Forget punch cards and generic discounts. Today’s youngest consumers demand loyalty programs that feel personal, social, and experiential, or they’ll leave you behind.
Gen Z has earned a reputation as the ultimate brand-switching generation, characterised by restlessness, experimentation, and a willingness to ditch one label for another at the swipe of a screen. Conventional wisdom says loyalty is dead in the age of TikTok trends and endless online options. Yet, the data tells a different story. When brands move beyond cookie-cutter discounts and offer genuine connection, personalisation, and memorable experiences, Gen Z responds with surprising devotion. The paradox? Loyalty isn’t gone; it’s simply evolving to speak their language.
Why Loyalty Still Matters in the Age of Options
With endless brands vying for attention on Instagram feeds, YouTube shorts, and e-commerce shelves, Gen Z has more choices than any generation before them. But choice also breeds expectation. This cohort doesn’t just want products; they want brands to understand them. According to studies by McKinsey and Accenture, Gen Z customers are up to 60% more likely to engage with loyalty programs that offer personalisation and gamified experiences. Far from being outdated relics of retail, loyalty programs are evolving into dynamic ecosystems. The key isn’t points and punch cards, it’s reinvention, making loyalty feel less like a transaction and more like belonging.
The Gen Z Loyalty Code: What Works
So, what makes a loyalty program stick with Gen Z? Three clear pillars stand out.
Personalization. Cookie-cutter points won’t cut it anymore. Gen Z wants their loyalty experience to feel like Spotify Wrapped: data-driven, tailored, and reflective of their tastes. Starbucks Rewards does this masterfully, nudging customers with personalised offers based on past orders.
Social Proof. This generation thrives on community and validation. Loyalty programs that integrate shareable milestones or influencer-led collabs create social currency. Sephora’s Beauty Insider tiers, for example, turn product obsession into bragging rights, amplified across social feeds.
Experiences Over Discounts. For Gen Z, the ultimate flex isn’t 20% off, it’s exclusive access. Nike’s SNKRS app taps into this with limited-edition drops and early launches, making customers feel like insiders rather than just buyers.
The Risk of Getting It Wrong
With Gen Z, the margin for error is razor-thin. Performative or cookie-cutter loyalty efforts are spotted instantly and called out just as fast. A generic email blast or a recycled 10% off coupon doesn’t inspire loyalty; it signals that the brand doesn’t really “get” its audience. For this generation, trust is currency. Without authenticity, loyalty programs don’t just fall flat they backfire, pushing customers to disengage or even publicly criticise the brand.
Lessons for Marketers
The Gen Z loyalty playbook is clear. First, make loyalty personal, tailored rewards and experiences show consumers they’re more than just data points. Second, keep it social and shareable, integrating milestones, community interactions, and influencer collaborations, which amplifies the effect. Finally, deliver experiences, not just discounts, exclusive access, early launches, and events, and build emotional resonance. At its core, winning Gen Z loyalty isn’t about bribing them with perks; it’s about creating communities they genuinely want to stay a part of.
By: Sushrut Tewari,
A writer covering trends, innovation, and brand storytelling in India and beyond.