Generation Z Consumers are Establishing Their Own Brand Loyalty. Even across all age groups, it’s evident that consumers today are loyal to only a few brands, but this becomes more pronounced among younger consumer groups.
Various studies conducted in recent months indicate that Generation Z consumers are loyal to five or fewer companies in total («Winning Gen Z through Exceptional Customer Service» by Taldesk). They also report that almost a third of them admit to becoming loyal to a new brand in recent months.
From a brand’s perspective, we can view these statistics as both an opportunity and a challenge to earn the loyalty of these consumers.
In this article, we will get to know this group of consumers better and analyze how brands can connect with them and build their loyalty.
What Is Generation Z? Birth Years
Generation Z is also known as post-Millennials, iGen, Zillennials, or centennials. It refers to the demographic group that follows the so-called millennials or «Generation Y.» Generation Z encompasses those born between the mid-1990s and the early 2000s.
More specifically, it includes individuals born between 1995-1997 and 2010-2012, although there is no real consensus on these boundaries.
To clarify, Generation Z was born with the new millennium and falls between the Millennials or Generation «Y» and the so-called «Alpha» generation. Furthermore, it is the largest generation since the «Baby Boomer» generation.
What Are the Characteristics of Generation Z?
Generation Z is characterized by being different from other generations, both preceding and following it. Although it is often identified by its close relationship with technology, many find it to be the most misunderstood generation in history.
They are referred to as digital natives because they are the first generation to grow up with fully developed technologies such as social media, smartphones, and instant access to information.
For them, instant messaging and social media are their primary means of communication, surpassing traditional media, and they prefer texting over phone calls.
Their vocabulary is filled with acronyms, often borrowed from the English language, and emojis are an integral part of their communication.
Additionally, this generation is characterized by their concern for environmental and social issues.
They have grown up in an environment that encourages entrepreneurship and have a strong sense of social responsibility.
After this overview, let’s analyze how their characteristics also influence their consumption preferences and choices.
Generation Z and Brands
For Generation Z, there are two essential things to establish and maintain loyalty to a brand: the ability to easily and conveniently resolve their service-related issues and the opportunity to discuss their concerns and priorities beyond just customer service.
The ever-changing preferences of Gen Z for developing relationships and engaging with brands compel brands to have an authentic and cohesive omnichannel support strategy.
Members of this generation do not put much thought into channel preference and expect to interact wherever they are to get what they need.
How to Attract Generation Z?
Building loyalty requires investment. The digital environment is the ideal medium: consumers are present online, and it provides resources for a constant presence and customer service focus across various digital platforms.
Generation Z is accustomed to interacting with companies through a wide variety of different service channels. Emerging customer service technologies like Artificial Intelligence and applications like virtual chats do not deter them.
The key to the connection between brands and customers largely lies in the customer experience they receive. Therefore, it makes sense for Generation Z to have omnichannel strategies and self-service options with applied intelligence.
For this group of consumers, speed and convenience are essential factors. Therefore, the development of Artificial Intelligence can be crucial. Data shows that 78% of centennials have used virtual chats at some point, while in the case of baby boomers, this figure drops to 38%.
In addition to the digital experience, as previously mentioned, this generation has a strong commitment to social and environmental issues. They act accordingly with regard to brands: they expect brands they consume to address the issues that matter to them and have a purpose.
The data supports this: 46% of Gen Z consumers stopped buying from a company last year due to its stance on social and sustainability issues, compared to only 22% of Baby Boomers.
In their buying habits, they are also used to purchasing directly from brands. The Capgemini Research Institute study, What Matters to Today’s Consumer, reveals the significant impact of the pandemic on consumer behavior and preferences.
More than two-thirds (68%) of Generation Z has purchased products directly from brands in the last six months, compared to an average of 41% across all age groups: only 37% of Generation X buyers and 21% of Baby Boomers.
Additionally, among those who have purchased directly from brands, nearly two-thirds (60%) mention that one of the reasons for doing so was a better shopping experience, and 59% mention access to brand loyalty programs.
Generation Z is willing to share their personal data in exchange for benefits.
Almost half (45%) of all shoppers are willing to share data on how they consume or use products, and over a third (39%) are willing to share personal data such as demographic information or product preferences.
However, 54% of all shoppers say that offers and/or discounts would increase the likelihood of sharing their data directly with brands.
So, we cannot deny that this represents a significant opportunity for consumer product brands. Here, there is a chance to create a direct relationship channel with these consumers, conduct trend research, adjust offerings according to demand, seek personalization methods, and improve the customer experience.
Adapting Brands to Generation Z’s Consumption Trends
How can companies adapt to these centennials’ consumption trends and build relationships with them?
We can identify four essential points:
- Collect and analyze consumer data directly to personalize new products and services for specific customer segments.
- Develop an omnichannel strategy that encompasses the entire buying cycle.
- Enhance the customer experience throughout the entire buying cycle: acquisition, delivery, distribution, customer service, and more.
- Pay attention to sustainable product development strategies.
How We are Testers Can Help Conquer Generation Z
Everything we’ve analyzed aligns with the work we do at We are testers.
Our tools are specifically designed to facilitate and deepen the relationships between brands and their consumers. Our work is based on in-depth knowledge and obtaining information and data that help brands create their strategies, backed by research and testing.
We are testers can help brands understand the concerns, needs, and desires of their consumers, even within specific target groups. This enables brands to respond, adjust or modify products, create new products or services, or simply tailor their approach to these consumer niches.
We offer tools like WAT Suite, which incorporates various analysis methodologies. It allows for quantitative, qualitative, and UX research.
Therefore, a brand could, for example, conduct a survey among Generation Z individuals or even create an online community composed of people from this group to analyze a specific product or service.
Research conducted about them, but especially with them and for them. The rich resulting information will undoubtedly help the brand develop actions and strategies focused on improving the relationship with this group of customers and providing better service. As a result, the relationship between both parties will strengthen, and the brand can achieve the desired loyalty from these types of customers.
Need to deeply understand Generation Z? Contact our experts to help design your market study.
Update date 22 November, 2023