Merchants and brands will lose out on millennial loyalty if they don’t create personalised, targeted schemes which are accessible via smartphones, according to new online research from Eagle Eye Solutions, the leading UK SaaS technology company, and YouGov.
The research revealed the extent to which major retailers, brands and restaurants, may be losing out on a valuable loyal customer base if they fail to meet and anticipate the requirements of their millennial (18-24 year-old) consumers.
Millennials represent the next generation of spending power, and failing to understand these customers is a huge risk for businesses. They have higher expectations of retailers and brands than other age groups, and want a more targeted approach. Retailers, brands and restaurants need to future-proof today’s loyalty schemes by offering a personalised, digitally-enabled solution.
Tim Mason, CEO of Eagle Eye, comments: “Millennials expect communication that is tailored to their current location, context and intention and they know that when they sign up for a loyalty program they are participating in a two-way deal: their data in exchange for value and relevant content. Their loyalty has to be earned, not taken for granted.”
The biggest loyalty turn-off for millennials, is receiving excessive generic communications. This was the most common reason 18-24 year-old loyalty scheme members gave for quitting, at 24% compared to just 8% of over 55s. Meanwhile, excessive generic emails or a lack of personalised rewards accounted for why 38% of 18-24 year- olds left a loyalty program. Some 47% of millennials also said it was important for them to be able to access their loyalty program via a mobile device, compared to 37% of respondents overall and just 16% of those aged over 55.
“The desire for mobile and digital schemes is clear, and will only grow as millennial spending patterns become the norm and Generation Z comes of age,” Tim Mason continues. “It is high time retailers, brands and restaurants embraced the world of digital. If this is what the millennial market wants today, it will be what the entire market expects tomorrow”.
In line with this, 18% of respondents who have taken part in customer loyalty schemes said their biggest issue with them is the inconvenience of having to remember to bring the physical vouchers or cards with them when they shop.
When considering what features Brits found most attractive in a loyalty scheme, over half of all consumers (55%) preferred a points-based system such as those offered by Boots, Sainsbury’s and Tesco. This compares to 19% of respondents who selected ‘vouchers for money-off their next purchase’ and just 7% who said they preferred a ‘pick your own’ scheme, such as myWaitrose.
When asked what would improve loyalty schemes, 43% of consumers said they wanted to redeem points earned through one scheme at multiple retailers. This is an option offered by Sainsbury’s and Tesco, both of which allow customers to redeem Nectar and Clubcard points for products from other brands.
“Our research makes it clear: today’s millennials want simple, flexible and customised loyalty schemes. The future loyalty program must therefore be personalised, targeted and easily accessible via their smartphones. The age of digging around for different paper vouchers and physical loyalty cards in every store or restaurant is now over,” added Tim.
The whitepaper, ‘Reload your loyalty: Do you even know your consumers?’ is available here.