Gen Z’s Loyalty Gap: Why Young Consumers Resist DTC Brands

The New Brand Reality: Loyalty Is Up for Grabs

Running a modern DTC brand and noticing that Gen Z customers seem quick to jump ship? You’re not alone. A striking 81% of Gen Z and Millennial shoppers switched brands in the past year (LinkedIn: Marca). Essentially, four out of five young shoppers are ready to ghost even their preferred brands without much hesitation.

For DTC operators, particularly those on Shopify, this isn't merely a marketing challenge—it's a call to action to overhaul how we foster repeat business. The root cause? Gen Z’s approach is uncompromisingly pragmatic. With half planning to cut back on dining out, a third on clothing, and nearly a third on alcohol due to budget constraints (Axios), they’re not anti-brand, but they’re certainly not sentimental. If you can't consistently deliver value—whether that's price, convenience, or experience—they’ll move on. Loyalty must be constantly earned.

Gen Z’s “Open Relationship” With Brands

Gen Z’s brand relationships are best described as open and noncommittal. 62% of them check out alternatives before purchasing, even if they have a favorite brand (LinkedIn: Dept Agency). This isn’t mere fickleness; it’s strategic shopping in a world of abundant options.

Everything you know about Gen Z & loyalty is wrong

For years, commerce leaders have chased the elusive butterfly of Gen Z loyalty, often with disappointing results. We’ve seen the data: 62% of Gen Z will explore other brand options even if they have a favorite.

LinkedInDEPT®

Traditional loyalty programs? Largely dismissed. One-third of Gen Z has abandoned generic loyalty programs, and 40% would switch to a better rewards card without hesitation (LinkedIn: Bits of Stock). Speed, flexibility, and personalization trump outdated punch cards.

Suze Dowling, co-founder of Pattern Brands, puts it succinctly:

“They can get a sale, but loyalty? Repeat buys? 🦗🦗🦗” (LinkedIn: Suze Dowling).

How to build DTC brands that scale: listening to customers | Suze Dowling posted on the topic | LinkedIn

7 brands. Thousands of customer conversations. Here’s what I’ve learned about building DTC brands that actually scale... DTC changed the channel. But Direct With Consumer changes the company at its core. When DTC exploded, it gave brands a powerful new toolset: sell directly, cut out the middleman, and move faster than ever. But somewhere along the way, we started mistaking speed for strategy—and missed the deeper opportunity. It was never just about talking to customers. The real unlock is learning how to build with them. Direct With Consumer isn’t a tagline. It’s a way of operating. It means listening when it would be easier to assume, pausing when it would be easier to push, and evolving alongside your customer—not ahead of them, and certainly not above them. This was reinforced for me recently in a coaching session. I was mid-sentence when my coach stopped me and said, “Did you actually hear what you just said? Pause. Take it in.” It stopped me cold—because she was right. And it reminded me: building with your customer demands that same pause. The space to truly hear—not just gather—the insight they’re already trying to give you. When you ignore that, you don’t just slow growth. You risk solving problems no one actually needs solved. I’ve let that slip at times. We all do. This is your reminder to bring the focus back to the customer—early, consistently, and with intent. Here are a few tools I rely on to do that more effectively: - PickFu, for visual and positioning tests that surface quick preferences before launch (shoutout to our amazing VP of Creative for this discovery!) - Answer the Public and Answer Socrates, to uncover the questions people are already asking in your category - SparkToro, to identify where your target audience spends time online—what they read, listen to, and follow—so you can better meet them where they already are - AI deep research to surface patterns in pain points, language, and unmet needs - And, always, direct conversations—nothing replaces a phone call or open-ended survey for nuance DTC gave us speed. Direct With Consumer gives us staying power—and a far greater chance at building something that resonates. When was the last time you truly paused to listen—not for validation, but for insight?

LinkedInSuze Dowling

Many Shopify merchants excel at acquisition but falter at retention. Gen Z expects brands to earn every repeat visit. Ignoring post-purchase engagement means losing their trust—and their business.

Value and Values: Gen Z’s Two-Track Filter

Gen Z’s so-called loyalty issue isn’t about disinterest—it’s about standards. They’re both value-conscious and values-driven.

On one hand, they demand sharp prices and quality that justifies the spend. On the other, they’re asking: Does this brand reflect who I am? 68% of Gen Z view their purchases as an expression of identity and beliefs (Shopify). If your product or brand story doesn’t help them signal their values, don’t expect loyalty. If your brand contradicts their ethics, expect backlash.

This dynamic is evident in the “local vs. global” preference. 71% of Gen Z feel more connected to local or indie brands (LinkedIn: Gen Z Goes Local). Meanwhile, 64% see global brands as having generic values. Trust is shifting from celebrity endorsers to local influencers; Gen Z trusts local influencers 78% more than celebrities (LinkedIn: Gen Z Goes Local).

The takeaway? For DTC brands, loyalty hinges on both value and values. Authenticity isn’t optional—it’s essential. If you stand for something real and back it up with action, Gen Z can become your fiercest advocates (LinkedIn: Dept Agency).

Everything you know about Gen Z & loyalty is wrong

For years, commerce leaders have chased the elusive butterfly of Gen Z loyalty, often with disappointing results. We’ve seen the data: 62% of Gen Z will explore other brand options even if they have a favorite.

LinkedInDEPT®

Social Media: Where Loyalty Is Won—and Lost

No other generation shops through social media quite like Gen Z. Discovery, community, recommendations—all happen on platforms like TikTok, Instagram, and YouTube. Nearly 57% of Gen Z have purchased something following an influencer’s review, and about a third say an influencer’s endorsement made them trust a brand (Shopify). The right creator partnership can quickly propel your Shopify store into the spotlight.

But here’s the catch: social media can disrupt loyalty just as swiftly. Trends evolve at a breakneck pace—what’s cool today might be outdated tomorrow. The “de-influencing” movement, where creators advise followers to bypass overhyped products, is a response to this fatigue (LinkedIn: Marca). Gen Z shops with skepticism. A viral TikTok might get you a first sale, but if the experience falters—or a new trend emerges—they’re gone.

How Gen Z is redefining brand loyalty | BetterMarca posted on the topic | LinkedIn

81% of Gen Z and Millennial consumers have switched brands in the past year. Generation Z is redefining brand loyalty by prioritizing authenticity, purpose, and shared values over traditional marketing tactics. According to McKinsey, Gen Z consumers are more likely to explore alternative brands—even those they haven’t tried—making loyalty more fluid than ever before. Influenced by social trends like “de-influencing” and driven by a desire for unique, socially shareable experiences, Gen Z expects brands to engage meaningfully and stand for something beyond profit, especially in areas like sustainability and social impact. To earn Gen Z’s loyalty, brands must shift from transactional relationships to purpose-driven storytelling. This generation wants to feel part of something larger than themselves. Companies that foster community, offer personalized experiences, and remain authentic in their mission will resonate more deeply. In short, Gen Z isn’t just buying products—they’re buying into purpose. Brands that recognize this shift and adapt will be the ones that not only survive but also lead. Brand loyalty is getting undressed. The rules have changed. Are you ready to shift with them?

LinkedInBetterMarca

Social media also amplifies both praise and backlash. A negative customer experience can go viral, undoing years of brand-building. Conversely, brands that engage authentically—replying to DMs, participating in community threads, being transparent—build real credibility. Robin Wheeler, CRO at Fetch, notes Gen Z expects brands to “engage meaningfully beyond just sales” (Axios). The lesson? Foster community, show a human side, and you’ll remain top-of-mind longer than your last sale.

Closing the Loyalty Gap: The Modern Operator’s Playbook

So how can DTC founders and operators bridge Gen Z’s loyalty gap? A few strategic shifts can make all the difference:

1. Value: Table Stakes, Not a Differentiator

Gen Z’s value radar is sharp. They’ll comparison shop and sniff out a markup instantly. Be transparent about pricing, highlight product quality, and offer flexible payment options like Klarna or student discounts. In a world where switching is frictionless, make value unmistakable—every time.

2. Loyalty Programs: Instant, Personal, Effortless

Ditch the traditional punch cards. Gen Z wants instant gratification and tailored rewards. Offer early perks, small but frequent rewards, and mobile-first programs. Use your data: if your audience cares about sustainability, integrate green perks or charity tie-ins. With 33% already ditching generic programs, yours needs to feel unique (LinkedIn: Bits of Stock).

How Gen Z Sees Loyalty Programs: A New Era of Rewards | Bits of Stock™ posted on the topic | LinkedIn

🌱Gen Z Will Ditch Your Loyalty Program If It Doesn’t Provide Real Value Over 40% of Gen Z say they’d switch to a card with rewards that better match their values and habits. They don’t want to accumulate points for months just to redeem them for something they don’t need. They’re looking for rewards that provide real value, work with their lifestyle, and don’t require jumping through hoops. What does Gen Z’s Ideal Loyalty Program Provide? 🌐Value beyond cashback: rewards that align with their priorities, like investments, experiences, or causes they care about 📱Mobile-first experiences: 65% use apps to manage their loyalty participation 👩‍💻Personalization: generic programs don’t earn their loyalty 💵Flexibility on small, frequent purchases, not rewards that only pay off after massive spending 💫Seamless integration into their daily lives. Loyalty should feel effortless, not like extra work One-third of Gen Z has already left loyalty programs that felt too generic. They participate in multiple programs at once, constantly evaluating which ones deliver real value. And when something better comes along? They switch without hesitation. This is where investment rewards come in. Instead of earning 2% cashback that gets spent on coffee, the roles reverse—each latte you buy helps you build long-term wealth. It’s a reward that aligns with Gen Z’s long-term goals and feels more meaningful than points collecting dust in an account. For a generation starting to invest at 19, rewards that contribute to their portfolio hit differently than traditional perks. The message to community FIs is clear: loyalty programs built for older generations won’t retain younger members. Gen Z wants rewards that reflect their values, work on their timeline, and provide real utility, not just discounts. What rewards are you offering that Gen Z would actually care about? https://lnkd.in/edv-eE-C #GenZ #LoyaltyPrograms #InvestmentRewards #CommunityBanking #FinTech #CustomerRetention #DigitalBanking

LinkedInBits of Stock™

3. Retention & Customer Experience: Don’t Go Dark After the First Sale

Acquisition is costly. If you’re not investing equally in retention, you’re leaking revenue. That means fast fulfillment, seamless returns, and responsive, human support. A personal touch—a handwritten note, a thoughtful follow-up—can make all the difference.

This is where platforms like LiveRecover shine. LiveRecover is an SMS cart recovery platform powered by real human agents. When a shopper abandons their cart, LiveRecover’s team personally texts the customer, addresses concerns, and helps close the sale in real time—creating a genuine connection. In a world of bots, LiveRecover consistently outperforms typical recovery flows because customers feel like they’re engaging with a real person, not an algorithm. That’s real retention: higher revenue and a brand experience Gen Z can trust.

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4. Stand for Something—And Prove It

Your mission isn’t just a section on your website. Gen Z expects your values to be evident in your supply chain, marketing, and social footprint. Integrate impact initiatives (sustainability, diversity, give-back programs) authentically and share the story. Encourage user-generated content around your initiatives—let your community amplify the message. Authenticity isn’t optional; it’s the new loyalty currency.

5. Meet Gen Z Where They Are—And Let Them In

Get social—on their terms. Invest in TikTok, Instagram, and community platforms, both for content and genuine two-way engagement. Encourage customers to create and share (unboxings, reviews, “how to style” videos) and boost their voices. Consider micro-communities: a Discord server or private group can transform shoppers into brand advocates. And don’t shy away from listing on trusted marketplaces—Gen Z will shop where it’s convenient.

The Bottom Line: Loyalty Isn’t Dead—It’s Just Evolved

Winning over Gen Z isn’t about tricking them into repeat purchases. It’s about respecting their pragmatism and their idealism. Nail the basics (value, quality, seamless experience) and layer on real values and authentic engagement. When you get both right, those “disloyal” shoppers can become your most vocal, loyal fans.

In a world of endless choice and TikTok trends, loyalty is a moving target—but it’s there for brands willing to earn it. Listen to what Gen Z is telling you: deliver real value, stand for something, and show up as a human, not just a logo. The growth opportunity is real—for those who adapt.