Young consumers rewriting the value equation for businesses
Savvy young spenders are saving up and spending smart to afford their summer experiences, according to new research from American Express. Nearly three in five (58%) Gen Z and Millennials in the UK are prioritising spending on experiences over physical products this summer, by embracing points and perks.
Social media is driving demand for experiences among Gen Z and Millennials, with more than two in five (43%) agreeing that social content inspires their choice of summer experiences, such as music festivals, trips to the theatre and meals out. While nearly half (47%) want to visit a destination or attend an event immediately after seeing friends or influencers post content on social media, Gen Z and Millennials focus on quality over quantity. Three in five (60%) prefer to do a few things well rather than pack in lots of cheaper experiences (60%). Millennials and Gen Z are also spending responsibly, with three-quarters (73%) planning ahead to afford the experiences they want.
Reap the rewards
Gen Z and Millennials are demonstrating their savviness by maximising the value of each purchase. Nearly two-thirds (61%) of millennials agree that they tend to spend more on experiences if they can offset the cost using rewards and discounts, this increases to 67% among Gen Z consumers. This group is particularly eager for added benefits, with nearly half (48%) believing that discounts via loyalty schemes deliver the best value, followed by being able to redeem points and rewards against the cost of tickets (36%).
The two generations also have an appetite for enhanced experiences, with a fifth (20%) agreeing that getting exclusive extras, such as VIP access or discounted merchandise, add value.
Premium pays off
The appetite for maximising value does not stop at experiences. Young consumers are also more likely to decide how they pay based on the perks on offer. Seven in 10 (70%) are influenced by better rewards or cashback than other ways to pay, while around two-thirds are more likely to choose how they pay based on sign-up bonuses and welcome offers (66%) or retailer-specific incentives (63%).
Dan Edelman, UK general manager, Merchant Services, said: “Our research shows highlighting the value and added benefits that younger consumers are seeking remains important for retailers, and can help drive repeat spend. Gen Z and Millennials say that rewards such as earning points or cashback influence how they choose to pay and where they choose to spend. This will be a key battleground for retailers as they look to stand out against competitors.”