Millennials willing to pay for loyalty

Millennials were more willing than any other age demographic to pay for a fee-based loyalty program membership.

According to a LoyaltyOne survey of 1,005 U.S. consumers conducted in May, 75 percent of 18 to 24 year olds, and 77 percent of 25 to 34 year olds, said they would consider joining a fee-based rewards program at their favorite retailer if offered. Those percentages outweighed the 62 percent of respondents overall that would consider joining such a program, CSP News reported.

In general, 65 percent of respondents believe rewards are worth paying for if they are relevant to their needs. Again, millennials rated higher, 79 percent of 18 to 24 year olds and 76 percent of 25 to 34 year olds, believe rewards are worth paying for if relevant to their needs.

In fact, almost half of respondents, 47 percent, said rewards in fee-based programs are better than the rewards offered in free programs.

"These results should attract the attention of brands considering a shift to fee-based loyalty programs as marketers look for ways to create competitive differences and lock in customer spend against a backdrop of waning program effectiveness and engagement challenges," Lance Du Chateau, LoyaltyOne Consulting associate partner, told CSP News.

In addition, while 49 percent of overall respondents felt that all rewards programs seem alike, 57 percent of millennials ages 18 to 24 years old and 52 percent of millennials ages 25 to 34 years old agreed to the likeness.

"Brands have historically hesitated to explore new loyalty strategies because traditional programs were still novel in most spaces; however, this hasn't been true for years. The perception that only a small minority of shoppers will 'pay to play' is also a dated viewpoint," Du Chateau said.

Loyalty programs are one way to grab the attention of a rapidly growing consumer base. Many retailers are revamping store strategies in order to attract the attention of millennials including Whole Foods (NASDAQ:WFM) and Abercrombie & Fitch (NYSE:ANF).

For more:
-See this CSP News article

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