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How to Gain Loyalty With Millennial and Gen Z Shoppers

how to gain millennial loyalty

brought to you by our partners at Smile.io

 

Establishing brand loyalty is the foundation for a successful business, no matter what industry your business is categorized. Brand loyalty accelerates your business to remain profitable and stay in business for years. The brand advocacy from a loyal customer is priceless.

Gen Z and Millennials are the prime demographic to build brand loyalty around because of their disposable income, willingness to spend on new products and services, and overall spending power. 

One way to build Millennial and Gen Z brand loyalty is through loyalty programs, such as points in exchange for every dollar spent, and referrals. What flows from a loyalty program is repeat purchases, increased average order values (AOV), and a brand community that will become your brand advocates. Another way to gain Millennial and Gen Z brand loyalty is through brand authenticity, omnichannel targeting, and referrals with meaningful rewards. 

Online Shopping by Generation: The 4 Types of Shoppers to Expect

Your ecommerce shoppers can be broken down into four key demographic groups: Gen Z, Millennials, Gen Xers, and Baby Boomers. Once you identify these groups you can begin to build out personas to find the key messages to communicate to each group. This will drive your brand community to span across generations (if it makes sense for your brand), and truly speak to each group’s pain points and why they need your product. 

Each demographic, shops and discovers products differently. According to insights, 84% of Baby Boomers prefer to shop in-store, while 44% of Gen Xers use in-store pickup or home-delivery services when available. When it comes to Millennials, UGC content is key to making a purchase decision. Millennials believe that user-generated content is 50% more trustworthy than branded imagery. Meanwhile, 47% of TikTok users are between ages 10-29, making the platform a necessary strategy to acquire Gen Zers. 

Gen Z Brand Loyalty: Yeet to Complete

Gen Z are born between 1997-2012. One key characteristic of this group is their support for various charitable and mission-driven causes. Gen Zers have a disposable income of $360 billion and purchase from brands that support the causes they care about. Think Pura Vida Bracelets, a Gen Z staple that donates proceeds from every bracelet to an organization. On the flip side, Gen Z actively will turn away from brands if they don’t have a mission or a cause tied to the brand. 

Gen Z Buying Habits

Gen Z buying habits are focused on sustainability and are often influenced by social media influencers. They are more likely to call out brands and individuals for not supporting a cause, greenwashing or simply being unethical.

Gen Z shoppers are willing to spend more money on their pets, buy second-hand thrift items, and are always willing to pay more for sustainability. For example, insights from the Deloitte Global 2022 Millennials and Gen Z Survey found that over 64% of Gen Zers admitted that they are willing to pay more for sustainable alternatives. 

How to Attract Gen Z Customers

Brand authenticity is key to attracting Gen Z customers. You need to provide transparency about what your key values are as a brand. Which organizations and causes do you support? What are the values your brand is willing to stand up for? 

Social proof matters when it comes to ecommerce and Gen Z. How this demographic views your brand and speaks about your products (online and offline) is key to understanding where your ecommerce brand is positioned in the market with this demographic. For example, the hashtag #TikTokMadeMeBuyIt has over 60 billion views (and counting). 

One way to gain loyalty is through loyalty and referral programs which incentivize shoppers to return for repeat purchases. A loyalty program helps bring customers back through redeeming meaningful rewards, while continuously earning on purchases. As many as 84% of consumers say they’re more apt to stick with a brand that offers a loyalty program. A loyalty program should be part of your retention strategy and used as a tool to build a brand community across generations. 

Millennials Brand Loyalty: Communicating Value 

Millennials were born between 1981 and 1996. This demographic knows life before the internet and has grown up as social media was being formed. Millennials have grown up through economic woes such as a recession, which has shifted their habits of saving and spending money. 

Millennial Buying Habits

Millennials are currently the largest workforce, meaning they have money and are willing to pay for the best of the best. Millennials buying habits emphasize the value of every product they buy and are willing to spend on unique experiences and time. Time in the form of convenience or time-saving products. 

When it comes to ecommerce, free delivery can make a major difference whether they click add-to-cart and checkout. And fast customer support is always expected. One commonality between Millennials and Gen Z is their willingness to shop at stores that align with their values. 

How to Attract Millennial Customers

Roughly half of Gen Z and Millennials are members of a loyalty or rewards program. According to insights from Smile.io, after one purchase, a customer has a 27% chance of returning to your store. If you can get that customer to come back and make a second and third purchase they have a 49% and 62% chance of making another purchase, respectively.

We know millennials want the best value for their money when it comes to products and are more than willing to pay for them. By providing rewards in your loyalty programs such as exclusive merchandise and products, double redemption campaigns, or a price discount, Millennials will be more inclined to join your community and participate in your loyalty program. 

Another key way to attract customer loyalty in Millennials is through establishing mobile commerce as part of your strategy. Loyalty programs and mobile devices are essential to Millennials. It’s estimated that “66% of Millennials would switch brands and change where they buy to get more loyalty rewards. 66% also stated they would not be loyal to a company without a good loyalty program.”

The storytelling and localization of a brand drive demand from Millennials to shop from that particular brand. Personalization and customizability are what make the shopping experience for Millennials either a positive or negative one, and the determining factor if they will return for a repeat purchase. 

3 Trends That Will Help You Acquiring Loyal Customers

Three trends that help you acquire customers across Millenials and Gen Z shoppers, are by establishing your brand values, giving you an authentic brand identity, making referrals simple, and having an omnichannel strategy. 

Authenticity from brands

Ask what values and causes you speak about and support. If you’re a new ecommerce brand, create cause-driven campaigns or products that support an organization. This will give your customers a buy-in to your community. Humanize your brand by making your Millenials and Gen Z customers feel as if you have an identity.  

Referrals 

It’s estimated that more than 90% of companies have a customer loyalty program. This can range anywhere from a points-based program, a VIP program, or a referral program. 

Referral programs are a simple way to get your loyal customers to introduce your brand to their network. Referrals expand your marketing reach and reduce marketing costs because you have brand advocates doing the work. Incentivize with a referral discount for both the person making the referral and the person being referred. Referrals allow ecommerce brands to measure word-of-mouth marketing in real time. 

Omnichannel targeting 

Generating a sale doesn’t always happen through one channel. Each customer has a different preference for where and when they shop. Omnichannel commerce is the approach of an integrated strategy for a business that unites multichannel methods of retail into one channel. It unites the online and offline channels of your businesses. Omnichannel offers the same customer experience whether someone is shopping online or at a physical location.

Omnichannel marketing and commerce are different, but the approach is the same, unifying platforms and messaging. Omnichannel marketing is ensuring you have the same messaging across platforms. Omnichannel commerce ensures your customers can check out wherever they are. 

Create a personalized experience for shoppers overall with the data you get so you can tailor their shopping experience to their preferences. Omnichannel is key to ensuring you can reach every type of shopper, across all generations through any device, location, or social media platform. 

Adapt to Build Loyalty 

Gaining loyalty from Millennials and Gen Z customers doesn’t happen overnight. It happens by creating opportunities to capture your customers through a branded loyalty program, brand authenticity, omnichannel strategies, and referrals. The brand advocacy and referrals coming from loyal customers is priceless.

Adapting to Millennial and Gen Z buying habits and values such as loyalty, sustainability, and an overall great experience, will help you build a brand community and customer loyalty. Establishing brand loyalty is the foundation for a successful business, no matter what industry your business is in.

 

Author Bio: Jonathan Roque 

Jonathan Roque is the Content Marketing Manager at Smile.io. Jonathan is passionate about ecommerce and helping small and medium-sized businesses grow and maximize their potential. 

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