Gen Z consumers want to be awarded points for walking into a brand's location.
This was according to “Loyalty Research: Gen Z, Millennials and Beyond,” a study from CrowdTwist, which revealed that 87% of digital natives want omnichannel loyalty programs from retailers, restaurants, and gyms. A majority (77%) of this demographic is also willing to pay a premium to participate if they will be rewarded with valuable perks like free shipping (for example, Amazon Prime). The Silent Generation (those born 1945 and earlier) was the only group where the majority (55%) answered no to paying a fee for a loyalty program.
Gen X participates most in loyalty programs with 82% of these consumers responding that they are active in at least one loyalty program. They also redeem more than other generations, as 77% of Gen X program members redeem rewards at least once a quarter. The least active group is the Silent Generation, with 35% responded that they don't participate in any loyalty program.
Loyalty programs provide brands with younger target audiences a competitive advantage. For example, 72% of Gen Z and Gen X respondents said that they could be persuaded to choose one brand over another due to the presence of a loyalty program. This is followed by 68% of Millennials, 56% of Baby Boomers, and 42% of the Silent Generation.
However, there has been a decline in brand trust. Only 46% of Gen Z consumers and 55% of Millennials (the most trusting generation according to this year's research) are willing to share their data in exchange for personalized experiences. The biggest skeptics are members of the Silent Generation, as only 21% said they were willing to share personal information in exchange for personalized experiences.
One issue that could be taking a toll on trust is a lack of brands' personalization efforts. The majority of consumers want a personalized experience, with 70% of Gen Z respondents, 64% of Gen X respondents, and 63% of Millennials expecting to receive personalized recommendations via an app while browsing in-store.
However, many brands’ current personalization efforts are missing the mark. Only 42% of Millennials, 37% of Gen X consumers, 33% of Gen Z consumers, 29% of Baby Boomers, and 23% of the Silent Generation have purchased something that was recommended to them by a brand in the past six months. This is indicative that brand execution utilizing predictive analytics, while growing in popularity, is not meeting full potential, the study revealed.
“This insight is helpful for brands to understand where opportunities lie in engaging different consumer groups, and how to remove barriers and frustrations and demonstrate an understanding of who their customers are,” said Scott Matthews, CEO of CrowdTwist. “Participation in loyalty programs remains high and has the potential to influence brand selection, but it's evident that there are opportunities for brands to create better value."