The conversation at the forefront of marketing discussions continues to revolve around the shifts in loyalty with Millennials and Generation Z. With technology eliminating the term “patience,” and the power of choice at an all-time high, data shows that customer loyalty has become harder to find.
In a study by the Alliance Data’s Analytics & Insights Institute, brand loyalty was discussed by Millennials and Generation Z segments of people.
“One-to-one conversations with real people supported by in-depth research has provided a unique view into the mindset of today’s youngest generations and what they expect from brand relationships,” Shannon Andrick, VP of Marketing Advancement, told Chain Store Age. “The loyalty landscape has truly shifted from brands driving loyalty to brands earning loyalty.”
In the study, there were four key areas discovered by the group.
First, loyalty is earned, not simply given. With choices continuing to expand by the day, deep brand connectivity and earning lasting loyalty are keys to retaining loyal customers. When asked, 63 percent of the members within the study agreed they have many choices on where to shop and brands most show them loyalty for them to be loyal to the brand.
Second, loyalty is as complex as ever. Functional loyalty is evolving, yet not completely morphing, into emotional loyalty. Today, brands must have a combination of both in order to retain this new generation of customer.
Third, loyalty is fragile and consumers are unforgiving. With the “I want it now” generations, consumers are much less willing to tolerate mistakes or unfavorable decisions by brands. In the study, 76 percent of the younger consumers would only be willing to provide a brand with two to three chances before dumping them.
Lastly, loyalty is multifaceted and no longer transactional. Brand’s must take individualized approaches in attempting to understand their customers wants and needs. There will be high-need customers and others who are okay with the basics. With data at an all time high, brands must utilize technology to better understand what the traits of each customer are.
The future of loyalty is no longer the future anymore, as NextGen loyalty is officially a major factor for all brands. The unique nature of the NextGen loyalty issue is that each brand, regardless of industry, is affected by the problem. Without adaption each brand, no matter the size or reputation, will struggle in the coming years.

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