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The retail industry faces massive transformations and challenges with Gen-Z consumers. These zero-loyalty consumers are upending the traditional customer loyalty narrative as they only want the lowest prices and instant delivery with no strings attached. McKinsey says that they “skimp and splurge” at the same time.
This shift presents a dilemma to brand development: how can brands devise a loyalty strategy that goes beyond the transactional and expresses a deep, meaningful relationship with these young consumers? How do you construct such a loyalty marketing plan to convert zero-loyalty customers?
Read on to find out.
Gen-Z shoppers want positive buying experiences. 52% say that they switched brands due to lousy shopping experiences, according to a SAP Emarsys 2023 Customer Loyalty Index report.
A survey by Oracle 2020 also reflects the same view, showing that 66% of GenZ wished to get personalized suggestions from an app when buying products in-store.
Jai Rawat, CEO at Zinrelo, puts it this way: if you want to receive data, you have to offer some form of value to your customers in exchange for the data. Loyalty programs can elevate the value you offer.
Easy Jet used their customers’ data to generate personalized journeys for individual fliers, showing their flying history with the company over the last two decades. The emails were enthralling, dynamic, and full of images and links.
By the end of their campaign, EasyJet saw a 100% higher open rate and a 25% higher click-through rate than their average newsletter.
Gen-Z shoppers align their purchasing decisions with personal values, primarily social responsibility and sustainability. A 2020 report by First Insight shows that 73% of GenZs don’t mind digging deeper into their wallets for sustainable products.
This shift has prompted companies like TOMS to donate a portion of their profits to support social campaigns like improving mental health and ending gun violence.
Other brands are now spearheading initiatives such as offering customers incentives for buying eco-friendly products. For example, Marks & Spencer's charitable contributions and Procter & Gamble’s Good Everyday program show the value of aligning customer rewards with social good.
While transactional-based incentives based on rewards may have worked for boomers and Generation X, Gen Z is a tougher nut to crack. Gez Z and millennials before them prefer splurging money on experiences like limited edition products or VIP access rather than discounts.
Even more interesting is the fact that 70% of Gen Z belong to one or more premium loyalty programs. This shows that they anticipate better treatment and greater value when they purchase a service.
For instance, Sephora launched a beauty insider program offering exclusive rewards such as limited edition products, early access to their latest products, and more to build a fandom among Gen Z, who treasure such experiences.
Up to 60% of Gen Z play mobile or video games at least once weekly. Brands can boost customer loyalty with Gen Z by offering gamified loyalty programs.
One study revealed that businesses that include gamification in their loyalty program register a 47% increase in customer engagement. When you spend money on a brand, and they return the favor by giving you a fun premium, you are more likely to feel motivated and repeat the purchase.
A McKinsey report showed that businesses that offer gamification in their reward scheme notice an 11% uptick in customer satisfaction.
Gen Z shoppers account for a massive $359 billion in spending power in the U.S. alone. However, their erratic and dynamic buying patterns complicate efforts for brands deploying loyalty programs.
However, with the above marketing strategies, businesses can turn things around and build sustainable loyalty among younger consumers.
The retail industry faces massive transformations and challenges with Gen-Z consumers. These zero-loyalty consumers are upending the traditional customer loyalty narrative as they only want the lowest prices and instant delivery with no strings attached. McKinsey says that they “skimp and splurge” at the same time.
This shift presents a dilemma to brand development: how can brands devise a loyalty strategy that goes beyond the transactional and expresses a deep, meaningful relationship with these young consumers? How do you construct such a loyalty marketing plan to convert zero-loyalty customers?
Read on to find out.
Gen-Z shoppers want positive buying experiences. 52% say that they switched brands due to lousy shopping experiences, according to a SAP Emarsys 2023 Customer Loyalty Index report.
A survey by Oracle 2020 also reflects the same view, showing that 66% of GenZ wished to get personalized suggestions from an app when buying products in-store.
Jai Rawat, CEO at Zinrelo, puts it this way: if you want to receive data, you have to offer some form of value to your customers in exchange for the data. Loyalty programs can elevate the value you offer.
Easy Jet used their customers’ data to generate personalized journeys for individual fliers, showing their flying history with the company over the last two decades. The emails were enthralling, dynamic, and full of images and links.
By the end of their campaign, EasyJet saw a 100% higher open rate and a 25% higher click-through rate than their average newsletter.
Gen-Z shoppers align their purchasing decisions with personal values, primarily social responsibility and sustainability. A 2020 report by First Insight shows that 73% of GenZs don’t mind digging deeper into their wallets for sustainable products.
This shift has prompted companies like TOMS to donate a portion of their profits to support social campaigns like improving mental health and ending gun violence.
Other brands are now spearheading initiatives such as offering customers incentives for buying eco-friendly products. For example, Marks & Spencer's charitable contributions and Procter & Gamble’s Good Everyday program show the value of aligning customer rewards with social good.
While transactional-based incentives based on rewards may have worked for boomers and Generation X, Gen Z is a tougher nut to crack. Gez Z and millennials before them prefer splurging money on experiences like limited edition products or VIP access rather than discounts.
Even more interesting is the fact that 70% of Gen Z belong to one or more premium loyalty programs. This shows that they anticipate better treatment and greater value when they purchase a service.
For instance, Sephora launched a beauty insider program offering exclusive rewards such as limited edition products, early access to their latest products, and more to build a fandom among Gen Z, who treasure such experiences.
Up to 60% of Gen Z play mobile or video games at least once weekly. Brands can boost customer loyalty with Gen Z by offering gamified loyalty programs.
One study revealed that businesses that include gamification in their loyalty program register a 47% increase in customer engagement. When you spend money on a brand, and they return the favor by giving you a fun premium, you are more likely to feel motivated and repeat the purchase.
A McKinsey report showed that businesses that offer gamification in their reward scheme notice an 11% uptick in customer satisfaction.
Gen Z shoppers account for a massive $359 billion in spending power in the U.S. alone. However, their erratic and dynamic buying patterns complicate efforts for brands deploying loyalty programs.
However, with the above marketing strategies, businesses can turn things around and build sustainable loyalty among younger consumers.
