The jokes about Gen Z are many, but for many marketers, their growing purchasing power is no laughing matter.

They are now the largest generation ever, making up 30% of the world’s population, or roughly 2 billion people. They are the new generation of customers. By 2025, Gen Z will make up 27% of the workforce. And with a growing bank account, their preferences will continue to matter. Smart businesses will start to cultivate their brand loyalty now because their attention is a big opportunity.

A new American Express Canada report confirms this. Conducted by Maru Public Opinion, the research is based on a poll of 115 Canadian business owners, partners and senior decision-makers in QSR, grocery, restaurant, fast food and retail, and 404 Canadians between the ages of 15-26.

Retailers in Canada who say they are marketing to Gen Z have roughly doubled since 2019, growing from 25% to 57%, while 64% believe appealing to them is critical to the success of their business.

We know what Gen Z are like, either because we know one or the stereotypes have a kernel of truth to them. They have notoriously short attention spans, a knack for multi-tasking, are addicted to and fluent in technology and would rather not have face-to-face interactions. They also expect a lot out of the brands they spend their money on. But a gap in understanding how to drive brand loyalty among this demographic persists.

“With Generation Z, you could be winning a customer for life if you understand their expectations and preferences,” says Kerri-Ann Santaguida, VP and general manager of merchant services at American Express Canada. “The challenge is that Gen Z is a generation of diverse tastes. At times, they value frugality and sustainability, shopping at thrift stores and looking for a deal, but they’re also willing to pay more for high-quality products.”

So how should retailers connect with this group? The report shows that there are three optimal avenues for developing a sticky relationship – an experiential, contactless and simple one that will increase active engagement.

The first is providing unique in-store or authentic brand experiences. Based on the current research, only 27% of businesses are doing so. Retailers who prioritize this do it in two ways: by creating sensory experiences for their customers and by highlighting storytelling through merchandising. This is because Gen Z favours positive memories over material goods.

Next is increasing digital contactless payment opportunities. With the first generation to have grown up in a fully interconnected and technological world, carrying physical money just doesn’t make sense to them. Not when you can Apple Pay everything. And so, payment options that suit their view of the world have a powerful impact on brand loyalty: 30% of Gen Z say they wouldn’t go back to a store if their preferred form of payment was not available.

Finally, establishing an easy loyalty program with realistic rewards can go a long way. This generation is also known as one of the most loyal consumer demographics, but Gen Z also appreciates being rewarded for that: 45% of them said they would buy a brand again if they earned valued rewards on purchases.