There is a massive number of millennials in the United States. According to the latest population projections by the U.S. Census Bureau,[1] there are more than 71 million millennials—together representing enormous buying power. Businesses are clamoring for millennials’ dollars and loyalty to boost their bottom lines, and while creating the right formula to attract and retain this generation of shoppers can be tricky, the blueprint for success can be found in loyalty program rewards.
There has been a lot of discussion on the staying power of loyalty programs as consumers’ shopping habits evolve, but new research from Hawk Incentives[2] indicates that these programs are not only here to stay but are thriving—especially among millennials.
Looking for proof, or to tailor a loyalty program to this generation of consumers? Keep in mind that:
- Millennials love loyalty programs. Millennials have been around loyalty programs their entire lives and have learned to expect to be rewarded for their loyalty. On the whole, they belong to more loyalty programs than other generations and are also more active in them; Hawk Incentives research2 found that millennials belong to an average of 6.5 loyalty programs and are active in an average of 4.2 programs. In comparison, the average American only belongs to 6.2 loyalty programs and is only active in 3.9 of them.
- Cards top the “most wanted” rewards list: Millennials entered the financial world in the era of digital and alternative payments and gift cards as everyday payment tools. They have an inherent familiarity and trust of gift and prepaid cards and appreciate the flexibility and choice that these rewards offer; plus, cards don’t require a trip to the bank to be deposited and some can even be added to mobile wallets to suit millennials’ digital lifestyles. Hawk Incentives research2 found that 82 percent of millennials would be interested in redeeming loyalty points for a gift card or prepaid reward card and are more likely to prefer to redeem loyalty points for a prepaid card than any other generation.
- Digital rewards are preferred. It’s not surprising that millennials prefer digital reward options, given their proclivity for online shopping, digital communications and living digital lifestyles. Research commissioned by Hawk Incentives2 found that 65 percent of the millennials surveyed prefer digital rewards to physical when asked to choose between the two. Only 45 percent of boomers prefer digital rewards.
Modern reward options have kept up with consumer trends and continue to appeal to younger generations—helping to encourage and grow loyalty. Looking to the future, businesses designing loyalty programs with millennials in mind will benefit from offering an array of prepaid and gift card rewards—in both physical and digital options—to keep this demographic engaged and buying from their brands.
[1] Population Projections Datasets are created by the U.S. Census Bureau for public use. The most recent data subset was published in 2017.
[2] Consumer Loyalty Verticals Research was an online survey conducted independently by Leger on behalf of Hawk Incentives between February 5 and February 15, 2018. The sample size included 1,500 American respondents ages 18+. A probability sample of the same size would yield a margin of error of +/-2.5%, 19 times out of 20. “Millennials” comprised respondents ages 22 to 37.
