Gen Z and Millennials turn to loyalty programmes amid economic uncertainty

With consumer confidence remaining low and inflation biting as the cost-of-living crisis grinds on, young UK shoppers are looking for more than transactional rewards – they are actively seeking loyalty programmes as a source of value and stability.

That’s according to new research by data-driven loyalty and engagement platform LoyaltyLion, which commissioned a survey of over 2,000 UK consumers.

The survey reveals that 55% of UK shoppers are more likely to join loyalty programmes now than they were a year ago, as economic uncertainty continues to shape spending habits.

It is the younger generations who are leading the way, with 71% of Gen Z and 72% of Millennials saying they’re more likely to join a loyalty programme now than twelve months ago.

While financial rewards do matter, with 84% of UK shoppers revealing that discounts motivate them to join loyalty programmes, adding experiential perks, ways to connect emotionally, and rewards that make consumers feel valued "increases a brand's ability to build a truly loyal community".

Seven in ten (73%) of Gen Z and Millennials say experience-based rewards like early access to products, exclusive events, or opportunities to contribute to new product development motivate them to enrol.

Additionally, over half (53%) of those surveyed say loyalty programmes are "financially more rewarding than they used to be" – showing how brands are stepping up to deliver what matters to consumers. Slightly more, 55%, say the programmes are offering more experiential rewards than before.

That may go some way to explain why a third (32%) would pay to enrol in a programme – at an average of £14.56 – rising to seven in ten (70%) of Gen Z.

In uncertain times, shoppers are looking for value wherever they can find it, with 78% willing to complete a quiz or profile in exchange for loyalty points, showing they’re ready to share data if it helps them save money or get more out of their purchases.

An omnichannel approach is also key, as "when money is tight, convenience matters", with 74% of UK shoppers saying that a consistently loyal experience online and in-store is important to them, while 69% value being able to access loyalty programmes on their mobile phones.

Charlie Casey, CEO of LoyaltyLion, said: "This research shows that loyalty is about more than discounts. In uncertain times, shoppers are looking for value and security. Brands that treat loyalty as a relationship rather than a transaction will stand out.

"Consumers want to feel part of a brand’s journey. Get it right and they’ll keep coming back, spend more, and advocate for you. It’s about creating a space where customers feel understood, valued, and excited to return."