programmes than their Baby Boomers and Generation X counterparts”
Kobie Marketing, 2018

Our research did find, however, that all generations are bound by a love for discounts, and who can blame them, who doesn’t love a bargain! But although flashy PR gimmicks may work for other generations, you better think twice about investing in such things for Gen Z. VIP pre-launch access to stock or sales and personal recommendations based on their purchase history, both were voted only 22%. They do not offer instant value-for-money and so Gen Z are really not enthused by such offers in return for their loyalty.

“Despite expecting to see dramatic differences between the Millennials and Generation Z, the results were actually very similar. The only instances where there where differing results was when comparing the answers of over 55’s to Generation Z or Millennials”
Ian Tomlinson, CEO, Cybertill

So in order to point retailers in the right direction we have created our top 5 Tips for Cracking Loyalty with Gen Z!

5 Tips for Cracking Loyalty with Gen Z

1. Make it an easy sign-up process – Ask them at the till if they would like to sign-up, grab their email address, send them a link and you’re done! No long-winded paper-based sign-up process
2. Offer real value in return for their loyalty – We all know that customers love a bargain and Gen Z are no different, 75% want discounts and 67% want points that equal money to spend in-store
3. Steer clear of gimmicks – Gen Z will see straight through this, only 22% liked the ides of VIP launch parties and events in return for loyalty
4. Show them you care – Thank them with emails and special offers, reward them for their continued loyalty
5. Offer personalised promotions – 39% of Gen Z want promotions based on their purchase history

References:

Kobie Marketing, 2018, Loyalty in the age of the Connected Consumer [Available Online]

Angie Read, 2018, Marketing to Gen Z: The Rules for Reaching This Vast and Very Different Generation of Influencers