Younger generations of consumers are driving a transformation of the online checkout experience. New consumer research from American Express reveals their priorities – rewards, value and frictionless journeys are now the expectation.
Our research found that seven in 10 (71 per cent) of Gen Z and Millennial consumers said earning rewards on their spending, such as cashback or loyalty points, are key to influencing their payment choices. In fact, rewards ranked as more influential than any other factor, including convenience or speed. For retailers, the research suggests that if consumers don’t feel rewarded for their spending, they will potentially shop elsewhere.
Rewards that build loyalty
Our research found rewards are a powerful motivator at every price point. Three-quarters (74 per cent) of Gen Z and Millennials say having the option to redeem loyalty points at checkout influences their decision on larger purchases, and a similar proportion (73 per cent) say it matters for smaller ones too.
The message is clear: younger shoppers want their decision to spend with a particular business recognised and rewarded. That might include earning points every time they spend with their preferred card, or tiered rewards, encouraging repeat spend and building long-term loyalty.
To strengthen these relationships further, retailers must also be alive to the power of personalisation when developing their loyalty schemes and customer offers, harnessing the power of data. Data is the backbone of personalisation and can help drive business growth. For example, American Express partners with merchants across all sectors to develop personalised card-linked offers based on our deep Cardmember insights, with easy-to-launch campaigns that drive both new and repeat spend. We work with these merchants to devise the right bespoke Amex Offer for their objectives, creating promotions that we know our Cardmembers will find appealing – and requiring just one click for them to sign up.
Rewards influence buying choice
The power of rewards is not limited to card-linked perks. Programmes offered directly by retailers also carry real weight. Two-thirds (66 per cent) of Gen Z and three-fifths (62 per cent) of Millennials say that retailer-specific rewards influence how they choose to pay, and where they choose to spend.
This widely shared preference is a huge opportunity for retailers to establish and enhance loyalty initiatives that make consumers feel recognised as valued customers, which in turn creates a tangible way to build connection and repeat spend.
Amongst Gen Z and Millennial shoppers, with their strong preference for rewarding shopping, employing this tactic will result in incentivised consumers who will continue to spend where they feel valued.
Seamless checkouts as the new standard
Rewards matter, but for younger generations, ease of payment is also critical. Our research found that almost two-thirds (64 per cent) of Gen Z and Millennial shoppers feel it’s important they can use cards saved to their device during transactions, and over half (56 per cent) say one-click checkout is important. These numbers show that payment flexibility and a seamless checkout process is now a baseline expectation.
Consumers’ preferred way to pay can change on a case-by-case basis, depending on what and how they’re buying. For example, Open Banking-powered payments, such as American Express’ Pay with Bank transfer debit product, allows consumers to pay for products and services directly from their bank account, with merchants benefiting from secure, speedy payments.
Our research has shown that rewards and seamless payments are front of mind when it comes to spending and have sway amongst Gen Z and Millennial consumers. These shoppers are setting the direction of travel as their spending power increases. Retailers who act on these preferences will build trust and loyalty that helps fuel business growth into the future.
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