Gen Z Dishes on Loyalty – This is What You Need to Know

When it comes to loyalty programs, the rules are changing—and no group is rewriting them faster than Gen Z. A recent collaboration between Vital, Punch, and our team uncovered some critical insights into what this demographic values in loyalty programs....

When it comes to loyalty programs, the rules are changing—and no group is rewriting them faster than Gen Z. A recent collaboration between Vital, Punch, and our team uncovered some critical insights into what this demographic values in loyalty programs. While some findings align with long-standing trends, others could make you rethink your entire approach.

In this article, we’ll dive deeper into the implications of Gen Z’s loyalty preferences and explore how restaurants can adapt to meet them head-on.

Gen Z’s Minimalist Approach to Apps

The first insight is eye-opening: Gen Z is all about keeping their phones clutter-free. Unlike previous generations, who embraced app downloads enthusiastically, Gen Z curates their phone apps carefully, prioritizing those that deliver consistent value.

Why? Storage space and user experience are at the core of this trend. With apps competing for real estate on devices packed with photos, videos, and TikTok downloads, Gen Z is quick to delete apps that don’t make the cut.

For restaurants, this means your loyalty app isn’t a guarantee—it’s a privilege. If it’s not essential, intuitive, and genuinely valuable, it won’t stay on their phones for long. Apps that are clunky or serve only as portals to collect points risk being downloaded only when a transaction is imminent and deleted shortly after.

The Phone Number as the Loyalty Hub

The second key takeaway revolves around the importance of phone number-based loyalty systems. Gen Z doesn’t want to rely solely on apps to access loyalty rewards. Instead, they prefer using their phone number as the primary anchor for collecting and redeeming points.

This preference underscores their desire for simplicity and consistency. A phone number-based system allows for seamless participation without the friction of downloads, updates, or forgotten passwords. Plus, it ensures they can interact with your program even if they’ve opted to ditch your app.

How Restaurants Can Adapt to Gen Z’s Loyalty Expectations

So, how can your restaurant brand evolve to align with these shifts? Let’s break it down:

1. Streamline Your App’s Value Proposition

Your app doesn’t need to be everything to everyone. Focus on what matters most to your audience: easy ordering, exclusive perks, and a clean, intuitive design. Make it lightweight and user-friendly. The goal is to ensure your app is a want-to-keep, not a nice-to-have.

2. Go Beyond the App

Apps shouldn’t be the sole gateway to your loyalty program. By enabling phone number-based rewards systems, you eliminate barriers to entry and create a smoother user experience. Imagine a customer walking into your restaurant, ordering, and earning points simply by providing their phone number at checkout—no downloads required.

3. Integrate Across Channels

Gen Z interacts with brands across multiple platforms, so your loyalty program should follow suit. Integrate your phone number-based system into online ordering, in-person transactions, and third-party delivery platforms. This omnichannel approach ensures consistent participation and reinforces your brand’s accessibility.

4. Offer Meaningful Rewards

Loyalty isn’t just about collecting points—it’s about creating value. Rewards need to feel achievable and worth the effort. This generation appreciates exclusivity and personalization, so think beyond the typical free item after 10 visits. Offer custom perks, like early access to new menu items or experiences tied to your brand story.

5. Communicate with Purpose

Gen Z expects communication to be transparent and tailored. Use the data from your loyalty system to send them updates they’ll care about, like points milestones or limited-time offers. Avoid spamming their inboxes or overloading them with irrelevant content—remember, they value minimalism in more than just their apps.

Why These Changes Matter

Understanding and adapting to Gen Z’s loyalty preferences isn’t just about following trends; it’s about future-proofing your brand. This group is rapidly becoming the most influential consumer demographic, with spending power projected to surpass $360 billion globally by 2030.

By prioritizing simplicity, integrating across channels, and focusing on genuine value, your brand can stay ahead of the curve. Loyalty programs that respect their time and preferences will be rewarded with the thing every restaurant brand craves: repeat visits and long-term advocacy.

Closing Thoughts

Gen Z has rewritten the loyalty playbook with their minimalist, efficiency-driven mindset. Their mantra? Less app, more loyalty. By embracing phone number-based systems, streamlining your app’s value, and delivering meaningful rewards, your restaurant can position itself as a go-to brand for this influential generation.

Ready to dive deeper into these insights? Check out our latest podcast episode, where we unpack these findings in greater detail. Find us on Spotify, Apple Podcasts, YouTube, or iHeartRadio—and don’t forget to subscribe!

Your brand’s next big loyalty breakthrough could be one phone number away.