Retailers eager to capture the lucrative Millennial market should deploy loyalty programmes that prominently feature mobile technology, embrace the value of peer recommendations and are dedicated to helping Millennials save money on everyday expenses that include driving and gasoline, according to survey results featured in the latest Excentus Insight Series report.
The study entitled The Roads to Rewards: What Drives Millennial Loyalty?, found that Millennials are more willing than their Baby Boomer parents or middle-aged Generation X consumers to switch retailers (78%) or brands (55%) in order to earn fuel savings rewards. Their preferred brand loyalties differ from older consumers by rates of 10%-17%.
According to survey results, Millennials also:
- Rely on mobile apps (33%), smartphones/tablets (27%) or wearable devices (7%) to check their rewards status
- Check their rewards status daily (13%) compared with Generation X (10%) or Baby Boomers (7%) - a sign of Millennials' always-on connectivity
- Are more enthusiastic (26%) than both groups (19% Gen X, 13% Boomers) about using loyalty rewards to save on the costs of driving
- Join a fuel savings reward programme based on the recommendation of a family member or friend (19%), compared with Generation X (8%) or Baby Boomer (6%) consumers
- Link their rewards-earning capability to a credit card (26%), compared to 10% and 8%, respectively, of Generation X and Baby Boomer consumers
- Prefer a variety of rewards activities to save money, including retailer/brand coupons (26%), fuel savings rewards (25%) and instant cash-register discounts (23%)
"Raised on the Internet and coming of professional age in the midst of a national recession, the Millennial generation is intimately aware of prices and pressures on their budgets, and they present retailers with unique challenges and equally clear opportunities," said Brandon Logsdon, President and CEO of Excentus, which owns and operates the Fuel Rewards programme and sponsored the survey-based report. "A loyalty programme that's built on technology, everyday savings and a variety of meaningful, everyday rewards-earning options for Millennials can be the key foundational factors that cement rewards-based relationships, increased spending, return visits and lifetime brand loyalty."
Representing 25% of the U.S. population and more than $200 billion in annual spending, 13-34-year-old Millennials are similar to Generation Xers (35-54-year-olds) and Baby Boomers (55 and older) in that they join rewards programme to save money any way they can. But Millennials' responses to the July 2015 survey indicate key differences in behaviors and attitudes that should help retailers, merchants and loyalty programme managers create rewards programmes that connect with this critical segment.