What Millennials think about Loyalty Rewards Program?
Marketers love segmentations; baby boomers, generation X, millennials (generation Y), generation Z and so forth (though the jury is still out as for what will come after Z…). It’s a convenient way to put labels on different demographics in order to understand them better and target them better.
Why are millennials important for marketers?
Millennials, those who were born between 1980 and 2000, number around 80 million in the US alone. Though it is hard to generalize about so many people, some things are clear: these are people in their 20s and 30s; many of them already have careers, kids, and homes. This segment spends currently around $600 billion a year in the US, and it is estimated that in a few years their spending will grow to $1.4 trillion annually.
In light of this, it’s no wonder that retailers make every effort to respond to the needs of millennials. One of the most common and efficient ways to attract them is using bobile’s loyalty and rewards programs; millennials love loyalty programs – 78%-80% of them already belong to two or more. But not the old-fashioned punch-card loyalty programs; millennials are digitally savvy, and their requirements are different.
So what will motivate Gen Y’s to join a loyalty program?
- Understanding them.
- It is said that the millennial shopping slogan is ’Whatever I want — whenever, wherever, however, I want it.’ Customers expect purchasing programs and services to integrate into their lifestyle, and not the other way around.
- They expect results quickly – immediacy is the name of the game. It is better to offer smaller rewards immediately than bigger rewards in the far future. Otherwise, they walk away.
- They appreciate the convenience. More than a third said that they won’t join a loyalty program if the sign-up process is too long, or too complicated.
- It is not just about the money. It’s important to remember that, in the US, almost two-thirds of this age demographic do not even have credit cards. So retailers need to focus on experience. For example, an occasional free coffee, or receiving advance notification of exclusive deals, skipping a checkout line, etc. Focusing on the experience provides a personal touch and can make shoppers feel they’re part of something bigger.
- Invest in mobile technology.
- A whopping 92% of millennials own a smartphone. This is a generation living on-the-go and connected 24/7. They are more likely to make purchases if they receive real-time notifications and coupons directly on their devices. Retailers need to address that.
- With the amount of data available and the right analysis software, retailers can personalize customer experience almost to the individual level. Adding in-store multichannel capabilities and mobile wallets, for example, can make all the difference in attracting and retaining millennial shoppers.