Amex: Retail’s Future Hinges on Ditching the Discount

In a world where so much is tailored to individual preferences, consumers have come to expect the same level of customization in retail.

A survey conducted by American Express showed that 68% of retail consumers in the United States said they expect brands to provide personalized offers based on what they like.

“Retailers really need to think about how they engage with their target audience if they’re looking to drive spend and loyalty in today’s environment,” Nyala Ward, vice president, Amex Offers Customer Success at American Express, told PYMNTS.

Generic discounts and blanket promotions no longer cut it; shoppers demand offers that make them feel seen and reflect their unique buying habits. For retailers, this new customer standard can be difficult to meet, as 85% of U.S. retail decision-makers reported that one of their business’s biggest challenges is sustaining customer personalization at scale, according to the survey. However, Ward said it also presents retailers with an opportunity to drive deep engagement.

“Gone are the days when you can just offer generic offers,” she said. “Those get lost in the shuffle and can even turn customers off from engaging with a retailer.”

Consumers, especially Generation Z and millennials, expect hyper-personalized offers, seamless shopping experiences, and engagement that extends beyond checkout. If retailers aren’t keeping up, they’re getting left behind.

The Next Generation of Consumers

With digital-first solutions like Amex Offers, which generate personalized card-linked offers based on where and how card members spend, Ward said businesses can harness the power of data-driven, personalized promotions to reach Gen Z and millennials.

Based on internal Amex data, Amex Offers drove 341 million U.S. card member offer enrollments and $9.8 billion in spending to U.S. merchants who ran on the platform. Amex’s data showed that 52% of Amex Offers redeemers in the U.S. were Gen Z or millennial card members. Using first-party transaction data helps these offers reach consumers at the right time, increasing their effectiveness.

Amex Offers is an alternative to traditional advertising that can help retailers break through the clutter, Ward said.

“It’s an opportunity to provide offers that are reflective of where and how customers spend,” which helps brands engage with shoppers in ways that feel meaningful and relevant to them, she said.

However, creating a strong loyalty strategy goes beyond targeting — it requires understanding the evolving shopping habits of Gen Z and millennials.

As Gen Z and millennials gain spending power and influence, they are increasingly important demographics for retailers, Ward said. They are digital natives who expect seamless, personalized and socially connected shopping experiences. Social media interactions, feedback forums and community-driven brand initiatives can be just as important as the products these groups purchase.

“Gen Z and millennials want to be seen as individuals, and they’re the driving force behind the demand for personalization,” Ward said.

Retailers that succeed in attracting this demographic will embrace a more holistic approach to loyalty, one that includes engaging digital experiences, sustainable practices and exclusive perks that go beyond discounts, she said.

What the Future Holds for Loyalty

As retailers look ahead, the next wave of innovation in loyalty programs will likely center around deeper personalization, greater integration of digital touchpoints and a more nuanced understanding of consumer behavior.

Brands that can effectively use data while maintaining transparency and consumer trust will be best positioned for success, Ward said, adding she sees a major shift toward holistic brand engagement. The conventional marketing funnel, where consumers move from awareness to intent to purchase in a linear fashion, is quickly becoming obsolete. Today’s customer journey is far more fluid and dynamic.

“A consumer can discover something that attracts them to a brand after they make a purchase,” Ward said. “Brand love doesn’t necessarily come before the purchase. It can come after.”

Instead of seeing the transaction as the end goal, brands should focus on fostering ongoing engagement that keeps consumers coming back, via an omnichannel experience in-store and online. Platforms like Amex Offers help businesses achieve this by creating continuous touch points in the palms of their hands, she said.

With this new model, success in retail is not just about securing the first transaction but about keeping the consumer engaged over time. The right offer, delivered at the right moment, has the potential to turn a one-time shopper into a lifelong customer, Ward said.