Customer loyalty across generations – exploring preferences and approaches of Gen Z and young Millennials
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Young adults (18–29 years old): old Gen Z and young millennials
Values and expectations of young adults
Transitional Gen Z and Gen Y (Millennials) prefer, above all, clear and direct communication that is both convenient and respects boundaries. This might help explain why, compared to the general population, they tend to favor text messages (27% vs. 30%) while strongly disliking phone calls (43%). Interestingly, despite their high engagement on social platforms, some of them do not approve of social media outreach (24%).
The most encouraging factors for them to join a particular loyalty program are:
- the value of rewards – 64% (vs. 60% of the general population),
- discounts and cashback offers – 65% (vs. 71%),
- affinity for the brand – 52% (vs. 43%).
Whereas they are not tempted by exclusive and VIP offers (21%).
How do Zillennials earn and spend their loyalty points?
For Millennials and Gen Z, a good loyalty program is a positive but not a major factor in staying loyal to a brand, since they focus mainly on immediate and practical benefits. They are primarily earning loyalty rewards through online shopping (24%) and grocery purchases (24%).
Loyalty features tailored for Zillennials’
Even 54% of transitional Gen Z and Gen Y are likely to shop more and longer if they receive special offers and tailored recommendations.
If I have to guess what customers expect in 2025, I would say seamless omnichannel experiences, personalized rewards, and exclusive access to unique experiences will be key. Brands must demonstrate a strong commitment to social responsibility and sustainability. Gen Z will love it! Loyalty programs should evolve into holistic customer relationships, focusing on building long-term emotional connections that revolve around people's daily lives. We should soon expect a shift towards community-based loyalty programs, fostering a sense of belonging among members. People need those tribes to thrive and survive. Bijou Daniel, Head of Product - Loyalty and Operations at Alshaya Group |
Experts' views on the subject coincide with the data, since in 2025, most young adults prefer:
- to have their loyalty rewards integrated into digital devices (42%),
- to receive individual offers, recommendations, and discounts (62%), such as:
- birthday or anniversary discounts (52%),
- discounts on frequent purchases (51%),
- exclusive rewards or bonus points (49%).
The least valuable offers for Zillennials are:
- emails or SMS reminders of special sales and campaigns,
- personalized shipping or delivery options,
- product customization and build-your-own options.
Furthermore, they are not interested in loyalty program features like voice-activated options, AR shopping experiences, or crypto and NFT rewards (30% in comparison to 15% of the global population).
Zillennials personalization preferences
They have a strategic approach, value personal information, and expect tangible benefits in return. They prioritize transparency, rewards, and control in data sharing, being open but cautious.
Zillennials share similar hesitations and demands to other age groups but with slightly lower acceptance of sharing data unconditionally (10% vs. 14% of the global population). Even if they are cautious about it, 47% of cohorts find rewards motivating, and 30% would share data for free.
Although they are less skeptical than older generations, their increased awareness of potential data misuse – such as companies leveraging information for their own benefit (e.g., to manipulate prices) – highlights the critical role of trust and transparent communication in building meaningful engagement. They are open to data-sharing arrangements but with specific expectations and safeguards because they are highly aware of the value of personal information.
Sustainability and ethical practices as Zillennials’ values
Zillennials interest in sustainability is constantly growing:
- 54% have switched to or remained loyal to brands due to sustainability practices (vs. 51% of the general population),
- 32% reduce plastic waste,
- 16% use renewable energy.
While they appreciate sustainability efforts, their priorities lean toward practical and visible changes rather than abstract or intangible initiatives:
For me, sustainability is one of the most important topics of all when it comes to shaping customer relationships and developing loyalty programs today. Loyalty programs are often criticized, and not without reason, for promoting excessive consumption: customers typically receive greater rewards the more they consume. A rethink is needed here, for example, by enabling loyalty programs to reward sustainable behavior or to redeem collected rewards for sustainable purposes. In particular, customers from Generations Y and Z increasingly take sustainability considerations into account when making consumption decisions. To gain their loyalty, companies must credibly demonstrate that they also make sustainability a priority. Overall, it is essential that companies and their customers pull together on the issue of sustainability and take joint responsibility for more sustainable consumption behavior. In research, we speak of co-responsibilization. Dr. Lena Steinhoff, Chair of Marketing and Digital Transformation at the University of Paderborn |
Key takeaways
To conclude, Gen Z and Millennials are tech-savvy and socially aware groups. They are highly selective about the brands they support. They seek connection, transparency, and alignment with their values, which in consequence influences brands to be authentic, responsible, and digitally present in a meaningful way.
Want to gain more data on loyalty trends?
This article presents only a glimpse of the information and data presented in the report Customer Loyalty Predictions 2025 and Beyond: Report on AI, Privacy, and Sustainability. To understand even better current trends and shifts in customer expectations, as well as their preferences, and behaviors, get the report here.
