Gen Z’s new take on loyalty programs: The shift from discounts to exclusivity

Exclusivity isn’t just a perk for Gen Z; it’s the new standard. Brands need to innovate or risk losing relevance.

In the evolving landscape of consumer engagement, Gen Z is redefining what loyalty means. Unlike previous generations who were enticed by discounts and sales, Gen Z is gravitating towards exclusivity in loyalty programs. This shift is not just a trend but a reflection of deeper values held by this demographic. Gen Z, having grown up in a digital world, values unique experiences and personal connections over mere transactional benefits. They seek brands that offer them a sense of belonging and community, which is often achieved through exclusive access to events, products, or content.

Exclusivity in loyalty programs taps into Gen Z’s desire for unique experiences. According to a 2023 study by The Harris Poll, 68% of Gen Z respondents value experiences such as live events over material possessions. This generation is willing to invest in experiences that offer them something beyond the ordinary, something that they can share on social media and with their peers. Brands that understand this shift are creating loyalty programs that offer exclusive experiences, such as VIP access to events, early product releases, or behind-the-scenes content, which resonate more with Gen Z than traditional discounts.

Brands are increasingly recognizing the need to adapt their loyalty programs to align with Gen Z’s preferences. This involves moving away from traditional models that focus on points and discounts, and instead, creating programs that offer personalized and exclusive experiences. For instance, some brands are leveraging influencer marketing to create exclusive content or events that are only accessible to loyalty program members. This not only enhances the perceived value of the program but also strengthens the emotional connection between the brand and its Gen Z consumers.

Moreover, brands are incorporating co-creation methodologies, inviting Gen Z consumers to participate in the development of new products or marketing campaigns. This approach not only fosters a sense of ownership and loyalty but also ensures that the brand remains relevant to its audience. By involving Gen Z in the creative process, brands can create loyalty programs that are not only appealing but also reflective of the values and interests of this demographic.

Technology plays a pivotal role in the transformation of loyalty programs for Gen Z. As digital natives, Gen Z expects seamless and intuitive digital experiences. Brands are leveraging technology to create loyalty programs that are not only easy to use but also engaging and interactive. Mobile apps, for instance, are being used to offer personalized recommendations, track rewards, and provide exclusive content, all of which enhance the overall loyalty experience.

Additionally, brands are using data-driven insights to tailor their loyalty programs to the individual preferences of Gen Z consumers. By analyzing data on consumer behavior and preferences, brands can create highly personalized loyalty experiences that resonate with Gen Z. This not only increases engagement but also fosters a deeper sense of loyalty and connection with the brand.

Traditional loyalty models that rely heavily on discounts and points are gradually phasing out as they fail to resonate with Gen Z. This generation, characterized by its skepticism towards superficial marketing tactics, seeks authenticity and meaningful engagement. Programs that focus solely on transactional benefits are perceived as impersonal and fail to create a lasting emotional connection with Gen Z consumers.

Furthermore, the rise of social media and digital platforms has shifted the focus from transactional loyalty to emotional loyalty. Gen Z values brands that align with their personal values and offer them a sense of community and belonging. As a result, brands are moving away from traditional loyalty models and adopting modern loyalty strategies that emphasize exclusivity, personalization, and community engagement.

Ready to make your brand Gen Z-approved? Let’s start the conversation at genz@bangeri.fi.