Here’s what drives Gen Z purchases and loyalty
A new survey reveals how brands can incentivize Gen Z consumers to buy their products and join their loyalty programs.
More than 40% of Gen Z consumers said they like both an "occasional 20% discount" and "10% off every purchase, according to a new survey of U.S. and U.K. Gen Z consumers from identity verification technology provider SheerID. Hwever, when asked what kind of exclusive offer would be appealing, 60% of respondents stated free shipping and 52% of respondents said a free gift.
The survey also asked respondents how a retail brand can get their attention in the current economy. Nine-in-10 (91%) of respondents who are college students said they research exclusive brand discounts before making a purchase.
In addition, 86% of college student respondents and 69% of respondents overall indicated an exclusive offer would increase the likelihood of a purchase. Exclusive offers outperformed other tactics to drive purchasing such as buy-now-pay-later financing, longer return times, and better customer service.
When respondents were asked what types of products they would most likely purchase if a brand offered them a Gen Z discount, take-out/food delivery was the most popular option (47%). Apparel (42%), beauty/personal care (40%), gaming (39%) and electronics (39%) rounded out the top five.
Gen Z loyalty drivers
Looking at how brands can drive loyalty program participation among Gen Z respondents, the survey found that 29% of all respondents and 40% of college student respondents said they would switch their loyalty from one brand to another if they were given an exclusive discount.
In addition, 68% of all respondents and 73% of college student respondents would be more likely to join a loyalty program in exchange for receiving a discount. Fifty-six percent of all respondents and 73% of college student respondents also stated that they feel more emotionally connected to brands that give them an exclusive offer.
How Gen Z learns about brands
According to the survey, social media is the number one way Gen Z consumers learn about brands, with 68% of all respondents 77% of college students respondents learning about a new brand through platforms such as Instagram, Tiktok and Snapchat.
In addition, nearly half of college student respondents learn about new brands through a recommendation from a friend or family member.
[Read more: EXCLUSIVE: Adobe survey reveals Gen Z's marketing content preferences]
Worries about the economy impact Gen Z spending
Only 30% of all respondents and 22% of college student respondents are optimistic about where the economy is headed relative to a year ago. As a result, 71% of college student respondents plan to actively stretch their budgets and seek discounts.
When asked how the current economy has changed their spending habits, groceries and mobile phone/wireless were the only two categories where respondents spending more than they have in the past. Take out/food delivery, gaming, and electronics, experienced the greatest pullback in spending, with 36% or more of respondents saying they are spending less in these categories.
Brand communication preferences
Perhaps surprisingly, email (48%) was the number one choice among respondents when asked how they would like to hear from brands about Gen Z offers. Text/SMS (46%) was the second most popular form of communication, followed by social media (43%), online ads (24%) and a brand’s website (18%).
Fielded by Centiment on behalf of SheerID March 1-14, 2024., the survey’s respondents included a total of 1,761 people aged 18 to 26 (“Gen Z”) from the U.S. and the U.K., half of whom are currently enrolled university students.