Loyalty Programmes in a Changing Consumer Landscape

For decades, Loyalty Programmes have been a cornerstone of customer retention strategies, offering discounts, rewards, and perks in exchange for brand loyalty. However, the rise of Generation Z in South Africa (aged 12–27) is reshaping what Loyalty Programmes need to deliver. This tech-savvy, emotionally driven generation is demanding more than just points—they seek authentic connections, meaningful rewards, and real-life engagement with their favourite brands. With insights from YouGov Profiles, we explore how Gen Z is redefining Loyalty Programmes and what businesses must do to adapt.

The Popularity of Loyalty Programmes Among Gen Z

Loyalty Programmes remain a hit with South Africa’s Gen Z, with 81% agreeing they are an excellent way for brands to reward customers. This high level of approval reflects the ongoing relevance of Loyalty Programmes in building trust and customer satisfaction amongst consumers with growing purchasing power that’s already evident and set to expand further.

For Gen Z, Loyalty Programmes are about more than just rewards—they’re an indication that brands value their customers. Programmes like Click Club Card (56%) and Pick ‘n Pay Smart Shopper (48%) lead the way, offering convenience and tangible benefits. To maintain this popularity, brands must continue to innovate, tailoring programmes to meet the unique needs of younger consumers.

Bright Futures, Bold Rewards: Gen Z’s Path to Financial Wellness

Gen Z is all about looking ahead, with over 80% confident that their household finances will level up within the next year and nearly 78% already noticing monthly improvements, showcasing their resilience even in tough times. This forward-thinking vibe drives them to engage with Loyalty Programmes that maximise savings and deliver real value. Brands that ride this wave by offering long-term perks—like discounts on essentials, financial incentives for frequent purchases, personalised rewards, flexible redemption options, and targeted promos—position themselves as true partners in Gen Z’s journey toward financial wellness, ultimately building deeper, more authentic loyalty.

Real-Life Engagement: Why In-Person Connections Matter

While Gen Z is undeniably a digital-first generation, 77% believe that for brands to be successful, they must connect with customers in real life. This desire for real-world interaction is driving a new era of experiential marketing, where Loyalty Programmes are integrated into physical touchpoints like events, pop-up shops, and in-store experiences. This is due to their need for authenticity in a digital age. Many articles speak to Gen Z looking for authenticity and transparency in marketing efforts – they are also a lot more sceptical of advertising than other generations (not surprising with the rise of fake news online), thus driving their need for this authentic, transparent connection, which helps to create trust

Brands that successfully combine digital and physical engagement—such as using loyalty apps to unlock in-person rewards—can build stronger relationships with Gen Z. These real-life connections create a sense of community and trust that is difficult to achieve through digital channels alone.

Emotional Connections: The New Standard for Loyalty

A significant 72% of Gen Z feel more emotionally connected to brands when they are part of a Loyalty Programme. This emotional attachment is a powerful driver of long-term loyalty, as it transforms the customer-brand relationship from transactional to meaningful.

To build these emotional connections, brands must focus on personalisation. Loyalty Programmes that use data to tailor rewards, anticipate needs, and celebrate milestones—like birthdays or anniversaries—can create a sense of belonging and exclusivity that resonates deeply with Gen Z.

Loyalty Programmes That Drive Spending

Loyalty programmes have a direct impact on spending habits, with 68% of Gen Z agreeing that they spend more money with brands when they are members of their Loyalty Programme. This underscores the importance of well-designed programmes that incentivise repeat purchases.

Brands should focus on offering tiered rewards, exclusive perks, and personalised offers to keep members engaged. The more value a Loyalty Programme delivers, the more likely Gen Z consumers are to increase their spending and deepen their connection with the brand.

The Growing Trend of Loyalty Memberships

Gen Z actively seeks out Loyalty Programme, with 74% subscribing whenever given the opportunity. This enthusiasm highlights the value they place on programmes that deliver tangible benefits and align with their lifestyle needs.

Programmes like Shoprite Xtra Savings (48%) and TFG Rewards (40%) are gaining traction by offering straightforward rewards that appeal to Gen Z’s practical side. As competition for loyalty intensifies, brands must ensure their programmes stand out by offering unique, memorable experiences.

Beyond Transactions: Building Long-Term Relationships

For Gen Z, loyalty isn’t just about points and discounts—it’s about building meaningful connections. 56% prefer brands that prioritise long-term relationships over short-term interactions. This shift reflects a deeper desire for authenticity, purpose-driven branding, and emotional engagement.

To meet this expectation, brands must demonstrate their values through their Loyalty Programmes. Initiatives that focus on sustainability, community impact, or social causes can create a lasting impression on Gen Z, encouraging them to stay loyal for reasons beyond financial incentives.

Stickiness Matters: Why Brand Loyalty Still Reigns

Gen Z’s loyalty extends to brands they trust, with 76% sticking to brands they like, with consistency, quality and reliability key factors in maintaining this loyalty. Consistency, quality, and reliability are key factors in maintaining this loyalty.

Loyalty Programmes play a pivotal role in reinforcing trust by rewarding consistent engagement. Brands that deliver on their promises—whether through exceptional service, quality products, or reliable rewards—can ensure they remain a top choice for Gen Z consumers.

Conclusion: Loyalty Programmes That Speak to Gen Z

South Africa’s Gen Z is redefining what Loyalty Programmes need to offer, demanding value, authenticity, and real-life connections. With insights from YouGov Profiles, it’s clear that loyalty programmes must evolve to meet these expectations, moving beyond points and rewards to deliver meaningful, personalised experiences.

For brands, the challenge is to stay ahead of the curve by integrating emotional engagement, innovative rewards, and purpose-driven initiatives into their loyalty strategies. By doing so, they can build lasting relationships with this influential generation, ensuring their place in the future of consumer loyalty.

Methodology

Profiles: Segmentation and media planning tool. YouGov Profiles makes it simple to find and understand the audience that matters most to you. With data collected daily, it gives you the power to build and customise a portrait of your consumers’ entire world with unrivalled granularity.

Dataset: 2024-12-29

Population:  South African Generation Z aged 12-27 years old with access to the internet