Loyalty reward apps connect with Gen Z digital natives

The Opportunity	Who are Gen Z?	why gen z?	How to Do It
Build loyalty from a fast-growing market via personal prices and AI insights.	Born 1997 – 2012	Digital natives who see online and physical as parts of the same world.	1. Create a loyalty app with perks and personal pricing
Gain customers, raise revenues and steer future purchase decisions.	Age 14-29 in 2026	Confident spending on discretionary items i.e. luxuries and treats.	2. Collect customer data and refine rewards using AI
	£40bn annual retail spend by 2035	78% influenced by loyalty pricing when choosing products.	3. Connect with other promotions and warehouse IT systems to optimise results

Generation Z, or ‘Gen Z’ for short, have grown up with digital technology. Born between 1997 and 2012[1], they have never known a world without smartphones and social media.

For B2C and B2B retailers alike, this creates opportunities to engage with this generation where both their smartphones and their wallets live – in their pocket. Reach out via a loyalty app and you can learn from your customers while steering their buying decisions at the same time.

In this article, we look at the purchase potential of Gen Z, how digital and mobile shape their shopping, and why AI could be the key to unlocking this generation’s loyalty via personalised perks.

The soaring spending power of Gen Z

As of 2026, Gen Z are aged 14-29 and their spending power is growing fast. From £26 billion of retail purchases in 2025, this generation is expected to rise to £40 billion of spending in 2035[2], representing a key growth target for retailers.

Pew Research Center, widely considered the gold standard in generational research, explains the technological cut-off point between Gen Y (widely known as Millennials) and Gen Z:

“Social media, constant connectivity, and on-demand entertainment and communication are innovations Millennials adapted to as they came of age. For those born after 1996, these are largely assumed.”[3]

This creates a cohort of digitally agile shoppers who don’t see bricks-and-mortar stores as being mutually exclusive from online, but view real-world, online and mobile as complementary channels to help them research products, complete purchases and earn loyalty rewards along the way.

What is a digital native consumer?

The term ‘digital native’ is used casually all the time, but what does it really mean in a retail environment?

As a generation for whom smartphones and always-on connectivity are the norm, a third of Gen Z consumers say they would struggle without their phone, while two thirds (68%) prefer to shop via their phone.

“Mobile is their preferred device for shopping online and the gateway into stores, including checking availability, redeeming loyalty points and making payments.”[4]

This leads to some striking impacts on Gen Z’s retail spending habits:

- More than half of Gen Z shoppers feel comfortable spending on discretionary items[5]
- 68% of Gen Z cite store/brand apps as important when shopping in-store[6]
- 78% of Gen Z switch brands/products due to loyalty pricing (e.g. Clubcard, Nectar)[7]
- 88% of 16 to 24-year-olds use mobile payments (e.g. Apple Pay or Google Pay)[8]
- 97% of all UK consumers belong to at least one loyalty scheme[9]

Retailers can cater for these mobile-first buying habits by offering a smartphone loyalty app, not only to reach the Gen Z consumer cohort, but as a way to gain data-driven insight into what this generation of shoppers want from your brand.

Data-based insights and innovation

The term ‘database’ has never been more apt. In the modern era, your customer data is the base on which to build your brand, using AI-powered analysis and insights to cut through the notification noise and connect with consumers on their terms.

In his 2026 predictions for the Global Loyalty Organisation, Visa’s Andy Chalcroft called using loyalty data to enhance members’ experiences “the primary opportunity” to deliver real-time value.

“Loyalty programmes provide rich behavioural data… The challenge is no longer data collection, but insight activation. The growing sophistication of AI will be critical in unlocking real-time insights that enable stronger personalisation and more effective programme growth.”[10]

Platforms like MRM’s own Lodestone are crucial to collecting, organising and analysing data from loyalty apps and other promotional activities. Lodestone is modular across different types of promotions, responsive to mobile screen sizes, and can integrate with brands’ own business systems for seamless sharing of data.

This provides you with the foundation on which to build your brand, not only to meet the needs of Gen Z, but to cater better for digital adopters in the older generations too.

Keeping pace with UK loyalty app trends

Across all age groups, recent UK loyalty app trends show a pattern of rapid growth. In 2020-24, the market value of UK loyalty programmes grew by 16.4% per year. In 2025 it posted a further 14.6% growth, and was forecasted to maintain a 12.2% annual increase in value to the end of the decade.[11]

Personalisation of perks is a major factor in driving this growth. Research shows that British consumers prefer loyalty schemes that tailor rewards based on their past shopping habits[12], for example by offering a discount on a specific product they have purchased in the past.

Retailers are responding by turning traditional loyalty cards into fully fledged digital loyalty platforms, where customers can access their personalised offers, see their real-time points balance, generate and redeem digital coupons.

“AI and machine learning will drive deeper personalisation, with loyalty programmes leveraging customer data to offer real-time, tailored rewards and predictive insights.”[13]

Small treats, such as Waitrose’s offer of a free cup of coffee for loyalty scheme members, are a way to differentiate from rival rewards programmes in a saturated market, in order to “enhance customer satisfaction and loyalty”.[14]

The shift to predictive loyalty

Predictive insights offered by AI and deep data analysis shift the timeline of loyalty from the past to the future, allowing retailers to engage with consumers in a way that drives their next purchase rather than rewarding their previous custom.

Combined with Gen Z’s fast-growing purchasing power and confidence surrounding discretionary spend, this adds up to a promising generation for digital-only brands and bricks-and-mortar retailers alike.

With Gen Alpha hot on their heels, this landscape of highly engaged consumers is only likely to continue to grow in the coming decades, breaking down the barriers between ecommerce and physical retail as they become part of the same spectrum of shopping.

Brands who lead the charge by embracing AI-enabled digital loyalty platforms and smartphone reward apps can position themselves at the forefront of this transformation, and look forward to a future of loyal customers with more ways to buy.

Unlock loyalty-powered revenue growth today

MRM’s IT services, including Lodestone and our warehouse management solution Newton, are the perfect way to optimise your processes, establish loyalty programmes and other promotions, and ensure that you make the most of the data you receive in return.

We create and manage loyalty schemes for B2C and B2B brands, using points-based and tiered rewards to delight customers and maximise the perceived value of your brand.

To find out more, contact MRM today to book a no-obligation 15-minute fact-finding meeting, the first step towards an enticing loyalty scheme that engages with customers of all ages.