With the resurgence of travel and consumers increasingly relying on credit to pursue their experiences, one might assume that brand loyalty would become more straightforward.
However, even during times of inflation, consumers are still likely to seek out the best deals to ensure they can make their desired experiences a reality.
Based on the latest earnings results from American Express, the company’s current growth trajectory is driven by younger consumers. Consumer billed business, which includes member spending and cash advances, witnessed a notable 10% increase, reaching a total of $155 billion. The company also pointed out that overall card spending has hit an all-time high. Additionally, travel and entertainment-related expenses experienced a surge of 14% when adjusted for foreign exchange (FX) fluctuations.
Delving into the demographics, American Express emphasized that more than 60% of new consumer accounts were associated with millennials and Generation Z consumers, who collectively drove a significant 21% upsurge in their overall spending compared to the previous year.
While Delta Air Lines has reported a surge in travel and American Express has experienced significant momentum in spending from young consumers, it’s essential to consider that these are just two reports among many others in the competitive landscape of both the travel and payments industry. Various players have roles in shaping the overall dynamics and trends in these sectors.
Recent times have repeatedly shown that loyalty is a challenging aspect to maintain. However, one factor consistently emerges victorious: bargain prices, especially for today’s ever-changing and unpredictable consumer demographic.
So, how does brand loyalty fare with the ever-changing consumer? According to Ennismore, a global lifestyle hospitality company, loyalty may be harder to achieve, but there are ways to foster it by aligning with a consumer’s habits.
To encourage loyalty, Ennismore has launched a travel and food membership program called Dis-loyalty that aims to encourage consumers to embrace new adventures and acknowledges them for their openness to explore. The program brings together more than 75 hotels and 150 restaurants and bars from the company’s collective of 10 brands.
“We want to break the traditional loyalty model by not rewarding members for how often they stay with us, but by encouraging them to discover the new,” Ennismore founder and Co-CEO Sharan Pasricha said in a statement. “Dis-loyalty encourages our brand fans to discover hotels, restaurants and bars in a new, digitally immersive and editorial way. This complements our current brand-led strategy in delivering best-in-class brand.com experiences resulting in higher direct bookings.”
In contrast to conventional loyalty programs, Dis-loyalty members are not required to accumulate points or progress through tiers to access rewards. Instead, they receive instant perks from the moment of sign-up.
Members also bypass complicated terms and conditions or blackout dates for hotel stays. With Dis-loyalty, every day is open for bookings (subject to availability), and members can use their food and beverage benefits whether they’re staying at the hotel or not.
As inflation prompts consumers to be more discerning about their expenditures, a marketplace or retailer is poised to outperform brand loyalty.
Take Ulta Beauty for example. Ulta Beauty reigns at the top of the beauty loyalty domain with its Ultamate Rewards loyalty program, boasting over 40 million members and counting. The interactions with the brand, whether in-store or online, depict an engaged loyalty member with a profound connection to the brand.
Nicole Bernhardt, the head of Ultamate Rewards at Ulta Beauty, discussed with PYMNTS in June the significance of data in designing offers and rewards.
The Ultamate program goes beyond tracking consumer trends, she said. It enables the company to engage with consumers in meaningful and personalized ways. This approach ensures a continuous delivery of value, which holds significant importance for consumers. Additionally, the program facilitates tailored experiences for customers during their discovery, checkout and promotional interactions.
And the strategy is proving to be effective, with Bernhardt pointing out that 95% of Ulta Beauty’s sales are linked to its loyalty program.
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