Gen Z Is the Generation That Most Values Merchants’ Personalized Offers

young woman shopping online with phone

While millennials value personalized offers from merchants and brands the most, as recently reported by PYMNTS Intelligence, Generation Z consumers value discounts less and are more interested in receiving personalized offers without monetary incentives. This evidence is contrary to the fact that Gen Z, as the youngest generation, has fewer financial resources than other consumer segments. For instance, this is the age group with the highest share of consumers reaching their credit card limit at the end of the month (at 47%), and the second-highest share of individuals living paycheck to paycheck (at 66%), per PYMNTS Intelligence data.

By the Numbers

These are some of the key insights detailed in “Personalized Offers Are Powerful — But Too Often Off-Base,” a PYMNTS Intelligence research study in collaboration with AWS that examines U.S. consumers’ preference regarding merchants’ personalized offers. The report, based on a survey of over 2,500 U.S. consumers, explores the effectiveness of personalized offers and the need for merchants to improve their capabilities in this area.

Personalized Offers That Interest Gen Z Consumers

According to the PYMNTS Intelligence research, nearly 85% of Gen Z consumers are interested in receiving personalized offers from merchants, a proportion that is pretty in line with what is reported by other generations. Millennials, for instance, show an interest of 89%, while baby boomers and seniors are a little behind with 75% expressing interest.

chart, consumer offers from merchants

Though it is true that discounts, promotions and free shipping are still the type of personalized offers Gen Z consumers are more interested to receive from merchants ― this is cited by 1 on 3 individuals from this group― they are more inclined toward receiving non-monetary benefits. This includes offers with exclusive access to new products (for 9% of Gen Z individuals), personalized product bundles (for 8%), and product recommendations based on previous purchases (for 6%). Although these participations may seem minor, they are comparatively higher than the proportion in other generations for this type of personalized offers.

Switching Merchants

The interest Gen Z shows in this type of offer is relevant for brands and merchants aiming to target potential customers with the most personalized offers possible. The success of their marketing campaigns depends on it. Not getting the right strategy can lead consumers to look for offers from alternative merchants. The study reveals that more than half of consumers find the offers they receive irrelevant to their needs and preferences. Among Gen Z shoppers, 1 out of 3 would be very likely to switch to a different merchant if given more personalized offers, per the PYMNTS Intelligence research. Offers focusing on non-monetary incentives may help merchants differentiate from competitors and retain existing customers.