Three Drivers of Brand Loyalty in the Millennial Economy

Millennials, millennials, millennials—yes the retail world is still abuzz with Millennial fever.

And with good reason. As today’s largest generation, Millennials account for an estimated $1.3 trillion in annual consumer spendingIt goes with good reason then, that courting the Millennial shopper has become a significant focus in most retail sales strategies.

But to court them (and hold them), retailers first need to learn what drives Millennial loyalty:

Show them the (exclusive) love

Who doesn’t love to be rewarded? Well, Millennials certainly do. According to a study by Accenture Strategy, 73% of Millennials report receiving brand rewards, such as discounts and gift cards, as a major driver of their brand loyalty.

It also seems that exclusivity really sweetens the loyalty deal. A study by PricewaterhouseCoopers found that brands who offer exclusive deals through a brand’s members-only program are rewarded with stronger Millennial loyalty. The same study found that roughly one-third of younger Millennials (aged 18-24) use their mobile devices to access a digital version of those deals (such as e-rewards cards).

Take action

Establish a loyalty program that regularly rewards your Millennial shoppers with exclusive deals (such as early access to sales and products, surprise bonuses, or access to sweepstakes). Be sure to offer those rewards digitally, such as online discounts and e-rewards cards.

Keep them on the cutting edge

Millennials grew up in an age of rapid change and use technology to stay on top of the world around them. When shopping, they similarly use digital to find the latest deals and offerings from the brands they love.

According to the Accenture Study, 66% of Millennials report favoring brands who offer them the latest product and service offerings. Further, they also favor retailers who give them digital shopping experiences.

A report by Goldman Sachs found that 90% of Millennial shoppers purchased something online within the past 12 months.

Take action

Provide digital-first offerings, such as online gift cards and promotional offers. Give your Millennial shoppers the chance to snag your deals as they happen.

Also, be sure to design your loyalty in a program in a way that seamlessly evolves along with changes to other technologies (e.g., changes to apps, social media, etc.)

Give them a personalized experience to remember

Millennials are all about experiencing life and spend their money accordingly. A study by Eventbrite found that more than 78% of Millennials favor spending their cash on a memorable experience.

The Accenture Strategy study also found that 64% of Millennials gravitate towards brands that offer them new experiences, products or services that exceed the brand’s typical scope.

Further, Millennials crave personalization out of those shopping experiences—they don’t just buy for buying’s sake, they buy for experiences that will enrich their lives through greater convenience and value. A study by USPS suggests that retailers who customize the shopping experience through options that appeal to the value-driven Millennial shopper are more likely to be rewarded with their loyalty.

Take action

Create personalized shopping experiences based on your Millennial shoppers’ history with your brand—such as notifying them of deals or rewards on items similar to their past purchases.

Be sure also to apply this personalization to your loyalty program. For example, if your customer frequently buys a certain product, offer them bonus points if they purchase more of the same product within a set period.

Be ready to evolve

There are many opportunities to create loyal customers out of Millennial shoppers. A great place to begin is making sure your loyalty program can flexibly evolve with your customers, the market, and changes in technology. Everything else can be experimented with and improved on top of that underlying infrastructure.

SHARE THIS STORY | |