65% of Millennial Loyalty Program Members Want Digital Rewards

BY Rachel Cagle
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New research commissioned by Hawk Incentives finds that the millennials surveyed now belong to more loyalty programs than the older respondents. The survey, which focused on consumer preferences for loyalty programs, also found that the millennials surveyed appear to be driving consumer preference for prepaid and gift card rewards in loyalty programs.

"As shopper habits have evolved and the world has become increasingly digitized, there has been a lot of discussion on the staying power of loyalty programs. This research demonstrates that loyalty programs and modern reward options have kept up with consumer trends and continue to appeal to younger generations," said Theresa McEndree, vice president of marketing, Hawk Incentives. "Our research also indicates that businesses designing loyalty programs with millennials in mind will benefit from offering an array of prepaid and gift card rewards, in both physical and digital options."

Millennials belong to more loyalty programs and are more active in them: As a whole, the respondents surveyed belong to 6.2 loyalty programs on average; millennials belong to 6.5. Additionally, as a whole, respondents report that of the loyalty programs they participate in, they are active in 3.9 programs, on average. Millennial respondents report being active in an average of 4.2 programs.

According to AudienceSCAN, as a whole, the 9.1% of U.S. adults who have at least 10 loyalty cards/​programs/​apps and use them regularly are 22.9% made up of 45 to 54-​year olds. About 55.5% of them are female, the annual household income of 20.2% of this group is $25,000 to $49,999 and 48.5% of this group lives in the suburbs.

Cards are favored for rewards: When considering a variety of loyalty program rewards, some type of card (be it gift or prepaid, physical or digital) keeps younger audiences engaged in a loyalty program or would encourage them to sign up for a new one. Fifty-​five percent of millennial respondents report some type of reward card would keep them most engaged, versus just 47% of baby boomer respondents. Additionally, 82% of millennial respondents would be interested in redeeming loyalty points for a gift card or prepaid reward card. Lastly, millennial respondents are more likely to prefer to redeem loyalty points for a prepaid card than any other generation.

Millennials are more likely to pick digital options as rewards: While 56% of millennial respondents say it doesn't matter whether they receive a digital or physical reward, 65% prefer digital rewards, versus only 45% of boomers. Additionally, millennial respondents are most likely to prefer a digital reward in the airline, retailer and gym categories.

In fact, according to AudienceSCAN, Loyalty Card/​App Users are 69% more likely than other adults to be members of frequent flyer programs. Additionally, a personal goal of 50.7% of this audience is to exercise more in the coming year.

Millennials are more likely to belong to online retailer and food & beverage loyalty programs: Membership to an online retailer's program is more likely among millennials than any other age group; 41% of millennial respondents belong to an online retailer loyalty program, versus just 29% of Gen X and 25% of boomer respondents. Millennials are also more likely to belong to a food & beverage loyalty program than boomers (46% versus 36% of respondents, respectively). Millennials are less likely than the other generations to be members of airline and hotel loyalty programs.

Loyalty Card/​App Users are always on the lookout for deals. That's why the best way to advertise to them is by sending ads or coupons in the mail, according to AudienceSCAN. Mailed ads/​flyers rule for finding coupons, according to 31.6% of Loyalty Card/​App Users, and last year, 63.3% of them took action after receiving such ads. In the same time period, 53.2% also were motivated by daily deals they found on sites like Groupon or LivingSocial. Another 59.9% also took action after seeing a TV ad last year.

AudienceSCAN data is available for your applications and dashboards through the SalesFuel API. Media companies and agencies can access AudienceSCAN data through the AudienceSCAN Reports in AdMall.