Gen Z shoppers are set to drive a staggering estimated AUD $1.3 billion in spending during the January sales, with individuals spending an average of $261, according to new research from SAP Emarsys, a company specialising in customer engagement. However, brands that fail to meet this highly influential generation’s expectations risk missing out on their loyalty – and their wallets – in 2025.
The research uncovers the top ‘red flags’ that cause Gen Z to head to competitors, as well as the ‘green flags’ brands must adopt to win their hearts and their business.
“Personalisation empowers brands to create value for Gen Z wherever they are—on their phones, engaged, and eager for experiences that feel tailored to them. By understanding individual preferences and acting on them in real-time, across multiple channels, brands can create the kind of loyalty that lasts,” Sara Richter, chief marketing officer at SAP Emarsys said.
With 68 per cent of Gen Z reporting loyalty to a favourite brand they repeatedly engage with, this group presents a lucrative audience for brands that get it right by building meaningful connections. However, their loyalty isn’t unconditional, and brands must avoid critical missteps to stay on their radar in 2025.
SAP Emarsys’ research revealed top loyalty ‘red flag’ pitfalls that could drive away Gen Z shoppers, which includes 32 per cent of Gen Zers disliking treating personal data irresponsibly, 31 per cent disliking brands who send excessive marketing communications.
Over 20 per cent of Gen Zers saw charging for returns as a red flag, with 17 per cent disliking brands that fail to reward long-term customers. While a smaller number, 8 per cent of Gen Zers disliked brands that fail to personalise a shopping experience.
On the flip side, Gen Z responds positively to brands that align with their values and create memorable experiences. AI-leveraged personalisation, consistency, and authenticity are key to securing their loyalty.
With 42 per cent of Gen Z show their loyalty to a brand by having the brand’s app downloaded, it signifies the importance of delivering high-quality apps to keep this generation immersed and loyal to a brand.
There were 26 per cent of Gen Z respondents who showed loyalty to brands that offer memorable experiences, like personalised services or events, with 49 per cent aligning with brands that are ‘iconic’ and relatable on social media.
The research also found that 15 per cent of Gen Zers are more loyal to brands that use AI to improve their shopping experience and 20 per cent show loyalty to brands that collaborate with relatable influencers and celebrities.
Personalisation plays a particularly important role, with 28 per cent of Gen Z saying they feel more loyal to brands that adopt a personalised approach tailored to their individual preferences.
PUMA’s partnership with SAP Emarsys shows how brands can drive life-long loyalty. Using AI-driven insights, PUMA personalises customer journeys across its direct-to-consumer platforms, in-store experiences and third-party channels. Particularly significant for Gen Z, by bridging content and commerce through TikTok shoppable videos, PUMA enables younger audiences to shop without interrupting their browsing experience.
