Purpose more important than price for younger shoppers

According to new research from American Express, Gen Z and Millennial shoppers place purpose over price and are drawn towards lifestyle brands that align with life choices and preferences, such as sustainability.

The findings reveal that one-third (33 percent) of 18-34-year-olds said they are more loyal to brands with a positive corporate reputation and values, which align with their own, compared to just one in seven shoppers aged over 55. While younger shoppers are also the most likely group to donate their points or cashback earned from loyalty programmes to charitable causes.

The study of 2,000 UK adults conducted by Opinium Research adds that while an attractive price tag was cited as a loyalty driver for the vast majority (86 percent) of those aged over 55, Gen Z and Millennial shoppers were the least likely generational group to consider price as a loyalty driver (49 percent).

It adds that the older generation is also less tolerant of poor customer service, with almost two-thirds (63 percent) of shoppers aged over 55 confirming a poor in-store experience would make them less loyal, compared to under one-third (29 percent) of younger shoppers.

Dan Edelman, vice president and UK general manager of merchant services at American Express, said in a statement: “Building a loyal customer base is the holy grail for any retail brand, but the current economic environment means that's tougher than ever as shoppers prioritise and flex their spending.

“Our research reveals a stark divide among different generations, meaning retailers need a range of strategies across areas such as price, purpose and service to keep customers coming back and spending.”

American Express reveals loyalty drivers between Gen-Z and Baby Boomers

The research did reveal some common ground between younger and older generations. A similar proportion of 18-34-year-olds and over 55’s (64 percent and 54 percent, respectively) said the cost of living pressures meant they are now considering using a loyalty scheme for the first time to help save money. Shoppers in both of these groups are signed up to an average of four loyalty schemes, the data revealed.

Commenting on the research, Kate Nightingale, consumer psychologist and chief behavioural officer of agency Humanising Brands added: “In the current environment, it’s natural for people to feel uncertainty meaning an increased desire to control their life, including where they spend money.

“Consumers are seeking reassurance from retailers, and want services that make their lives easier, while also feeling valued by the brands they choose to support. It’s clear that alongside price, both purpose and authenticity are important factors that build trust and support long-term loyalty.”