Generation Z wants true omnichannel loyalty schemes
It's not all about the younger generations, you know
While customer loyalty programs are popular with younger generations, brands can make significant gains by making marketing investments in the more mature consumer groups such as 'Generation Z', some 87% of whom say they would like more omnichannel loyalty programs, according to a study by CrowdTwist.
The company's research report, entitled Loyalty Research: Gen Z, Millennials and Beyond examined consumer attitudes towards loyalty programs, brand engagement, emerging technologies, and shopping experiences, and uncovered several new findings from a generational brand engagement perspective.
The drivers of brand loyalty and what consumers find valuable in a loyalty program differ across age groups. Findings indicate that customer skepticism towards brands increases with age and affluence has no impact on a consumers' enjoyment of shopping. What is notable is that while online shopping is highly preferred among consumers surveyed, in-store experiences are still important, particularly for Gen Z and Baby Boomers.
And brands are missing the mark with personalization across all generations. However, it's telling that consumers who are willing to share information with brands have better experiences than those who aren't.
Among the report's other key findings:
- Consumers want omnichannel loyalty programs, particularly Gen Z. 87% of Gen Z consumers want to be awarded points for walking into a brand's location, restaurant, gym, or store.
- Gen X participates most in loyalty programs. 82% of Gen X consumers responded that they are active in at least one loyalty program. They also redeem more than other generations. 77% of Gen X program members redeem rewards at least once a quarter. The least active group is the Silent Generation A,- - 35% responded that they don't participate in any loyalty program.
- Gen Z are more willing to pay a premium. 77% of Gen Z respondents understand the value of loyalty programs and are more willing to pay a premium in exchange for valuable perks like free shipping (for example, Amazon Prime). The Silent Generation was the only group where the majority (55%) answered no to paying a fee for a loyalty program.
- Loyalty programs provide brands with younger target audiences a competitive advantage. 72% of Gen Z and Gen X respondents answered that they could be persuaded to choose one brand over another due to the presence of a loyalty program, followed by 68% of Millennials, 56% of Baby Boomers, and 42% of the Silent Generation.
- There has been a decline in brand trust, but Millennials are most willing to share information. The study found that only 46% of Gen Z consumers and 55% of Millennials (the most trusting generation) are willing to share their data in exchange for personalized experiences. The biggest skeptics are members of the Silent Generation: only 21% answered that they were willing to share personal information in exchange for personalized experiences.
- Most brands' personalization efforts are not effective. The majority of consumers want a personalized experience. Of the consumers we surveyed, 70% of Gen Z respondents, 64% of Gen X respondents, and 63% of Millennials want to receive personalized recommendations via an app while browsing in-store. However, current personalization efforts made by brands are ineffective. 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 survey results provide an interesting view into the differences between generations, their attitudes towards loyalty programs, their shopping preferences and what motivates them to make purchases," said Scott Matthews, CEO for CrowdTwist. "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. 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."
The report has been made available for free download (free registration required) from CrowdTwist's web site: http://go.crowdtwist.com/l/19292/2018-10-11/bq8pvq
Sources: CrowdTwist / The Marketing Factbook.
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