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Home Featured

What attracts Gen Z to a brand and what will hold their loyalty?

by MN4U Bureau
November 6, 2021
in Featured, Think Through
Reading Time: 3 mins read
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What attracts Gen Z to a brand and what will hold their loyalty?
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Gen Z is one of the most influential generations. Their retail and brand loyalties are even influencing the behaviors of Millennials and Generation X, and now the younger generations too.

They have huge market potential with an annual estimated global spend power of $200bn, but including parental influence, an indirect spend of $3 trillion.

Yet, retaining the loyalty of Gen Z consumers remains difficult for many brands. Marketers are often challenged to rethink tried and tested approaches, from segmentation strategies to partnerships and affiliations, in order to resonate with the demographic.

And with Gen Z already accounting for approximately 27 percent of the entire Indian population, to achieve success, it’s crucial that brands not only adapt to connect with Gen Z consumers but that they are able to hold the loyalty of this core demographic.

My advice is that the key to loyalty is affinity. Build an authentic relationship with Gen Z, tell them what your brand believes in, what you care about, and what you are doing to affect positive change about the issues that matter. It’s critical to differentiate your brand in this manner so they can develop an underlying liking to your brand and build a real and emotional relationship.

The importance of social media presence

Gen Z is the ultimate early adopter and the epitome of a digitally-native consumer. They rely heavily on social media, from instant messaging to video games and live-streaming – defining social commerce. And,  across every device and every platform,  they expect customizable, personalized products and services, whilst placing a large focus on value.

Considering Gen Z’s familiarity with social media, to raise brand awareness, businesses must prioritize communication on social channels popular with Gen Z consumers. Share your brand stories, communicate your mission, create relatable ways for the audience to interact with your purpose, and benefit from the intrinsic network effects of these platforms to create advocacy for your business. Using channels such as Instagram, Snapchat, and TikTok to reach this hyper-informed, hyper-connected demographic, is key to achieving cut-through – raising brand awareness and affinity.

Transparency is key

Gen Z is also more conscious of larger social issues, perhaps, as a direct result of having grown up with social media. In a global study by the Varky Foundation, 92% of Indian respondents stated that men and women should be treated equally, while 79% believe that transgender individuals should have the same rights as non-transgender people. Given that they are a socially aware and impact-driven demographic, they hold brands to a higher standard on a range of social issues – from sustainability and equality to diversity and inclusion – than any generation that has come before.

Both individually and collectively, they reserve their loyalty for brands that align with their social and moral values. To better resonate and retain the loyalty of the Gen Z consumers, it is crucial that brands don’t just preach tolerance, but back it up with actions.

Resonating with the economically-savvy demographic

Gen Z is also undoubtedly a demographic with a keen eye for a bargain. In a global study of over 5,000 students, 92% used discount codes regularly, while 82% are loyal to brands that offer discount codes. In India, 73% of Gen Z would rather wait for a discount than buy an item at full price.

And, despite seeking out bargains, Gen Z is not keen to sacrifice quality. The same global study also found that 85% do research online before making purchases. Alongside their desire for greater value, they’re also increasingly conscious of social welfare. Gen Z is typically averse to any “fast fashion” outlets and brands that prioritize profit and a speedy production over staff welfare.

With over 34 million young people enrolled in higher education in India, growing to over 50 million by 2030 and an e-commerce industry growing at 36% annually, brands cannot afford to overlook Gen Z when building their business strategies.

I expect that there will be widespread disruption over the next ten years – changing young people’s habits and how they learn, earn, and spend. This disruption will be driven by a self-sovereign digital identity that augments the world around them.

To capitalize on the opportunity presented to brands by Gen Z, it’s crucial that they address these demands and keep on top of emerging trends – from sustainability to price and quality. This, combined with the right approach to social media, will help to drive brand loyalty among Gen Z.

Authored article by Josh Rathour Singh, CEO at UNiDAYS.

Tags: Josh Rathour SinghUNiDAYS

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