Millennials are the generation born between 1981 and 1996, and are sometimes referred to as 'Generation Y' or 'Gen Y', they are the generation who grew up and crossed over into the new millennium.

Gen Z is the generation that came after, born between 1997 and 2012. Accurately defining generations is difficult however and so they are often taken as general guidelines rather than exact distinctions.

Whilst there is a large age gap across these generations, the oldest millennials being around 42 and the youngest Gen Z around 11 years old, their spending habits do overlap.

Fashion is the greatest expenditure for these two generations with wellness, beauty and recreation also growing fast. These two generations are also prioritising their spending habits based on ethics and sustainability, so products that are good for the environment and good for people as a whole.

How do Millennials and Gen Z View Brand Loyalty?

Brand Loyalty describes how attached and invested in a brand, a person or generation might be. For millennials growing up in the 90s, loyalty to fashion brands such as Nike and Adidas became a mark of social standing and popularity. Being tied in with one's social rank and perception, many millennials were loyal to brands based on how they were perceived by wearing and being associated with that brand.

Yet as millennials have aged and Gen Z have developed their own perspective on the world, developing new reasons for loyalty in a changing world.

Whilst for millennials there is still a nostalgic element to brand loyalty, meaning they will go back to brands they know because it reminds them of who they used to be, the changing face of the world has millennials split between continuing as they always have, and looking further afield for new solutions to old problems.

This means that some millennials are thinking and acting like those in Gen Z – the crossover!

Gen Z has grown up in a world that is already tumultuous. There are large scale global issues featured in the news every few months, and climate crisis is no longer an unproven theory like it was for millennials and those that came before, but a fact that they have grown up with.

As a result Gen Z are doing more research into where they spend their money, often geared towards looking at the ethical and sustainable nature of the business and the harm that it may contribute to the planet.

Whereas millennials once said they got it because they wanted it, Gen Z is considering even if they want it, do they need it? And whether it will do more harm than good.

From manufacturing processes to sustainable materials and treatment of employees, Gen Z is using social media networks to peer into the life of brands and to understand who they really are. Bad reviews from employees can be enough to instigate a boycott of a business and its brands until something is done to effect change, or to even cancel them altogether with no chance of regaining their reputation.

How Does Understanding Differences in Brand Loyalty Between Gen Z & Millennials Benefit You?

Understanding these differences can help you to tailor and target the marketing of your brand to different generations individually. By being more effective at engaging individual generations with your brand, you will be able to improve customer retention and provide the opportunity to spend less on attracting new customers.

As you retain old customers, their loyalty only breeds more loyalty, and customers that care about your brand become advocates, influencing their peers as to why they should choose your products over any other. Brand Advocacy is the most powerful form of free advertising any company can get. Loyalty is about trust, and trust is something built over time with experience.

One cannot simply be trusted, but must gain trust by demonstrating and showing you are trustworthy. A lot of people can be afraid of making the leap to a new brand for that reason, but if just one customer comes to you and you gain their trust, it is so much easier for that person to convince others who already trust them of using your brand in the future.

For Gen Z, influencers are an important part of their daily lives. To Gen Z, influencers are real people just like them, in positions where they tell the truth about their chosen subject or field of expertise, from beauty to fitness, tech to art, and motivation to finance, the genre of influencer is endless.

However, the trust that Gen Z followers put in them is an invaluable asset to any brand looking to create a better base amongst their generation. If your product or brand can be positively received or reviewed by influencers, it creates an instant buzz around the product and the thousands of followers as well as a desire to be a part of your brand too.

And finally, understanding the habits of millennials and Gen Z gives you a greater range of data for better analysis, targeted advertising, offers and product research. The more you can find where millennials and Gen Z are already spending their time and money, the easier you can adapt to place your brand directly in their sights.

A greater depth of data also allows you to create enhanced customised rewards targeted specifically to that generation. Instead of running a rewards campaign that entices millennials but not Gen Z, rewards can be made relevant to that generational group, attracting and retain customers from both generations at the same time.

Building Brand Loyalty With Millennials and Gen Z

To help direct the spending habits of millennials towards your brand, invite them into the comforting, the familiar and the nostalgic. Most are old enough to now have a larger pot of money to spend, but are also at the age where venturing out into new places is becoming less and less common. Their desire for a better world is growing, and ethically minded brands are more likely to win out over traditional brands. Millennials are of a generation that is now defined and enjoys being what it is.

Gen Z however isn't attached to tradition. Along with ethically minded brands, they want innovation, new and original, something they haven't seen before, and they will look to various sources to collate information together. So the more your brand has a presence in different digital and physical spaces, the more likely you are to attract the attention of Gen Z.

Furthermore, Gen Z is much more likely to trust influencers and Brand Advocates that have a following than they are the brand itself, so how you are perceived by the world of Gen Z is of paramount importance in securing brand loyalty.

Knowing these differences will allow you to tailor rewards and loyalty schemes to entice the different generations and appear relevant and meaningful to both of them. It will allow you to effectively spend money on the right kind of advertising, and ensure that if you tailor rewards through a loyalty scheme, the money put into the scheme isn't wasted by only attracting one generation, when in fact the same scheme could attract two, or more.

Understanding Brand Loyalty is paramount when it comes to sculpting rewards and loyalty schemes and in knowing how to attract different generations to your brand now, and for years to come.