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Brands eager to win the business of Generation Z consumers need to step back and realize that this generation’s loyalty will be harder to earn and keep.

Gen Z numbers nearly 65 million in the U.S. alone, and by 2020, this influential cohort will account for 40 percent of the country’s consumers. That’s why smart companies are shifting focus and leveraging customer intelligence on Gen Z to their advantage.

But one thing is becoming clear: this generation is different from their predecessors. Tried and tested techniques are not enough to win the loyalty and business of these young and powerful consumers.

Loyalty programs mean little

Gen Z consumers differ from millennials, according to a Lab42 survey, in that they are less likely to be motivated by loyalty programs. While nearly three quarters of millennials said loyalty offers influenced their purchasing decisions, fewer Gen Zs were spurred by reward programs to spend.

For Gen Z, instant gratification may trump any form of traditional loyalty program.

Instead of a program to foster loyalty, the key to winning Gen Z may depend more on customer experience. A survey by Forrester and American Express found that younger respondents want speed and frictionless transactions. Offering same-day delivery and mobile self-checkouts may be key. This finding is supported by a February 2017 survey of U.S. smartphone users conducted by Euclid Analytics that found respondents ages 16 to 21 use their smartphones while in-store more than the average consumer.

For Gen Z, instant gratification may trump any form of traditional loyalty program.

Interactions must be meaningful

Gen Z consumers are eager to interact with their favorite brands, with 44 percent saying they’d be interested in submitting ideas for product designs, according to a study by the IBM Institute of Business Value and the National Retail Federation. The study also found that 42 percent would participate in an online game for a brand campaign, 38 percent would attend an event sponsored by a brand, and 36 percent would create digital content for a brand.

But this enthusiasm is tempered by Gen Z’s selectiveness. That same study found 62 percent are frequently attracted to new and fun brands, 55 percent choose brands that are eco-friendly and socially responsible, and 53 percent select brands that understand them as an individual.

Gen Z wants tangible experiences, face-to-face interaction with brands, and cool opportunities to post on social media.

Brands need to be able to connect on a more personal level if they are to tap this generation of consumers. Don’t make the mistake creating marketing efforts that are purely digital. Research shows Gen Z wants tangible experiences, face-to-face interaction with brands, and cool opportunities to post on social media.

Personal information must be respected

Gen Z is also looking for transparency and accountability from the brands they interact with. According to the IBM / National Retail Federation study, 60 per cent want brands to value their opinions. They also want some control over the interactions they have with brands: 55 percent want to decide what information they share with brands, and 54 percent want to control how brands contact them.

As Jane Cheung, global leader for consumer products for the IBM Institute for Business Value and leader of the IBM study told Retail Dive, this generation doesn’t think in terms of “on” or “off.” These consumers smart enough to understand the value of their data. To feel comfortable giving personal information, she said, Gen Zers need to know the data is protected, the terms and conditions, and how retailers are collecting the information.

Gen Z values velocity and authenticity

Gen Z consumers want both authenticity and instant gratification. Brands will have to be forward thinking and adaptable to win this growing segment of consumer, and if they want to build a closer relationship Gen Z customers, they will need novel ways to engage them and realize the loyalty programs of their parents are no longer enough.

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