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Generation Z Brand Loyalty: Is It a Myth?

This is an archived post from OrderDynamics, now Tecsys retail division.
Generation Z Brand Loyalty: Is It a Myth? Another disruption in retail? This is not something new at all. But this time it looks like the disruption might not be due to something, but rather due to someone. That someone is Gen Z. It feels like almost overnight, everyone’s attention have shifted from Millennials to Generation Z. Omnichannel retailers are asking: How do I get my share of their almost $44 billion spending power?  But with 81% of Gen Z saying that they will switch from their favorite brand if they find a product of similar or better quality, is Generation Z brand loyalty really a possibility? Born from 2000 onward, Gen Z are the first true digital natives. And having all this access to the digital world makes them significantly unique.  A Fitch report on Gen Z Shopping, probably put it best: How do you get them to engage, when they pay less attention, yet with a sharper and hyper informed eye?

 Gen Z Shopper Profile

To start off on the question of loyalty let’s create a simplified shopper profile for them. There are three main factors to consider: Impatience, Resource Conscious and Experience Driven. As digital natives, Gen Z is extremely impatient. Do you remember the days when you had a question and couldn’t immediately look it up on Google? Well, Gen Z definitely cannot remember such a time. And this impatience affects all other areas of their interactions. Gen Z has also had to grow up exceptionally quick. Between the recession, terrorist acts and other well-published world events, they certainly did not have the helicopter parenting of the Millennials. Which means that not only are they price conscious but they are very resource conscious. They are aware of the impact they have on the world and take their responsibility to make a difference seriously. This could be an interesting appeal position which retailers may want to leverage. Lastly, for Gen Z it is less about owning things and more about experiences. They often want to be able to see and touch things, before they buy it. Which leads to 64% of Gen Z still preferring to shop in-store versus shopping online.    

So Will Traditional Brand Loyalty Methods Work?

So with that shopper profile in mind, will the older methods of building brand loyalty still work? For Generation Z brand loyalty, this may not be the case. In a report released by EY, research shows that traditional loyalty programs, cards, and promotions only affects 30% of Gen Z’s decision to use a brand compared to 45% of Millennials. Moreover, with Gen Z being more price and resource conscious, they will not spend on a brand, just for the brand's sake.  And they are not afraid to shop around for the best quality and price. So how do you get Generation Z brand loyalty then?

Building Generation Z Brand Loyalty

So what will work? Once again, there are three key things that could help make sure that Gen Z becomes loyal to your omnichannel retail store. The most important of these is being able to give them a seamless experience. As true digital natives, Gen Z does not make a conscious distinction between the physical and digital. And if their retail experience at your store is not consistent across all the channels, they will not have the patience to shop there. Even though they are digital natives, and their natural inclination will be to research potential purchases online, Generation Z is experience driven. And as such, they love to see and touch what they are purchasing, before they buy it. But if you cannot show them what you have in store when they are doing the initial research, then they will go to your competitor who is showing them. Lastly, showing them that they are part of the solution, is also very important to Generation Z. As mentioned in the shopper profile, they are very responsible, and had to grow up quickly. If you can make them feel like they are playing their part in making the world a better place, it will go a long way to winning Generation Z brand loyalty. To do that, you need to give them options, like pick up in store, or even shipping from the closest store to them. Encourage these options as both a means to address their instant gratification desires (get it now), the option of saving on shipping charges, and helping do their part for the environment. If their parents will pass by the store en route to another destination, why not drop in to pick up that item, instead of using more delivery services. It is a triple win, that will save the environmental cost and your retail shipping costs.

So Is It a Myth?

No, Generation Z brand loyalty is not a myth. But gaining that loyalty is not easy. And if your omnichannel retail is not evolving and adapting at the hyper speed desired by Gen Z, then you will not keep them as customers. Giving them what they want, where they want it and in the way they want it, will ensure that you can get your share of their spending power. Author: Carla van Deventer recently joined OrderDynamics as their Marketing Coordinator. With a background in corporate communication and events, she is excited to take on the retail technology marketing world.         Related:   
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