Gen Z lead brand switching due to boredom and price hikes

SAP Emarsys has unveiled its annual Customer Loyalty Index 2024, revealing significant shifts in Australian consumer behaviour amidst rising cost-of-living pressures.

According to the report, nearly 41% of Australian Generation Z (Gen Z) consumers have abandoned brands due to boredom, with 26% of older generations following suit. This finding highlights the importance of innovative and engaging marketing strategies to capture consumer interest and maintain brand loyalty.

The research indicates that 65% of Australians have switched their brand allegiance primarily due to cost considerations. It also points out that 53% of consumers are likely to sever their loyalty ties when brands increase prices. These statistics underscore the economic pressures currently impacting consumer spending decisions.

Another critical aspect of the SAP Emarsys findings is the role of loyalty programmes. About 58% of respondents expect loyalty points or cashback rewards as an incentive for their continued patronage. These insights provide a clear message to brands about the necessity of offering tangible benefits to maintain customer loyalty.

Personalisation and creative marketing emerged as decisive factors in building brand loyalty. The report notes that 40% of Gen Z consumers have been attracted to new brands primarily due to innovative marketing techniques, compared to 27% across all age groups. This demographic is also notably impacted by 'cool' content and imagery, with 36% of Gen Z respondents expressing a preference for brands that deliver these elements, compared to 23% of other age groups.

Sara Richter, CMO at SAP Emarsys, stated, "It's clear that consumers today, not just Gen Z, expect more than 'business-as-usual'—they want meaningful and memorable experiences. The key to delivering that is personalisation for every customer."

Several brands stand out as examples of successful marketing innovation. For instance, Liquid Death's bottled water branding has been described as "radically entertaining", while Kia's launch of a new utility vehicle in Australia involved the participation of 20 of the country's sporting legends. Such initiatives demonstrate how creative marketing can effectively transform and elevate everyday products.

The report also highlights the growing role of artificial intelligence (AI) in enhancing marketing efforts. SAP Emarsys suggests that AI can help optimise marketing strategies by identifying profitable under-served customer segments, enabling highly targeted and personalised campaigns.

This aligns with the expectations of nearly 74% of marketers who see AI as crucial for improving customer engagement in 2024. A significant 77% of those surveyed have already noticed increased engagement after implementing AI-powered personalisation strategies.

"AI is the only practical solution for providing genuine one-to-one interactions at scale, across every channel, and at the right moment. Brands that embrace AI-powered personalisation are far better equipped to keep customers engaged, especially when attention spans are short, and demands are high," added Richter.

The study reflects a sample of 2,019 Australian respondents aged 16 and above, conducted by Opinion Matters. These findings underscore the ongoing challenges brands face in maintaining loyalty amidst economic uncertainty and highlight the tools and strategies that can help meet evolving consumer expectations.