How to foster loyalty among ‘fickle’ Gen Z shoppers

Amazon recently announced it was offering 50% off Prime for 18 to 22-year-olds. As part of the deal this demographic will also receive exclusive perks, which include discounts on grocery, among others.

Amazon says it is doing this to offer more value to its customers. But it also raises questions around the strategy to target Gen Z specifically, and the importance of locking in their loyalty at an early age (and whether this will pay dividends in the long run).

It’s understandable why Amazon is placing more focus on winning over this demographic. Foxintelligence data shows that in the UK, Gen Z made up 27% of value sales on Amazon in H1 2024 – lower than other platforms such as Shein and AliExpress.

This is also a valuable customer base to target. Our data shows Gen Z’s global spend is set to reach nearly $12tn by 2030, potentially becoming the wealthiest generation in every region of the world. Selling into this demographic will likely become a key battleground for brands. And capturing their loyalty will be competitive.

But Gen Z has carved out a reputation for being a bit fickle. Focusing on discounts may help with customer acquisition in the short term, but retailers and manufacturers need to work harder to win their long-term loyalty. The question is: how?

‘Stacked’ benefits can bolster value for Gen Z 

GfK data reveals authenticity is a top value for Gen Z. Moreover, this demographic has a heightened awareness of ‘value’ – which is relative for every generation – but ultimately it is more than price.

Retailers and manufacturers need to focus on what additional value their products have for their Gen Z customers. This could range from hygiene, safety, sustainability or health-related benefits.

When they are ‘stacked’ this can bolster the value of the product. For example, our data shows products with multiple (two or more) sustainability attributes saw a 2.5 times higher sales lift than products that carried only a single sustainability claim.

As with every other generation, Gen Z’s spending priorities will continue to evolve over time. Manufacturers and retailers need to understand what is important to Gen Z today, as well as forecast what will matter to them in the future to maintain relevance and long-term loyalty.

When we look at category-specific growth, our data predicts that through 2034, the most dynamic demand growth among Gen Z will be in the alcohol and health categories. Already, 52% of Gen Z consumers seek out nutrients and ingredients that keep them healthy, while 42% desire ingredients that are natural, not artificial.

Investing in health and wellness-related attributes will therefore prove highly valuable to manufacturers and retailers looking to attract and maintain Gen Z customers. It’s also worth considering wellness-related attributes that are resonating outside of your product category – for example beauty or food – to help inform new product innovation (or reformulations) in your category to outpace the competition.

Gen Z is digital first, and this demographic does not use as many traditional coupons as older generations. But this does not mean this strategy won’t work for driving loyalty. Instead, focusing on digital circulars, loyalty apps and digital promotions can help brands foster brand loyalty, which can in turn pay off tomorrow and long into the future.

Be aware of the perils of mindlessly going after Gen Z. Like any strategy, it’s critical to apply a deep understanding of who you’re selling into. By harnessing the correct insights on this demographic and truly understanding them and their values, you can feel confident acquiring (and maintaining) lasting loyalty with this burgeoning class of shoppers.