What Marketers Get Wrong About Gen Z

Most marketing teams think they understand Gen Z. The strategy deck says so—AI personalization is live, social channels are active, the loyalty program just relaunched. Every initiative has a green status light. Then someone pulls up the retention numbers for customers under 28. Flat. Or sliding.

SAP’s Global Engagement Index surveyed both marketers and consumers across 12 markets, and on four critical dimensions, what marketers believe they’re delivering to Gen Z and what Gen Z reports experiencing are fundamentally different stories. Almost 2 in 3 marketers believe they provide enough value for customer data—only 29% of consumers agree. Just 19% of marketers prioritize mobile apps—40% of Gen Z browse directly through them.

Each gap follows the same shape. Marketers invest in a capability, measure their own output, and call it progress. Consumers experience the result, measure it against their expectations, and draw a different conclusion. The distance between those two readings is where Gen Z loyalty goes to die.

Your team just shipped AI-driven product recommendations across email and app. Open rates ticked up. The VP presents it as a win. Meanwhile, in the customer feedback channel, the word “creepy” has appeared three times this month and nobody’s flagged it yet.

Nearly 8 in 10 marketers use AI for personalization, and almost 2 in 3 believe they’re providing enough value in exchange for customer data. Consumers aren’t opposed to it—they just don’t care how the experience is delivered, only whether it’s worth their data. And when asked whether they get enough value for the data they hand over, just 29% of consumers agree compared to the 64% of marketers who think they’re delivering it.

That’s a gap wide enough for a whole generation to slip through. Four main things explain the disconnect.

1. Relevance vs. the right to be relevant

While marketers optimize for relevance, Gen Z is evaluating whether the brand has earned the right to be relevant in the first place. Those are different questions, and the answer to the second one determines whether personalization feels helpful or intrusive. A recommendation that surfaces a product worth considering builds trust. A recommendation that reveals how much the brand knows about your browsing history—without ever asking permission to use it—erodes it.

The fix starts with the value exchange. Over 4 in 10 consumers say they want brands to help them discover products they didn’t know they’d like. That’s the personalization Gen Z will welcome—product discovery that expands their world, delivered with transparency about what data is being used and why. The difference between “we noticed you browsed hyaluronic acid serums” and “based on your skin type, you might like these” is subtle in copy and seismic in trust.

Closing the gap: SAP Engagement Cloud’s AI-powered recommendation engine delivers recommendations based on product affinity and purchase predictions, giving marketers the tools to shift from surveillance to service. Progressive profiling captures preferences in stages rather than demanding everything up front, building the kind of customer profile that makes personalization feel earned rather than assumed.

2. The channel disconnect

Picture a channel strategy meeting. Email gets 60% of the engagement budget. The social team runs organic content and a creator program. A mobile app exists, technically—it’s in maintenance mode, waiting for “next quarter’s roadmap.”

Meanwhile, the actual Gen Z customer discovered the brand on TikTok at lunch, checked reviews on the app during her commute, and bought through Instagram checkout before dinner. Three touchpoints in one afternoon that the brand’s reporting attributes to three separate campaigns with three separate ROI calculations. In the analytics dashboard, it looks like three different customers.

Only 19% of marketers prioritize mobile apps as an engagement channel. Compare that to Gen Z’s behavior: 4 in 10 browse directly through brand apps, nearly a third shop via social commerce, and 30% rely on influencer reviews over brand messaging. Across the broader consumer base, 26% now shop directly on social media apps—a figure that climbs to 43% among Gen Z.

Marketers still plan in channels. Gen Z lives in an environment where channels blur into a single experience, and they notice when the seams show. An email that ignores what happened on the app. A retargeting ad for something already purchased through social. Every disconnected moment tells the customer that the brand doesn’t know who they are—or doesn’t care enough to find out.

Closing the gap: The operational shift is treating mobile and social as the primary engagement environment, with unified customer profiles that connect a TikTok discovery, an app browse, and an Instagram purchase as one journey. When a customer’s activity on one channel immediately informs what she sees on the next, the experience feels like a conversation. When it doesn’t, it feels like talking to a company that has amnesia every time you switch screens.

SAP Engagement Cloud’s omnichannel capabilities orchestrate engagement across channels using a single customer view built from composable data onboarding and real-time event triggers. The result is that a purchase on Instagram, a browse in the app, and an email open all feed the same profile—so the next interaction reflects everything the customer has already told the brand, regardless of where they said it.

3. The experience erosion

A loyalty program member returns a pair of white platform sneakers in store on Saturday morning. The exchange goes smoothly. By Monday, she’s received a promotional email for the exact sneakers she just returned, a push notification about the loyalty points she earned on the original purchase (now reversed), and a retargeting ad on Instagram featuring the same product. Three days, three reminders that the brand’s left hand doesn’t know what its right hand is doing.

Three-quarters of consumers say they’re frustrated by fragmented experiences. And 63% associate their favorite brands with seamless omnichannel experiences, meaning the standard Gen Z holds brands to is “connected,” full stop. A full 82% have been disappointed by a brand they were previously loyal to. Nearly half say brand interactions feel less personal today than they did a year ago, even as marketing technology investment reaches record levels.

That last stat deserves a pause—possibly even a furrowed brow—because brands are spending more on engagement technology than ever, and consumers say the experience is getting worse. The investment and the outcome are moving in opposite directions.

Gen Z doesn’t separate “brand” from “experience.” That post-return email barrage? That is the brand, as far as they’re concerned. And once that impression sets, it’s expensive to undo. You can’t fix it with a better subject line or a more compelling offer. The problem sits between the systems—the point-of-sale, the email engine, the loyalty program, and the ad retargeting tool don’t share data.

Closing the gap: This is where SAP Engagement Cloud’s connection to operational data changes the equation. When your engagement solution connects to orders, returns, inventory, and service events in real time, Monday’s email can recommend a different style in the same size instead of promoting the sneakers she already sent back. That’s the ERP-connected engagement capability that separates SAP from competitors who only see the marketing data. And it’s the difference between an experience that frustrates and one that earns a second chance.

4. The AI paradox

The quarterly AI review looks impressive on paper. AI-driven recommendations, AI-optimized send times, AI-generated subject lines—efficiency metrics are up across the board. Customer satisfaction scores haven’t moved.

Over half of consumers say AI makes shopping easier, and a similar proportion say it makes shopping faster. They’re not anti-AI. But 71% dislike brands collecting data without explaining why, and 41% want help discovering products they didn’t know they’d like. Consumers have a clear picture of what good AI looks like: it works for them.

On the marketer side, 92% have adopted AI tools, according to SAP’s AI in Retail Global Report. Eight in 10 believe AI will be essential for acquiring and retaining customers. The investment is real and accelerating, but it’s pointed inward. Most brand-side AI is optimizing the marketer’s workflow: faster campaign builds, better segmentation, smarter send times. Useful, all of it. And invisible to the customer.

Gen Z is setting a different standard. Over 4 in 10 already use AI agents to guide their purchasing decisions—comparing prices, evaluating reviews, shortlisting products before a human even opens a browser. They’re accustomed to AI that works for them, that surfaces the right product, answers a question in context, and compares options without bias. Your customer’s AI assistant is shortlisting suppliers while your team is still pulling last week’s campaign report. When brand-side AI doesn’t meet that bar, the gap between the marketer’s dashboard and the customer’s experience keeps widening.

Closing the gap: The shift is flipping the AI lens from “how does AI help us target better” to “how does AI help the customer decide faster.” SAP Engagement Cloud’s AI capabilities power product and content recommendations based on individual behavior, predict which customers are likely to buy, churn, or re-engage, and optimize delivery across channels in real time. AI-powered segmentation builds dynamic audiences based on predicted behaviors rather than past actions, so campaigns reach customers based on what they’re likely to do next. The intelligence serves the customer experience, with marketers orchestrating the outcomes.

Every gap traces back to the same root cause: disconnected data creating contradictory experiences. Marketing teams are investing in the right capabilities—AI, personalization, omnichannel engagement—and deploying them from systems that can’t share context with each other. The customer feels the seams even when the marketer can’t see them.

The pattern is worth naming, because it explains why more investment keeps producing worse outcomes. Each new tool solves a real problem in isolation. The personalization engine recommends the right products. The email platform sends at the right time. The social retargeting tool reaches the right audience. Each one works. Together, without shared data, they produce the contradictory experiences that 75% of consumers say frustrate them.

Closing the gaps starts with unified customer data that connects marketing engagement to operational signals: purchases, returns, service interactions, inventory levels, loyalty status. When these systems share context, personalization becomes the kind Gen Z welcomes. Channels become coherent. AI serves the customer’s agenda alongside the marketer’s efficiency targets.

SAP Engagement Cloud connects customer engagement data to operational data across the enterprise through composable onboarding and real-time event triggers. Named a Leader in the Gartner® Magic Quadrant™ for Personalization Engines for seven consecutive years, it’s built for marketers who need to move from fragmented, channel-by-channel execution to connected engagement without waiting for an IT transformation to make it possible.

The green status lights on that quarterly review slide deck are telling the truth about what the team is doing. Whether they’re telling the truth about what the customer is experiencing is a different question.

Marketing to Gen Z is a challenge of perception—a measurable distance between what marketers believe they’re delivering and what consumers report receiving. The data from both sides of the counter is available to any brand willing to check its assumptions against it.

The gap isn’t comfortable reading. But it’s the most useful data a marketing team can have, because you can’t close a gap you haven’t measured. And for Gen Z, closing it is the difference between a brand they tolerate and one they’ll eagerly come back to.