Gen Z is the new generation of adults. We can’t get enough. They communicate and work in new ways. They are shopping, spending, eating, and drinking differently. They are open-minded, diverse and opinionated. They even are starting to run for political office. They are fascinating and they are proving to be very popular. They were recently studied as part of our shopper Influence research. We uncovered insights from 6000 recent buyers in six product categories in the U.S. about brand loyalty and buying behaviors that can be used to help marketers and brands navigate this diverse group.
One of the best ways to get to know Gen Z is by observing how they behave with brand loyalty. Brands have constantly closely monitored familiarity and awareness metrics. These metrics are losing their relevance among Gen Z, a group that doesn’t want to give up the past. Our data shows this. Millennials and Gen X agree in this regard. The baby boomers are the last to be loyal to specific brands. Even the youngest consumers are looking for innovative, consumer-centric brands and experiences that can be compared to traditional offerings.
However, we found that about half of our consumers were brand loyal. This may sound promising for brands who rely on this metric to be successful, but it doesn’t reflect the stark differences between Gen Z and other generations. My generation, the percentage of loyal shoppers (what we refer to as “loyalists”) drops dramatically. Only 37% of Gen Z were loyalists, defined as people who purchased a product from the same brand they were looking at when they started their shopping journey. This is very different from the 56% of boomers who did this. Each generation showed a steady decline in loyalty.
As this latest powerhouse generation grows up with their lack-of-brand-loyalty mindset, here are three things you need to remember about Gen Z when planning your product development, marketing, and market research strategies.
1. They are digital natives: Gen Z has always had the option of shopping online. This generation did not have to adapt to a new reality like the generations before. This is their norm, and it will remain so for future generations. The prospective shoppers have been forever changed by digital accessibility, and it has contributed significantly to brand loyalty. It would support if you kept this in mind when planning your marketing and selling strategies. Make sure to include a robust digital component.
2. They do more research. Our research revealed that younger e-commerce shoppers, men, and those with higher incomes do more research before purchasing. Gen Z was not far behind with 19 searches. Millennials had 23 sources, while Gen Z had 19. According to our survey, 80% of the shoppers we surveyed use online sources before they make a purchase decision in any of our categories. To reach your younger target audience, you must be present and communicate your messages to various places.
3. They shop based on their values. Most of the shoppers who participated in our research stated that the products they purchase reflect their values, beliefs, and personality. Also, younger shoppers are more likely to see their purchases as a way to understand themselves and what is important to them. This is 68% for Gen Z and millennials. Only 43% of boomers agree. Our data suggests a consistent trend. Younger generations are more inclined to link their purchases to a company’s real-world social impact. These people are interested in everything, from ethical manufacturing practices to the treatment of employees to eco-friendly initiatives to sustainability. Take a look at how your company addresses these issues.
Although brand loyalty may not be as standard in the traditional sense, it can reach younger audiences effectively. Market research by individuals should be consumer-centric. Don’t rely on brand loyalty metrics for decision-making. Understanding how the digitally-native generation differs from their older counterparts, what they are looking for, and what they care about will help you to capture their attention with your offer.