Study: Gen Z shows caution toward loyalty programs
- Generation Z, loosely defined as people born after 1996, are less likely to join customer loyalty programs than other generations, according to a study by loyalty experience firm Kobie shared with Mobile Marketer. About two-thirds of Gen Zers belong to one or two loyalty programs, while majorities of millennials (55%) and Generation Xers (64%) belong to three or more.
- Gen Zers are reluctant to join loyalty programs for a variety of reasons, with almost half (40%) of this segment surveyed saying the programs require too may purchases to earn rewards or to redeem points. Another 33% don’t want to pay a fee to join a program, 28% say the enrollment process takes too long and 25% don’t see any benefit from joining.
- The cohort prioritizes technology that understands their preferences and behaviors over less invasive and annoying technology, preferring personalized experiences and birthday discounts to push notifications and excessive emails.
One of the most interesting findings in the Kobie report is that 28% of Gen Z — a higher percentage than the other generations surveyed — is reluctant to join loyalty programs because they don’t want to give up too much personal information. At the same time, they are willing to share their personal information with brands who use it well. To reach Gen Zers, brands must walk a tightrope, providing intimate experiences without being seen as creepy. For example, Kobie contrasts Netflix using data to personalize recommendations versus using personal data in a social media post.
The group’s familiarity with mobile technology is a defining characteristic not seen with older groups and makes them a good audience on certain platforms. According to the study, 20% of Gen Z, compared with less than 6% for prior generations, is very open to receiving information from brands on YouTube. The generation has grown up watching online celebrities and social influencers on YouTube, and 50% say “they can’t live without it.” Plus, they are more likely than any other generation to use Google to find products to purchase, rather than directly connecting with a retailer or brand. Almost two-thirds (60%) of Gen Z consumers said they used Google for their last purchase, demonstrating the power of the search engine to completely dominate what they see and do.
Still, Generation Z remains somewhat enigmatic because the group consists of young people who are still experimenting with their spending power and exploring various media platforms, to say nothing of Gen Zers who are not yet active buyers.