Gen Z and brand loyalty—how virtual experiences can be leveraged by marketers

Gen Z Voices explores the Gen Z perspective on marketing, technology, social media and the future of the ad industry. Submit your essays here. While public excitement about the metaverse has dampened over the past year, established brands from Gucci to Sony are continuing to harness virtual experiences to engage Gen Z consumers. Gen Z is emerging as the largest consumer group in the U.S., projected to wield spending power of $33 trillion by 2030. Virtual experiences offer an ideal environment for brands to build rapport and grow with this demographic. Accessible through both mobile devices and browsers, such experiences don’t require expensive headsets. With the introduction of Meta’s Ray-Ban AR Smart Glasses and Apple’s Vision Pro, digitally enabled experiences are expected to increase. Ad Age Gen Z Contributor Column We welcome Gen Zers to submit fresh takes exploring Gen Z within the ad industry Learn more here Here are three reasons why marketers should use virtual experiences to target Gen Z: Values-driven brand storytelling A survey by Ogilvy found that 90 percent of Gen Zers want to participate in interactive brand experiences. Virtual experiences give brands the opportunity to place customers at the heart of a narrative and involve them in branded content. Recently, Gucci introduced Cosmos, an immersive virtual exhibition enabling customers to delve into decades of the brand’s history and complete gamified challenges. Gucci has successfully harnessed virtual experiences in the past year to redefine itself for its younger audience. And it has paid off, with Gen Z becoming Gucci’s fastest-growing segment. Gen Z leverages online environments for self-expression and identity-building, more than previous generations. Last month, e.l.f. beauty launched a virtual experience inspired by the brand’s hero products and focused on gamifying social impact. Users could create “dream start-ups” and learn entrepreneurial skills. Brands that reinforce Gen Z’s desired self-identities can foster strong loyalty and growth. Immersive virtual experiences enable brands to shift from talking with Gen Z to partnering with them, creating memorable storytelling that boost affinity, recall and purchase intent. Improved product discovery Gen Z increasingly favors online shopping, with TikTok surpassing Google as its go-to platform for product searches. In the TikTok-driven era with new brands emerging daily, marketers are grappling with the challenge of getting customers past the discovery phase and into purchase. Check out the latest Ad Age events and award programs Leveraging AR filters can be effective at improving product discovery and shopper confidence. Sunglass Hut’s AR-powered experience on Snapchat allowed users to virtually try on eyewear styles, facilitating seamless navigation to product pages for immediate purchases. This AR experience led to more than 14 million product try-ons and attracted 6.7 million new audiences. Similarly, Sony’s ‘LinkBuds Always On’ AR filter on TikTok, prompting users to mimic facial expressions to unlock dynamic animations, resulted in a 164 percent increase in add-to-cart activity. AR try-on experiences via social media platforms can generate virality, with a survey by Snapchat finding that half of Gen Z consumers are more inclined to pay attention to ads that integrate AR as they help them feel more connected to brands. Personalized experiences at scale In the U.S., processing online fashion returns costs companies approximately $25.1 billion annually, with 53 percent of surveyed retailers citing incorrect size and fit as the primary reason for returns. Gen Zers dislike online returns as they’re inconvenient, expensive and environmentally harmful. Balmain is using virtual environments to reduce online returns and enhance personalization in the online shopping experience. In partnership with 3D fitting-room company BODS, customers can generate personalized 3D renderings of their bodies and virtually try on digital replicas of the brand’s signature pieces, offering a visual preview of how different sizes will appear and fit.Gen Z consumers expect brands to take accountability for their environmental impact. This strategic use of digital experiences can enhance customer personalization, reduce costs and minimize carbon footprint, while fostering stronger loyalty with Gen Z: Here are a few tips for brands looking to engage younger audiences through immersive virtual experiences: Understand your customers Gen Z is a consumer group fueled by paradoxes—ethical yet indulgent, tech-driven yet nostalgic. It’s important to not oversimplify it into a single persona. Instead, marketers should segment them based on shared values and character traits. Establish clear objectives Marketers should define clear goals for their digitally-enabled experiences and determine their optimal marketing mix—considering social media, user-generated content and immersive experiences to resonate with this cohort. Explore tools and experiment Brands should familiarize themselves with available tools and make pragmatic platform choices aligned to business needs. Roblox and Fortnite are popular for building engaging virtual experiences, while TikTok or Snapchat can be effective for AR filters. Set clear metrics for testing and create channels to collect customer feedback. While virtual experiences currently attract younger consumers, hardware advancements may soon make them more accessible to mainstream audiences. Brands that tap into creativity and unlock the power of virtual experiences can deeply connect with Gen Z and supercharge loyalty. See our Year in Review stories here

Gen Z and brand loyalty—how virtual experiences can be leveraged by marketers

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