Study: Younger Consumers Demand Loyalty From Brands

A newly released study, “The Rules of NextGen Loyalty,” from Alliance Data’s card services division, has determined that Generation Z and Millennials have been empowered by unique experiences, technology, and the power of choice to engage brands and consider loyalty in new ways.

Conducted by Alliance Data’s Analytics & Insights Institute, the study used a combination of qualitative and quantitative research methods to shed light on what brand loyalty means to older Millennials, born 1982 to 1989, younger Millennials, born 1990 to 1997, and Generation Z, born 1998 to 2010,

Highlights from the report include:

  • Loyalty is earned. In the study, 63% of younger consumers agree they have many choices of where to shop, so a brand must show them loyalty to earn their business.
  • Loyalty is complex. Brand operators should recognize that brand loyalty, when it comes to younger consumers, requires a combination of function and emotion.
  • Loyalty is fragile. Empowered by instant access and greater choice, today’s younger consumers increasingly want more and “put up” with less, so 76% of study respondents said they only give brands two to three chances before they stop shopping them.
  • Loyalty is multifaceted. For younger consumers, loyalty is a combination of transaction, or function, and emotion, often intense, so brands must understand customers’ unique needs and think differently about measuring loyalty.

A brand that wins loyalty can gain real advantages, according to the report. For example, younger shoppers satisfied enough to use a brand’s app will use it twice as much as older shoppers do, the company noted.