Gen Z shoppers are making a big splash this January, ready to spend an estimated AUD $1.3 billion during the sales and averaging $261 each. But, before brands get too excited, they need to understand the art of winning Gen Z’s loyalty.
This generation is notoriously discerning, and brands must tread carefully—while red flags like bad data practices or bombarding them with emails can quickly send them swiping left, green flags such as authenticity, personalisation, and strong digital connections can have them swiping right and sticking around for the long haul.
New research from SAP Emarsys digs into what makes Gen Z tick, offering a roadmap for brands to connect with this influential demographic while avoiding costly mistakes. It’s a game of loyalty—and the stakes are high. However, winning the loyalty of this influential demographic requires brands to navigate a fine line between success and failure. Red flags—such as mishandling personal data or overwhelming customers with excessive marketing—can alienate Gen Z and push them toward competitors. On the other hand, green flags, including personalisation, authenticity, and strong digital engagement, can secure their loyalty and boost long-term business growth.
New research from SAP Emarsys highlights what it takes for brands to resonate with Gen Z, providing actionable insights into fostering meaningful connections and avoiding costly mistakes.
Why Gen Z loyalty matters
With 68% of Gen Z reporting that they are loyal to brands they consistently engage with, the stakes for securing their favor are high. This generation’s loyalty translates into repeated purchases and brand advocacy. Yet, their allegiance is far from unconditional. Brands must meet their expectations, align with their values, and avoid critical missteps to remain relevant.
Red flags that push Gen Z away
Gen Z is quick to disengage when brands fail to meet their standards. According to SAP Emarsys, the top “red flags” that drive them to competitors include:
- 32%: Mishandling personal data. Trust is paramount for Gen Z, and privacy concerns can quickly erode confidence.
- 31%: Overwhelming customers with excessive marketing communications. A barrage of emails, texts, or notifications is seen as intrusive.
- 24%: Charging for returns. Free and hassle-free returns are now considered a baseline expectation.
- 17%: Failing to reward long-term customers. Gen Z values recognition for their loyalty and expects brands to reciprocate.
- 8%: Neglecting to personalise the shopping experience. Generic interactions feel disconnected and impersonal to this cohort.
Green flags that foster loyalty
While certain missteps can drive Gen Z away, brands that excel at understanding and meeting their expectations are rewarded with loyalty. Key “green flags” include:
- 42%: Downloading and actively using a brand’s app. High-quality, user-friendly apps keep Gen Z engaged and immersed in a brand ecosystem.
- 49%: Demonstrating relatability and being “iconic” on social media platforms. Authenticity and creative engagement on social channels resonate strongly with this group.
- 26%: Offering memorable, value-added experiences such as personalised events, services, or exclusive perks.
- 20%: Partnering with relatable influencers and celebrities. Collaborations with figures who share Gen Z’s values and lifestyle enhance credibility.
- 15%: Using AI-driven tools to improve the shopping experience, from personalised recommendations to seamless customer service.
Additionally, 28% of Gen Z report increased loyalty to brands that prioritise personalised interactions. Tailored experiences make customers feel understood and valued, creating deeper emotional connections.
Sara Richter, CMO at SAP Emarsys, explains:
“Personalisation empowers brands to create value for Gen Z wherever they are—on their phones, engaged, and eager for experiences that feel tailored to them. By understanding individual preferences and acting on them in real-time, across multiple channels, brands can create the kind of loyalty that lasts.”
For consumer goods brands, personalisation isn’t just a buzzword—predictive AI makes personalised offers in real time – and is a proven way to turn Gen Z shoppers into loyal customers. With SAP Emarsys’ customer engagement platform, brands can deliver tailored recommendations, exclusive offers, and the best experience across every channel.
PUMA’s partnership with SAP Emarsys shows how brands can drive life-long loyalty. Using AI-driven insights, PUMA personalises customer journeys across its direct-to-consumer platforms, in-store experiences and third-party channels. Particularly significant for Gen Z, by bridging content and commerce through TikTok shoppable videos, PUMA enables younger audiences to shop without interrupting their browsing experience.
With Gen Z poised to drive $1.3 billion in spending during the January sales alone, consumer goods brands have an enormous opportunity to capture their loyalty and boost long-term growth. By focusing on avoiding red flags, delivering green flags, and leveraging personalisation, brands can position themselves as the go-to choice for this powerful demographic.
For more insights into true loyalty, download the SAP Emarsys Customer Loyalty Index at www.emarsys.com.
Gen Z is ready to spend big, but brands need to avoid red flags and hit the green ones to win their loyalty. News, genz Dynamic Business